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Canada: A Northern Tiger

Remarks for the Hon. David Kilgour,

Secretary Of State (Asia-Pacific) & MP Edmonton Southeast

At the Canada Luncheon

Confederation of Indian Industry (CII) Partnership Summit,

Hotel Taj Residency

Hyderabad, India, January 7, 2003

Ladies and gentlemen, on behalf of my colleague Derek Lee, Member of Parliament for Scarborough-Rouge River, and the rest of Canada’s delegation, welcome to our Canada lunch; we’re delighted you could join us.

If you’ll allow me to quote German philosopher Max Mueller, “If I were asked under what sky the human mind has most fully developed some of its choicest gifts, has most deeply pondered on the greatest problems of life, and has found solutions, I should point to India.”

This is ashamedly my first visit to India. I can honestly say that I have been captured by it. Our Deputy High Commissioner Brian Dickson rightly calls India one of the most fascinating countries on earth.

There are so many reasons I’d like to return often. Our two nations have a long history of economic, political, and cultural partnership. Our links through the Commonwealth, our authentic democratic traditions, our respect for the rule of law and independent judges, and our “peoples bridge” as created by the nearly 1,000,000 strong Indo-Canadian community, has woven our societies together and built a strong and growing strategic partnership.

Indian investment in Canada

One new development is the recent investment of some of India’s leading Information Technology companies in Canada. Your software and related services exports alone exceeded US$8 billion last year and will likely cross the US$50 billion mark by 2008. Canada has begun to reap some of the benefits of this startling growth. To date, Wipro Technologies, Infosys, HCL Technologies and Tata Consultancy Services have set up Global Development Centres in Canada. This will allow them to serve customers across North America and the entire hemisphere.

Such investment is beneficial to both India and Canada because trade clearly follows investment. As Canadian investors are exposed to trail-blazing Indian IT firms, they in turn will look more favourably to investing in India. Permit me to offer you a brief snapshot of why these Indian firms have publically decided to invest in Canada.

Canada’s World Class Economy

Canada is a member of the G-8 and is a world-class economy. We are also one of the world’s most open societies. We have a built a multi-cultural and multi-lingual society; in Derek Lee’s constituency, for example, three out of four residents are born outside of Canada.

With a population of 31 million, Canada is the world’s sixth largest trading nation, accounting for about 4-1/2% of global trade. We are by far the largest trading partner for the U.S., with two-way trade in excess of US$1.2 billion every day of the year! It is not just primary products that we export; in fact, our top exports are autos, auto-parts, aircraft and aerospace parts, telecommunication and electronic equipment and power equipment, besides pulp & paper, newsprint, grains, peas and pulses, and many other primary products.

After nine years of economic expansion, driven by our “new economy” sectors like information technology, life sciences and aerospace, Canada continues to out-perform most OECD economies. Four successive years of fiscal surplus has allowed our government to cut taxes and to invest in health care, higher education and high-end infrastructure, paving the way for rapid economic growth. Interest rates and inflation remain at low levels.

Skilled Labour Force

We are particularly proud of our skilled labour force. The Global Competitiveness Report 2000 ranked Canada first in the world in developing knowledge workers. We have the highest rate of post-secondary enrolment in the world. Nearly half of Canadians over age 25 have completed post-secondary studies at universities, colleges or technical schools.

We are also proud of our technological infrastructure. Canadians use the Internet more than any other people, and we have the highest-speed research network in the world. The Canadian Network for the Advancement of Research, Industry and Education (CANARIE) built and operates the world’s longest, fastest and most advanced fibre optic research and education network. Virtually all our schools and public libraries are connected to the internet, making Canada one of the most connected nations in the world.

Competitiveness

KPMG, the global accounting and management firm, conducted a study recently on the costs of doing business in nine countries: the U.S., Canada, the UK, France, Germany, Italy, Japan, the Netherlands and Austria. It covered nine manufacturing sectors, including aerospace, auto parts, telecom & electronics, pharmaceuticals, chemicals, plastics, agri-food, and building products, as well as software design and web development and R&D research and product testing. The study found that the Canadian locations were the most cost-effective among all the nations surveyed.

There is also our access to the world’s richest market, the United States. Thanks to NAFTA, businesses based in Canada have hassle-free, duty-free access to the U.S. and Mexico, our NAFTA partners, making it the world’s largest trading zone. Setting up in Canada will give you access to a trading zone of over 400 million people and a combined economy of $9.4 trillion. In addition, our bilateral free trade agreements with Chile, Israel and Costa Rica, and our privileged access to the European Union mean that Canada is an excellent country to do business in and from.

The current negotiations towards a Free Trade Area of the Americas by 2005 would see the forging of one unified trading area for the Western Hemisphere. Our membership in APEC opens up windows of opportunity in the Asia-Pacific.

Conclusion

In short, Canada has much to offer Indian business as a partner. Our business peoples make good win-win business partners, whether in trade, services, investment or strategic alliances. India is currently the world’s 11th largest economy. Canada is the 8th largest economy and a major trading nation. And yet, why are we each only the other’s 25th largest trading partner? This certainly speaks to the enormous potential for growth that exists in the trade relations between our two countries. Our two-way trade is just over C$2 billion, and it is showing signs of solid growth in recent months. The absolute level of our current two-way trade is a far cry from the potential. We hope to see our trade with India rise and do so quickly.

My colleagues, the Ministers of International Trade and of Natural Resources, have each led substantial trade missions to India in the last ten months. Pierre Pettigrew, our Minister of International Trade, led the largest Canadian trade mission ever to India, composed of 166 individuals, last April.

But, as we all know, it is not just trade. Our companies should use each other’s markets as jumping points into neighbouring markets – Indian companies could use Canada as the gateway to the NAFTA market and Canadian firms use India as the entry-point to South Asia.

Canada is also an excellent destination for higher education with world-class universities offering education at very reasonable costs. The U.S.-based Gourman Report found that eight of North America’s top 20 Electrical & Computer Engineering faculties are in Canada. We hope that even more Indian students and their parents would look at Canada as an attractive, cost-effective and high-value destination for education.

Ladies and gentlemen, thank you for joining us for lunch. I would be delighted to take some questions.

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