Transcript FoIB_Slideshow_Ch9

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CHAPTER 9:
Canada and International
Business
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Key Terms
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tax credit
Smart Border Accord
Human Development Index (HDI)
productivity
telecommuting
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Chapter Objectives
By the time you finish this chapter, you should be able to:
 Describe Canadian companies that are leaders at
the international level and those industries in which
Canadian companies have had international
success and analyze the reasons for their success
 Evaluate the factors currently affecting the
international competitiveness of Canadian
businesses
 Explain how Canada can attract foreign investment
 Explain how Canada’s cultural diversity contributes
to its competitive success in international business
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Chapter Objectives
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Analyze the impact of international business
activity on Canada’s economy
Describe how the state of Canada’s economy
affects international businesses operating in
Canada
Analyze the ways in which the workplace,
occupations, nature of work, and working
conditions in Canada have changed as a result of
the growth of a global economy
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Canada’s Competitive Advantages
Canada’s Banking Industry
 Industry is dominated by the “Big Six”: Royal Bank of
Canada, TD Bank, CIBC, National Bank, BMO, and
Scotiabank
 Canadian banks are larger and have greater reserves
than European and American competitors
 Canada’s banking system is tightly regulated by the
federal government
 Designed to handle ups and downs of the business
cycle
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Canada’s Competitive Advantages
Canada’s Banking Industry
 Canada has profitably exported its banking expertise
around the world
 Four of the ten largest banks in North America,
measured by assets, are Canadian
 Scotiabank has more than two thousand branches in
fifty countries
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Canada’s Competitive Advantages
Canada’s Cultural Industry
 Includes publishing, theatre, visual art, music and film
 Provides employment for skilled workers
 Is a growth industry—Canada’s exports of cultural
products doubled between 1997 and 2006
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Canada’s Competitive Advantages
Tax credit
A sum that can be deducted from the amount of tax
owed by an individual or business.
For example, to draw film and television production to
British Columbia, the provincial government offers a 25
percent tax credit to companies that hire local workers.
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Canada’s Competitive Advantages
Canada’s Technology Industry
 To allow businesses and individuals to stay
connected across Canada’s large geographical area,
excellent communication technology is a necessity
 One of Canada’s great success stories is the
BlackBerry, developed by Waterloo-based Research
In Motion
 Canada also has a strong software industry
 Digital media industry—focused on gaming, special
effects, animation, and simulation products for
entertainment and health industries and the armed
forces—employs over fifty thousand people
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Canada’s Competitive Advantages
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Attracting Foreign Investment
Countries seek foreign investment because it:
 Increases economic activity
 Brings new technology
 Improves productivity
 Forces domestic companies to become more
competitive
On the downside, foreign investment also:
 Detracts from a country’s identity
 The profits earned by foreign-owned companies do
not stay in the host country
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Attracting Foreign Investment
The federal and provincial (and in some cases,
municipal) governments have programs to attract
foreign investment. Canada is attractive to foreign
investors because it offers:
 A supportive business environment
 A gateway to the world
 An infrastructure advantage
 Outstanding employees
 A great place to live
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Attracting Foreign Investment
A Supportive Business Environment
 Canada is ranked highly as an easy place to conduct
and set up a business
 Also offers excellent trade and investment opportunities
 Strong ties to Asia, Europe, and the rest of North
America through imports and exports
 Stable economy with low interest, inflation, and
unemployment rates
 Low corporate tax rates and offers tax incentives
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Attracting Foreign Investment
Gateway to the World
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 Seventeen of Canada’s twenty largest cities are
within ninety minutes of the U.S. border
 NAFTA has created opportunities for businesses
located in North America
 Canada’s connections to Asia (through proximity,
immigration links, and APEC) allow access to Asia’s
growing economies (especially India and China)
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Attracting Foreign Investment
Infrastructure Advantage
 Canada has more than 300 commercial ports.
 St. Lawrence Seaway is the world’s longest inland waterway,
allowing goods to travel easily from the Atlantic Ocean to the
middle of North America.
 CP and CN Railways have a combined rail system of
53,000km.
 The Trans-Canada is the world’s longest highway, spanning all
10 provinces and connecting to 18 border crossings.
 Smart Border Accord, an agreement between the Canadian
and U.S. governments signed in 2001, facilitates the crossborder flow of travellers and goods, and co-ordinates
enforcement efforts in the two countries.
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Attracting Foreign Investment
Outstanding Employees
 Canada spends more (as a percentage of GDP) on
education than any other country
 Has most highly educated workforce in the world
 Home to excellent business schools
Cultural Diversity
 Attracts highly educated immigrants
 Liberal immigration policies
 One of the most multicultural countries in the world,
with employees that speak many languages and
have an in-depth understanding of other cultures
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Attracting Foreign Investment
A Great Place to Live
In 2009, the United Nations Human Development
Index rated Canada as the fourth-best country in
which to live.
The Human Development Index (HDI) is a statistic
produced by the United Nations and used to rank
countries, which measures three elements:
 health (life expectancy at birth)
 education (literacy rate and school enrolment)
 standard of living (GDP per capita)
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Canada’s Productivity
Productivity
The amount of output with respect to the amount of
input. Input includes capital, raw materials, labour,
and innovation.
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Canada’s Productivity
Canadian companies could improve their
productivity by:
 Increasing investment in machinery and equipment,
especially communication and information technology
 Attracting more foreign investment
 Expanding Canadian investment in foreign countries,
especially in Asia
 Rationalization, which includes downsizing and moving
production to lower-cost countries
 Fostering corporate innovation by increasing spending
on science and technology
 Initiating government programs in science and
technology
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Canada’s Productivity
 Increasing the knowledge economy by graduating
more Canadians in the fields of science, math,
computer science, and engineering
 Encouraging employers to increase and improve their
training programs
 Increasing post-secondary funding
 Creating mentorship programs to help immigrants
become qualified in their fields of expertise
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.
Canada’s Productivity
The Changing Canadian Workplace
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 Dramatic changes because of globalization
 Workers will likely have many jobs, outside of the city they
grew up in and perhaps outside of Canada
 More temporary employees
 Employees need strong technical and interpersonal skills
 Employers can hire people located anywhere in the world
because of telecommuting—the use of computers and
other technology to work from home
Chapter 9:
CANADA AND INTERNATIONAL
BUSINESS
Fundamentals of International Business
Copyright © 2010 Thompson Educational Publishing, Inc.