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Canada
has finished first for the second time in a row in an international
ranking of investment destinations, beating the other major
industrialized countries.
The
study looked at the cost of investing in G7 countries, Austria and the
Netherlands. It was conducted by consultants KPMG and sponsored by 45
international agencies and governments and is to be released today.
The
last KPMG report, issued in 1999, credited the low dollar and cheaper
labour costs for Canada's advantage over the United States and other
countries, provoking criticism from the opposition.
The
then-Reform Party said it was shameful that the best the country could
offer foreign investors was a shrunken currency, while the Liberal
government replied the opposition should celebrate that Canada was on
top.
This
year's report will also cite the low dollar as a factor in Canada's
placement, but will say the result would have been the same even if
the loonie were at a higher value, a government source said. The 1999
study said the country would lose its advantage once the dollar hit
US79¢. The source would not say what the latest study identifies as
the currency level at which the Canadian competitive advantage
disappears.
The
dollar, which finished trading yesterday at US62.39¢, has come under
fire in recent weeks from the government and the Bank of Canada. Jean
Chretien, the Prime Minister, Paul Martin, the Finance Minister, and
David Dodge, the governor of the central bank, have all said
repeatedly over the last week that the currency is undervalued. KPMG
officials declined comment.
Canada
finishes first in seven of 12 business categories as a place to invest
in the report, including biomedical research and development, advanced
software, electronics assembly and specialty chemicals.
Overall,
Canada finished in the top four in all 12 categories. The study
analyzed 27 cost components -- from the value of currency to
transportation, labour, health benefits, taxes and facility costs --
across the 12 business sectors. It examined 86 cities in Germany,
France, Japan, the United States, Italy, Canada, the United Kingdom,
the Netherlands and Austria in achieving its rankings.
The
KPMG model uses what it says are the typical costs for a medium-sized
business with sales of close to $20-million and at least 90 employees.
(Source: National
Post, Toronto: Survey ranks Canada First as a place to invest- January
29, 2002)
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