CANADA – STRONG; STABLE; SUSTAINABLE

Canada Market Overview

November 2010

Alireza Rafiee

Director, Market Development

Austrade Toronto

CANADA – STRONG, STABLE, SUSTAINABLE

OVERVIEW

• WHY CANADA!

• MINING, OIL & GAS OPPORTUNITIES

• AUSTRADE PROJECTS AND EVENTS

• HOW WE CAN HELP YOU

Yet both nations have a lot of strengths

• Both survived the GFC relatively well

• Both have well regulated financial services sectors

• Both have excellent universities

• Both have active research programmes

• Both are resources rich

• Both have growing services sectors

WHY CANADASolid fundamentals:

Canada has a lot to offer as a business partner:

• Open economy

– receptive to new ideas/approaches

• an open and attractive free enterprise environment, ranked by the Economist

Intelligence Unit as the best place to do business in the G-7 this year and over the

next four years;

• the strongest fiscal position in the G-7;

• low corporate taxes, with the lowest overall tax rate on new business in the G-7;

• among the fastest rates of economic growth in the G-7 in 2010 and 2011, according

to the International Monetary Fund;

• a skilled workforce,

• a high quality of life;

• Strong import culture

• Relatively short supply chains;

• a vibrant environment for innovation, with one of the most advantageous research

and development tax incentive programs in the industrialized world; and

• a strong commitment to good governance and the rule of law.

Positive Business Climate

Business Environment of Top Ten Countries,

Rank for Forecast Period 2008-2012

10th

9th

8th

7th

6th

5th

4th

3rd

2nd

1st

Denm

ark

Finlan

d

Singap

ore

Canad

a

Switzer

land

Hong

Kong

Nethe

rland

s

Austra

lia

U.S.A

.

Sweden

Ran

k

The Economist Intelligence Unit's Business

Environment Rankings

The Economist business rankings model measures the quality and attractiveness of the business environment in the 82 countries

It examines ten separate criteria or categories:

political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labor market and infrastructure.

Source: The Economist Intelligence Unit, April 2008

The Economist Intelligence Unit's Business Environment

Rankings - Canada Positive Business Climate

Business environment ranks and scores

2008 – 12 2003 - 07 Change

Denmark 1 2 1

Finland 2 3 1

Singapore 3 1 -2

Canada 4 5 1

Switzerland 5 7 -2

Hong Kong 6 6 0

Netherlands 7 8 1

Australia 8 12 4

USA 9 4 -5

Sweden 10 11 1

Ease in Establishing a Business

• Canada ranks first among the G-7 for the fewest number of days required

for establishing a new business.

Duration (days)

3

67

13 13

14.9

18

23

0

5

10

15

20

25

Canada U.S. France U.K. Italy OECDAverage

Germany Japan

Canada’s over heavy reliance on the US

• 73% of Canada’s mercantile export trade is with the US and 62% of imports

– ($270 billion vs $186 b)

• Services trade is similar: 52% and 56%

• Growth in bilateral trade between Canada and the U.S. has averaged almost 6.0% annually over the last decade

• US alone was responsible for 82% of decline in Canada’s exports and 62% imports during the GFC

• The United States is also the largest foreign investor in Canada and the most popular destination for Canadian investment

• The reasons are obvious:

– Of Canada’s 20 largest cities, 17 are within a two hour drive to the US border

– Canadian production hubs closer to U.S. markets than many American production sites

– US Canada (and Mexico) FTA

– Open, integrated economy (esp in autos and food)

– Disproportionate size of US cf Canadian companies

And on European Union, but less with Asia

• 10% of Canada’s mercantile export trade is with the EU and 12% of imports

• Services trade is : 9% and 10%

• But a limited trade with Asia:

– Canada’s exports to rest of the world were 19% and imports 26%

– And services, 29% and 27%

– ($11 billion exports to China; $39 bn imports)

– ($2 bn each way to India)

• Canada is aware of the need to diversify its trade markets to Asia:

“Canada cannot afford to waste one minute in turning those numbers around,”. “Despite massive fiscal

and monetary stimulus, the West is still struggling with slow growth, high government and consumer

debt, and stubborn unemployment levels. Meanwhile, the emerging economies of Asia are now

resuming their pre-recession growth and employment levels. That’s why helping Canadian companies

to take advantage of opportunities in Asia is critical.” Export Development Canada

Canada – Australia – a natural fit!

More like Home than Away!

• Similar population size and GDP per capita ($46,500)

• Similar culture and business practices

• Similar government structure and policies

• Same legal system

• Similar sized businesses

• Relationship based business

• Largely urban-based population, spread thinly along US border.

• Large empty interior

• Strong mineral and agricultural base to economy

• Strong import culture; generally open markets

• Multi-cultural society

• As small countries with a population of only 22 and 32 million we have to make our way in the world and that will be best achieved by building a competitive business environment through cooperation and investment in each others markets

Austrade Canada

• 1 Canada team

78+ years of Austrade experience in marketing team

3 marketing teams (cover all Canada)

• Energy, Mining, Environment Team

• Education and Financial Services Team

• Agriculture, Food & Wine

1 Consular team (covers all Canada)

• 9 Marketing + 4 Consular + 1 Office Manager

• 3 locations (Vancouver, Toronto & DM in Montreal)

Canada – Australia Connection

2-way trade is $C4.2+ billion

• Approx. 2,000 Australian companies export to Canada

• Each ranks in the other’s Top 20 trading partners

• Major imports from Australia – alumina, wine, medical products, nickel ores

education services and business services

• Major exports to Australia – telecom equipment, pork, iron ore, aircraft parts,

professional and business services

2-way investment is around $C40 billion ($30 Aus; $10 Can)

• Over 80 Australian companies have established offices in Canada

• Canada is Australia’s 3rd largest investment destination with mining,

infrastructure, retail, finance, and technology leading the way

• Major Canadian investors in Australia, both for our domestic market and as

a base for Asia/Pacific

17

Canadians in Australia Australians in Canada

Barrick

Brookfield Asset Management

CAE

Bombardier

CHC Helicopters

Hatch

Golder

SNC

Gemcom

ATCO Power

ATCO Structures

McCain Foods

Trans Alta

RBC Capital Markets

Viterra

CGI

Pratt & Whitney Canada

Nortel

Mitel

RIM

Enerflex

Apotex

BRP (Bombardier Recreational Products)

Teck Cominco

Cameco

Uranium One

Ivanhoe

Lululemon

Bioniche

Institutional Investors (CPP, Ontario Teachers, Caisse, etc.)

Rio Tinto

BHP

Macquarie Group

Plenary Group

Worley Parsons

Ausenco

Transfield

United Group

Computershare

ALS Labs

Flight Centre

Bakers Delight

Packer Casinos

Charles Sturt

University

Navitas

Swannsinos

Amcor

Orica

Ansell

Brambles

Bradken

Pharmaxis

NAB/Presima

Stirling

Products

Billabong

Lend Lease

Sentient

Caroma

GHD

Nupress

Silver Thomas

Hanley

Architects

Leading Investors

Austrade’s priority sectors in Canada

• Education and University R & D collaboration and

commercialisation

• Clean Tech – Renewable Energy

• Mining and Oil & Gas technology and services

• Financial Services

• Wine

Mining sector – Canada Snapshot

• Canada is the fifth largest energy producer in the world

• Canada is the world’s 3rd largest natural gas producer

• Canada is the world’s 8th largest crude oil producer

• Canada is the largest supplier of energy to the United States

• Canada, with 179 billion barrels in oil sands reserves, ranks 2nd only to Saudi Arabia in global oil reserves

• Canada rank among the top five countries in the production of 14 major minerals and metals

Mining sector – Canada Snapshot

• Mining in all provinces

• Mining industry contributed $42billion to Canada’s GDP in 2007

– $10 billion in mineral extraction

– $32 billion in mineral processing and manufacturing

• The industry employs 363,000 Canadians

• The industry accounts for 19% of annual Canadian goods exports

Inflation Comparison - Canada / Australia / USA

Annual Inflation

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2000 2001 2002 2003 2004 2005 2006 2007

Infl

ati

on

Ra

te (

%)

Canada USA Australia

Mining Global Centres

• Toronto is the mining finance capital of the world

• TSX handled 80% of worldwide mining equity transaction in 2007/08 (home to 400 mining exploration company offices & over 30 head offices)

In the last 5 months, six Australian mining companies have listed on the exchanges. In 2009, Australian companies raised a record $2.2 billion in mining equity capital on Toronto Stock Exchange and TSX Venture Exchange

• Vancouver is the world’s leading cluster of exploration companies (850 offices & 400 mining consultants and related suppliers)

• Montreal houses important aluminium and iron ore companies

• Edmonton & Calgary are global centres for oil sands expertise

• Saskatoon has become global centre for uranium and potash

- 3 -

Trail(lead, zinc)

Elk Valley (coal)

Saskatoon/

Esterhazy(potash, salt)

Flin Flon(gold, copper, zinc)

Kamloops(copper, molybdenum,

gold)

Vancouver (allied industries,

junior exploration/

mine financing)

Kitimat(aluminum)

Fort McMurray (oil sands, allied industries)

Yellowknife(diamonds)

Thompson(nickel, cobalt)

Toronto(allied industries,

senior exploration/mine

financing)

Sudbury(nickel, copper,

cobalt, gold, pgm,

allied industries)

Timmins(zinc, copper,

lead, gold)

Val-d’Or(gold, copper,

zinc, allied industries)

Windsor (gypsum)

Bathurst(zinc, lead)

Thetford Mines(chrysotile)

Labrador City/Fermont

Sept-Îles(iron, aluminum)

Saguenay(aluminum)

Athabasca(uranium)

Rouyn-Noranda(copper, allied industries)

Minerals and Metals in Canada

Red Lake/

Hemlo (gold)

Fort

Saskatchewan(nickel)

Bécancour(aluminum, magnesium)

Montréal(allied industries)

Raglan(nickel, copper)

Voisey’s Bay(nickel, copper, cobalt)

Whitehorse(exploration for base metals,

gold, and coal)

Nunavut(exploration for

Diamonds, iron, coal, and

base metals)

East to West

• As January 08, there were 766 mining establishments in Canada.

• Mineral production was $40.4 billion in 07

– $10.7 billion or %26 generated in Ontario

– BC & Quebec each had 14%

• Growth in Saskatchewan since 1997 due to the increased market

price of Uranium and Potash

• Growth in Labrador in the past two years – since the Vale Inco

nickel-copper mine opened

• Top three jurisdictions for gold production in 07 were Ontario,

Quebec & BC

• Nickel was Canada’s top-valued mineral in 07 followed by copper,

potash, coal, uranium, iron ore, gold, zinc, cement & diamond

• An estimated 9200 new workers will be needed per year to meet

anticipated production target

Some of the Key players in Canada market

• Rio Tinto Alcan

www.riotintoalcan.com

Rio Tinto Alcan is one of five product groups operated by Rio Tinto, a leading international mining group. Alcan is a global supplier of high quality bauxite, alumina and aluminium. Alcan is engaged in bauxite mining, alumina refining, and aluminium smelting.

• Barrick Gold Corporation

www.barrick.com

Barrick Gold is the largest pure gold mining company in the world, with its headquarters in Toronto.

• Xstrata

www.xstrata.com

Xstrata is a major global diversified mining group, listed on the London and Swiss stock exchanges. Xstrata has projects in East Coast Canada.

Some of the Key players in Canada market

• Teck Resources

www.teck.com

Teck is a diversified resource company committed to responsible mining and mineral development with major business units focused on copper, metallurgical coal, zinc and energy.

• Gold Corpwww.goldcorp.com

Goldcorp is the lowest-cost and fastest growing senior gold producer with operations and development projects situated in low political risk countries throughout the Americas.A Canadian company headquartered in Vancouver, Canada, Goldcorp employs more than 10,000 people worldwide.

• Valeinco www.valeinco.com

Vale Inco is a wholly-owned subsidiary of Vale (Vale S.A.) of Brazil. Vale is the second largest mining company in the world, with a market capitalization of more than US$ 125 billion. Vale Inco has over 12,000 employees worldwide and had net sales last year of over US$8 billion.

Some of the Key players in Canada market

• Cameco Corporationwww.cameco.com/mining

Cameco is a world leader in low-cost uranium production. Their operations provide 16% of world mine production and they have approximately 480 million pounds of proven and probable uranium reserves and extensive mineral resources.

Cameco has controlling ownership of the world's largest high-grade uranium reserves and low-cost operations in northern Saskatchewan, Canada.

• Inmentwww.inmetmining.com

Inmet is a Canadian-based global mining company that produces copper, zinc and gold. We’re active in production, development and exploration — three key components to delivering sustainable growth and long-term value for our shareholders.

• Kinross www.kinross.com

Kinross is Canada’s third largest gold producer, running a portfolio of mines in Russia, Brazil, Chile, America and more. Kinross employing approximately 5,500 people worldwide. It is the third-largest gold mining company in North America by reserves and seventh in the world in production.

Minimum Investment Restrictions

• No barriers to foreigners establishing a new business in

Canada’s minerals and metals industries

• Equal treatment for domestic and foreign investors

• Investment Canada Act

– 100% foreign ownership

– Restrictions on Uranium

Taxation Regime

• Federal corporate income tax

– Tax rate is 19.5%

• Provincial and Territorial taxes

– The corporate income tax generally follows federal

income tax rules – rates 9.9% to 16%

• Reducing corporate tax rate to 15% by 2012

Oil Reserves – Driving Alberta Economy

Canada Iran Iraq Kuwait UAE Venezuela Russia Libya Nigeria U.S.A

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Current Canada Team Focus

• Expand our customers database

• Explore new business opportunities in Canada market

• Working closely with

– Canadian Mining Association

– Canadian Institute of Mining (CIM)

– Prospectors & Developer Association of Canada

(PDAC)

– State Governments in Australia and Canada

– Austrade Mining team in Australia, US, and LAT

America

Austrade Canada Program for Mining

• Prospectors and Developers Association of Canada Trade Show and

Conference

– Largest mining finance and exploration trade event

– March 2011 Toronto

– Fourth year, with a highlight this time on introductions to Canadian

sources of finance for exploration in Latin America

• Canadian Institute of Mines Trade Show and Conference May 2011

Montreal

– Second Australian participation

• Go Expo Oil and Gas Trade Display June 2011 Calgary

– Fourth Australian mission to this and alternating Global Petroleum Show

– Largets oil & gas show in Americas

Useful websites

We suggest you visit the following sites:

• Natural Resources Canada

• Prospectors and Developers Association of Canada

• Canadian Mining Association

• Canadian Association of Mining & Services for Export

CAMESE

• Minerals and Mining Statistics Online

• Canadian Institute for Mining, Metallurgy and Petroleum

Planned Events 2010-2011

Event Location Dates

Education Internationalisation Roadshow Vancouver Toronto Montreal Sept 2010

Universities Research Mission – Life sciences Vancouver Toronto Montreal Nov 2010

Superannuation Funds Mission to Canada Toronto Montreal 21-23 February, 2011

Prospectors and Developers Association of Canada Show and Conference – Explorers financing mission

Toronto 6-9 March 2011

NSW Clean Technology Mission to Americana and Universities Research Mission

MontrealVancouver Toronto

21-25 March 2011

Canadian Institute of Mines Trade Show Montreal 22-25 May 2011

NAFSA,, Universities Conference Vancouver 29 May - 3 June

Go Expo Oil & Gas Show Calgary 7-9 June 2011

Discover Australia Wine & Food Shows Toronto Vancouver, Montreal, Calgary

June 2011

Go Global Show (education), Vancouver Toronto Montreal September 2011

Green Build Toronto 5-7 October 2011

How we can help you?

• Identify market opportunities

• Market research

• Access to key customers/govt officials

• Trade events and trade missions

• More strategic approach to Region; shared knowledge of

markets in Region

• Ability to migrate clients within Region; shared

knowledge of clients within Region

• Inward/outward investment facilitation

…you get to learn about Hockey and support a

Team

Hockey is Canada’s game

Our aim is to convince Australian exporters

and investors to capitalize on the huge

opportunity that Canada presents

due to its many similarities with

Australia