By Luke Mayer, Commercial Real Estate Advisor, The Staubach Company-Western Canada

On a recent trip to Texas I asked an American colleague what he knows about Canada.
"It's cold," he responded with a smile.
"Is that the first thing that pops into your head when you think of Canada?" I asked.
"Oh, and beer, I think of beer," he replied.
He later went on to tell me he associates Canada with an image of pristine beauty, mountains, rivers, and forests; a nation with abundant natural resources; and friendly people. All of that is true I assured him, but the opportunities in Canada go far beyond spectacular views and friendly faces — and the world is taking notice.
Canada ranks number one worldwide for "best business environment," according to the Economic Intelligence Unit's global business rankings forecast, 2004–2008. The factors driving such favorable reviews are endless: a skilled labor force, high-tech capabilities, low production costs, investment tax rates among the lowest of the world's developed countries, and the list goes on and on.
But possibly the most vital economic advantage in Canada is the nation's world-class transportation infrastructure and easy access to North American and emerging Asian markets, offering foreign businesses a logistical opportunity for goods distribution.

Infrastructure Status
Canada boasts one of the top transportation infrastructures in the world, voted number-one by the World Economic Forum Global Competitiveness Report — an impressive statistic for a nation that encompasses the second-largest landmass on the planet. Here is an inside look at a few of the nation's current transport capabilities:

Roads
Canada's road network consists of approximately 1.4 million km of roadways, including the Trans Canada Highway, the longest highway in the world, which links all 10 provinces. Canada's road network is fully integrated with that of the United States, including 18 major border crossings that accommodate nearly 70 percent of Canada's trade with its southern neighbor. Due to steady growth in cross-border traffic, the government of Canada has allotted a sizeable amount of funds for road maintenance and infrastructure upgrades, often carried out through public-private partnerships.
For U.S.-based companies, a significant logistics opportunity exists because of the current low back-haul rates from otherwise empty truck trailers returning south. For example, U.S. fruit and vegetable exports to Canada from the southern states and U.S. manufacturing exports from the east-central industrial regions allow businesses to take advantage of low-cost return transport of Canadian goods to key U.S. markets.

Rail
In 2005 Canadian railways witnessed a dramatic increase in volume from both east-west and north-south transport of bulk commodities, merchandise freight, and intermodal traffic, totaling some 270 million metric tons of freight annually. With additional service to the United States and Mexico, Canada's rail system is well-equipped to service the entire NAFTA (North American Free-Trade Agreement) trading region. The two major carriers in Canada, Canadian Pacific Railway (CPR) and Canadian National Railways, cover a combined 33,000 miles, from Vancouver to Halifax, Montreal to New Orleans, Calgary to Houston.
In the fourth quarter of 2003, CPR transferred assets to IBM Canada Ltd. as part of a seven-year, $200 million agreement reached with IBM to operate and enhance CPR's computing infrastructure. The arrangement will reduce CPR's cost over time and allow remaining information technology staff to focus on applications that enhance efficiency, although presently there is only room for a very small margin of improvement: CPR has a world-renowned reputation with an on-time efficiency rate of nearly 95 percent.

Ports
Canada has access to three oceans, the Pacific, the Atlantic, and the Arctic, and includes the world's longest inland waterway open to ocean shipping — the Great Lakes/St. Lawrence Seaway system. The Seaway provides a direct route to the industrial heart of North America. There are more than 300 commercial ports and harbors handling various local and global goods. Major ports include Vancouver, Montreal, Halifax, Port Cartier, Sept Iles/Pointe Noire, Saint John, and Quebec City. Modern container facilities at major ports connect with inland container trains to ensure rapid movement of goods throughout the continent.
Western Canadian ports also offer the shortest sailing distance from North America to the Asia-Pacific region. The Port of Vancouver alone handled approximately 75 million metric tons last year, up 12 percent from the previous year, with China leading both inbound and outbound container shipping tonnage, totaling nearly 16 million metric tons of goods.

Airports
Canada's air transportation system includes some 300 airports, 10 of which are major international centers. Annually, Canadian airports handle about 60 million passengers and 1,500 metric tons of merchandise. Canada's major carrier, Air Canada, offers a wide-ranging domestic and international route and, in affiliation with smaller regional carriers, links all regions of the country to the rest of North America and the world. Toronto is the busiest airport in the country, handling nearly half of the nation's total passenger traffic.

Access to U.S. and Asian Markets
Canada and the United States are no longer viewed as two separate markets, but rather as components of a greater geographic market organized under NAFTA. Two-way trade between the two countries totaled half a trillion dollars in 2005.
In order to stay competitive, many companies in the United States have taken full advantage of Canada's transportation infrastructure and geographic location, realizing that many Canadian production hubs are actually closer to U.S. target markets than American production sites. Specifically, major Canadian industrial sites such as Windsor, Toronto, and Montreal are actually closer to such major U.S. markets as New York, Boston, and Chicago than are popular production hubs in the southern United States.
There is no doubt that the emergence of China as an economic superpower has forced industrialized nations to shift global supply chains and realign patterns of trade and investment. Canada has taken advantage of its strategic location and plans to continue to enhance its position by initializing the Pacific Gateway Strategy. This government strategy includes $590 million in specific measures to support the infrastructure demands of linking Canada and NAFTA with Asia-Pacific markets. The proximity of Canada's West Coast ports to Asian markets offers a sailing-time advantage of approximately two days over all other locations in the Western Hemisphere.

Smart Borders
To accommodate the growth in international trade and commerce, Canada and the United States have signed a pact to work together to create a "Smart Border." The Declaration outlined a 30-Point Action Plan, which provides for ongoing collaboration in identifying and addressing security risks, while efficiently expediting the legitimate flow of people and goods across the Canada-U.S. border. Some highlights follow:
• FAST lanes for pre-approved low-risk commercial traffic opened at Windsor-Detroit, Sarnia-Port Huron, and Fort Erie-Buffalo.
• Automated permit ports, transponder identification systems, and joint processing centers are being tested and deployed.
• Today, border wait times average less than 10 minutes, one of the most efficient systems in the world.

The truth is, as we progress into the twenty-first century, international relations will not be defined by the "nation" itself with its conventional boundaries, but rather by geopolitical trading regions and their ability to integrate into a global economy. Canada, a country of exceptional beauty, plentiful resources, and friendly people, also just happens to be the number-one business environment on the globe, strategically located between two of the greatest economic regions the world has ever seen. 66

Sources: The Government of Canada; CPR Corporate Profile and Fact Book, 2005; North American Transportation Statistics Database; Port Vancouver Statistics Overview, 2005