By Jennifer LeClaire

In a business world that’s gone global, Canada’s multicultural work force is a boon for international firms. Add to that a catalogue of world-class higher education achievements; affordable, skilled labor; low turnover; and universal healthcare policies; and it is easy to appreciate why Canada attracted more than $30 billion in foreign direct investment in 2005.
Canada’s labor advantages begin with its focus on education. When it comes to educational investment, Canada is at the top of the spending list and its investment is bringing measurable returns. More than half of Canadians ages 25 to 35 boast a post-secondary education, according to the 2006 IMD World Competitiveness Yearbook. Canada’s progressive immigration policies are also adding to its allure in a global marketplace.
Indeed, the world’s most successful cities are global talent magnets, and the Canadian cities of Vancouver and Toronto are among them in Richard Florida’s view. Florida is a professor of public policy at George Mason University, author of The Flight of the Creative Class: The New Global Competition for Talent, and founder of the Creativity Group, a successful for-profit think tank. Florida argues that “what makes these cities such formidable challengers to U.S. regions” is that they “not only boast a high immigrant population, but a diverse one too.”

Education Abounds
Educational opportunities abound in Canada. The nation is home to world-class colleges and universities with a diversity of students and degree programs to serve them. The country spent $73.2 billion on education in the 2001–2002 academic year, and full-time university enrollment is on the rise. In fact, enrollment in Canadian universities passed the one-million-student mark in 2004, according to a recent study by Statistics Canada. Sixty-four percent of those students were 18 to 24 years old.
Further demonstrating Canada’s growing multiculturalism, a record 75,200 students came from outside the nation in 2004. Fifty percent of foreign student enrollment came from Asian countries, with Ontario, British Columbia, and Quebec attracting about 75 percent of all international students. There are about 100,000 foreign students in Canada who could be eligible for work permits under the Off-Campus Work Permit Program, according to Citizenship and Immigration Canada — all clear advantages in a world that is demanding more knowledge workers.
“Foreign students make a significant contribution to Canada,” says Monte Solberg, Minister of Human Resources and Social Development. “They enrich campus and community life with new ideas and new cultures, and they are an important pool of potential future skilled workers that Canadian businesses need to remain competitive. With Canadian work experience, foreign students will be able to integrate into the Canadian labor force more quickly.”

Exploring Canada’s Diversity
Beyond its student population, Canada is among the most diverse of nations. Canada welcomed 255,000 immigrants in 2005, almost 0.8 percent of the population and the highest percentage of any industrialized country. According to the Organization for Economic Cooperation and Development, 18.2 percent of Canada’s 32.8 million residents were born outside the country. That compares to 12.2 percent for the United States and a mere 4.8 percent for the United Kingdom. China and India have been the leading sources of Canadian immigrants since 1999, and Toronto has more residents born outside the country than any other city except Miami, according to the United Nations’ Human Development Report.
As our world has become increasingly interconnected, ethnically diverse staff and the attendant abilities to communicate across cultures have provided a business boom for Canada, says Usha Haley, professor of International Business and Director of the Global Business Center at the University of New Haven. “Research has shown that immigrants often take more risks to better their lives than native populations — something demonstrated by their ability to pull up roots and move in search of a livelihood,” Haley says. “This attitude also reflects into their new communities and provides Canada with an important competitive advantage in its search for foreign direct investment.”
Still, Canadian employees’ cross-cultural fluency may provide the most immediate advantage to foreign multinationals, Haley adds. She points to New Jersey-based telecom operator Global Crossing. The company set up a call center in Montreal to handle conference calls for U.S. companies. Its Canadian operators can field calls in 16 languages. IBM Business Consulting cites that same advantage, in addition to others.
“There’s good access to skilled resources in Ontario. We rely on that, particularly for contact centers where you need people to have a variety of languages. There’s a great university-educated population whom we can draw upon as well,” agrees Paul Kocher, a partner with IBM Business Consulting Services.
But Canada’s labor advantages are not all about language, as evidenced by IBM’s Bromont, Quebec, plant, which has continued to expand since it opened its doors in 1972. Over the past few years IBM has invested more than $1 billion in the plant, which employs 2,800 people and produces 30 million microelectronic components each year.

Encouraging Employment Policies
Canada’s employment policies are business-friendly. The nation offers relatively low labor costs compared to the United States. In fact, KPMG’s 2006 Competitive Alternatives study puts the cost of Canadian workers at 11 percent below the cost of comparable U.S. workers. What’s more, the strengthening of Canada’s currency has lessened the gap between Canadian and U.S. costs. Canada’s overall work force costs are the lowest in the G7. That’s an important distinction, since KPMG reports that labor costs typically represent the majority of location-sensitive costs for both manufacturing and nonmanufacturing operations.
“Selecting the best site for a business operation requires balanced consideration of many factors, including business costs, business environment, personnel costs, and quality-of-life issues,” says Mark MacDonald, director with KPMG’s advisory practice in Canada. “There is often a tradeoff between larger cities with deeper labor pools and better support infrastructure, and smaller cities, which tend to have lower labor and facility costs.”
Canada offers yet another advantage to employers: universal healthcare. The government-run program is designed to ensure a healthy work force while also reducing employee-benefit costs.
Finally, Canada’s immigration policies are flexible enough to accommodate the needs of growing companies, according to Alan Minz, consul for Investment & Corporate Relations at the Consulate General of Canada in New York. Fast-track immigration is allowed for relevant employers under Canada’s Provincial Nominee Programs, and high-tech workers do not require special employment verification like they do in the United States. This makes it easier to pull together worldwide research or production teams in Canada.
“Instead of insisting on official certification papers from training or professional institutions, in some cases provincial governments are allowing companies to test applicants’ skill and language levels to their satisfaction and to present affidavits,” Minz explains. “This means that the time from job offer to arrival in Canada is shortened, sometimes to weeks or even days for relevant workers.”

Building on Its Strengths
Canada offers compelling education and employment advantages that most other places in the world don’t rival — and the nation has plans to build on its strengths. In fact, the Canadian government has launched several successful strategies for developing its labor force in general and highly skilled workers in particular.
Canada’s Innovation Strategy encompasses a comprehensive reform agenda backed by a set of specific targets, including measures to increase support for university research infrastructure, commercialization of public research, and new technologies to improve the productivity and innovation performance of the nation’s economy. The Canadian government has also launched programs designed to help small businesses hire skilled workers, and although the country already boasts one of the lowest gender employment gaps for highly educated women, it is pursuing programs to attract more women to the science and technology fields.
Canada’s new government has a new vision that takes Innovation Strategy one step further. That vision is Advantage Canada, a long-term plan that will create opportunities for families and businesses to succeed by letting government do what it does best: reduce taxes, invest in education, and train and transition the work force. Advantage Canada intends to build on five key advantages that government leaders view as critical to the nation’s future economic successes. Specifically, the plan calls for the reduction of taxes for all Canadians and establishes the lowest tax rate on new business investment in the G7. It also plans to eliminate total government net debt in less than a generation; reduce unnecessary regulation and red tape and increase competition in the Canadian marketplace; build a more modern infrastructure; and create the best-educated, most skilled, and most flexible work force in the world.