VANCOUVER, BC-Alberta continues to set the pace and leads
the country in terms of creating and maintaining a positive
investment climate, while Ontario is struggling, according to
the 2008 edition of the
Canadian Provincial Investment Climate Report, released today by independent research organization the
Alberta was Canada's top province with a score of 8.5 out of
a possible 10 in the Institute's annual index that objectively
evaluates the public policies that create and sustain a
positive investment climate. Saskatchewan and British Columbia
ranked second and third in a virtual tie (Saskatchewan scored
5.9 out of 10, BC 5.8).
But the most striking result is that Ontario, Canada's most
populous province and largest economy, ranks fifth overall with
a score of 5.0, behind fourth place Newfoundland & Labrador
which scored 5.4.
"Alberta is clearly in a league of its own among Canadian
provinces in terms of creating a positive investment climate,
while Saskatchewan and BC also have strong showings," said
Niels Veldhuis, Fraser Institute director of fiscal studies and
co-author of the report.
"Much more troubling for the nation is the poor ranking for
Ontario. Historically, Ontario has ranked first or second but
in recent years the province has implemented polices that are
not conducive to attracting investment."
The remainder of Canada's provinces all scored below 5.0,
indicating relatively poor performance in terms of creating and
maintaining a positive investment climate. Manitoba scored 4.3;
New Brunswick scored 3.7; Quebec scored 3.5; Nova Scotia scored
3.3 and Prince Edward Island ranked last with a score of
"Quebec's dismal score is very troubling given that it is
one of Canada's most populous provinces and of great importance
to the Canadian economy," added Keith Godin, co-author of the
study and Fraser Institute senior policy analyst.
The index is composed of seven areas identified by Canadian
investment managers as the most important policies contributing
to investment climates: corporate income tax, fiscal prudence,
personal income tax, transportation infrastructure, corporate
capital tax, labour market regulation, and burden of
Alberta ranked first on most indicators including corporate
income taxes, corporate capital taxes, personal income taxes,
fiscal prudence, and labour market regulation. It ranks second
on the overall burden of government regulations or "red tape."
However, Alberta ranked seventh out of 10 on transportation
infrastructure with a score of 5.7 out of a possible 10. This
component assesses the transportation infrastructure in each
province, including highways, urban transit, air, rail, and
marine service by examining the extent, use, accessibility,
accessibility, cost, and condition of each mode of
Saskatchewan and British Columbia also receive high ratings
on tax and fiscal prudence measures. BC and Saskatchewan rank
second and third respectively on personal income taxes and
third and fourth on corporate income taxes.
Saskatchewan (3rd) beats BC (4th) on fiscal prudence which
measures how well provincial governments have managed their
budgets and whether government spending is sustainable.
Saskatchewan (2nd) and BC (3rd) also rank well on corporate
capital taxes. Unfortunately, the overall scores of both
provinces were dragged down by there performance on
transportation infrastructure (Saskatchewan ranked 9th and BC
Newfoundland & Labrador's ranking on the overall
Canadian Provincial Investment Climate Index was greatly aided
by its first place ranking for burden of regulation and second
place ranking for fiscal prudence and labour market regulation.
However, it was ranked last for personal income tax.
Ontario scores well in transportation infrastructure and
labour market regulation (2nd in each category). It ranks in
the middle of the pack on personal income taxes (4th),
corporate capital tax (4th), fiscal prudence (5th), and the
overall burden of government regulations (5th). However, its
overall ranking is brought down by its low score in corporate
income tax (7th).
Quebec scored well on corporate income taxes (2nd), but
poorly on all other indicators. Most critically, the province
ranks ninth in corporate capital tax and last on fiscal
prudence and the overall burden of government regulations.
The remaining Atlantic provinces - New Brunswick, Nova
Scotia, and Prince Edward Island - generally trail the rest of
the country in fiscal prudence, burden of regulation, and with
the exception of Prince Edward Island (6th), corporate capital
tax. Nova Scotia is also ranked first for transportation
"The allocation of investment capital, both internationally
and domestically, is increasingly acknowledged as a leading
contributor to a jurisdiction's economic success or failure.
Provinces that receive low scores in the index are pursuing
policies that are failing in terms of providing their citizens
with increased economic opportunities and higher standards of
living," Veldhuis said.