20 Reasons Why Canada is Investor’s Ace

Canada has repeatedly demonstrated good economic prospects during the last 12 months; no wonder investors start to overweight Canadian investments in their global portfolios. Scotia Capital in the latest issue of Capital Points mentions 20 advantages of Canadian economy.

  1. The Bank of Canada will be probably among the first major central banks to call off record low interest rates implemented to fight the recession. Most of the experts believe, it will be part of the June announcement. It is encouraging to see that the Bank is confident enough to return back to normal regime.

  2. Strong Canadian dollar. CAD appreciated 22% on year to year basis to USD and it is on a good way to reach parity with the American counterpart. CAD will be a safe haven for many investors.

  3. The same situation is when concerning CAD vs. AUD. Looney is already some 5% over the Australian dollar, however Reserve Bank of Australia is already finishing its tightening cycle, while BoC has not begun yet.

  4. Canadian stellar fiscal responsibility in the debt troubled world. Fiscal deficits are projected to be chopped down to 1% in the next five years; total debt-to-GDP ratio is now around 2/3 of OECD average, not to mention the US or even Japan alone.

  5. Corporate revenue is becoming fuelled by our strong recovery. Companies need money now.

  6. Natural resources are still wanted and they will be wanted even more. Well, we have them…

  7. Corporate tax should fall down to highly competitive 15% in 2012. While others will have to raise taxes to repay huge bailouts, foreign investors will be knocking on our door.

  8. Productivity growth has a good potential to start going up, while our southern neighbour will face quite the opposite – its peak is unsustainable.

  9. Canadian real estate bubble is almost forgotten. That’s not the situation in countries like USA, UK, Ireland or Spain.

  10. Non-financial corporate balance sheets are sound and fit. Leverage wasn’t a big hit in Canada.

  11. Our banking system was ranked the healthiest in the world by the World Economic Forum. Again.

  12. No quantitative easing in Canada!

  13. We may be not a dream country for free market worshippers, however our regulatory system is quite modest and flexible, compared to our friends, who are on a good way to make it much more rigid in upcoming years.

  14. Tax incentives on equipment investment. Combine with #7 for greater effect.

  15. In the light of election “rampage” of the last several years it may sound crazy, but yes – Canadian political situation is not very risky for investors.

  16. With the already mentioned fiscal stability, the risk of sovereign default is still kind of a myth, when talking about Canada.

  17. All the opportunities in idea and seed financing are not fully recognized. But there is a lot of potential.

  18. Effective venture capital paperwork in the Federal Budget.

  19. Diverse and young population with lot of connections.

  20. Last but not least – well educated population.

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