Alberta rated as best investment climate
British Columbia still in last place
Contact:
Jason Clemens, Director of Fiscal Studies
The Fraser Institute, Tel: (604) 714-4544
Email: jasonc@fraserinstitute.ca
Release date: 26 June 2001
VANCOUVER, BC—Canadian investment managers, responsible for over $282 billion in assets under administration, have ranked Alberta as the province with the best investment climate in the country according to the results of the 2001 Spring Survey of Senior Investment Managers, released today by the Fraser Institute.
Alberta breaks away from the pack
For the first time since the inception of the Investment Managers Survey, a single province, Alberta, emerged with the best investment climate in the country. On a scale of zero to 10, Alberta received a score of 8.6, a full 1.3 points higher than the second place province, Ontario, which received a score of 7.3. Ontario in turn, is a full 2.0 points higher than the third place province, Saskatchewan. Alberta's and Ontario's scores have been similar in previous years.
As was the case in all previous Investment Managers Surveys, most of the remaining provinces are clustered together. The third place province, Saskatchewan, scored 5.3 while the last place province, British Columbia, scored a 4.0.
"The difference between the third-and-last-place provinces is 1.3 points, the same as between the first-and-second place provinces. This illustrates both the relatively close performance of most provinces, as well as the overwhelmingly strong performance of both Alberta and Ontario," says Jason Clemens, director of fiscal studies at the Institute and co-ordinator of the survey.
British Columbia still in last place
British Columbia has retained its last place position for the last 3 years of the Investment Managers Survey. This survey was taken before the recent election, so the results do not include any possible effects of a new government in British Columbia.
"Consistent with the survey's prediction, BC has performed poorly over the last decade in attracting investment," explains Clemens.
The movers
New Brunswick fell from third position in 2000 to sixth in 2001, while PEI dropped from seventh to ninth position, showing rather pronounced declines in their relative investment climates. Quebec, on the other hand, advanced to fifth from seventh position between 2000 and 2001.
"Interestingly, Quebec is the only province to consistently improve its investment climate ranking over the last 3 years," notes Clemens.
Economic policies promoting globally-competitive firms
In addition to being asked to rate Canada's respective provincial investment climates, senior investment managers were also asked whether each provincial government maintained the necessary economic policies to promote globally-competitive companies.
Positive and Negative Responses
Alberta and Ontario led the nation with 95.7 percent of respondents indicating that both provinces maintain the policies necessary to foster globally-competitive companies. Quebec received 52.2 percent positive responses. Positive assessments for the remaining provinces ranged from 30.4 percent for Saskatchewan to no positive responses for PEI.
British Columbia received the highest level of negative responses; 73.9 percent of respondents indicated that it failed to maintain the necessary economic policies required to foster globally-competitive firms. Quebec received the next highest negative score with 43.5 percent of respondents indicating that it, too, failed to maintain the necessary economic policies for promoting world-class companies. Negative responses for the remaining provinces ranged from 39.1 percent in PEI (and 60.9% don't know) to 17.4 percent in Manitoba.
Keys to success: taxes, infrastructure, and regulations
A competitive tax regime, including both personal and corporate taxes, the maintenance of adequate infrastructure, and a proper regulatory environment were indicated as the path to creating and maintaining a positive investment climate.
Equally clear is that both the provisions of social services by government and subsidies to business are not important factors in establishing a positive investment climate.
Minister of Finance's approval drops
The approval ratings for the Minister of Finance, Paul Martin, dropped slightly from its previous
level of 85%, recorded in the Fall 2000 Survey. In this survey, 83 percent of survey respondents indicated that the Minister of Finance was doing an excellent, very good, or good job.
Bank of Canada rating drops
The approval ratings for the Bank of Canada also dropped slightly—to 83 percent from its previous level of 89 percent.
About the Survey
Surveys were mailed to senior investment officers at 130 investment management firms across Canada. Twenty-six responses were received. The respondents manage in excess of $282 billion worth of pension assets. Numbers may not add up to 100 percent due to rounding. Statistical confidence levels were not assigned to the results.
Established in 1974, The Fraser Institute is an independent public policy organization based in Vancouver, with offices in Calgary and Toronto.