Economic Development - Canada

Part
01
of three
Part
01

Government Role in Economic Development

There are a number of things that investors look for from a government before investing in a particular region. Some of this information can be subjective such as the likelihood of a suitable work force, while some is more specific such as the existence of tax incentives for research and development. The following will examine four main areas of interest to investors: regulations and taxes, local demographics, existing infrastructure information, and direct governmental incentives.

Regulations and Taxes

Licenses, permits, regulations and taxes are obvious considerations when investing in a particular area. Questions include "Are there any potential tax benefits to this location?" or "Might there by unexpected expenses?". Provinces have departments aimed at bringing investments into their region, and may introduce “Several initiatives to reduce red tape and streamline regulations” such as in Saskatchewan. Governmental entities are where to look for regulation and tax information.

Local demographics

Demographic information of interest to investors may center on the available work force and customer base, but can also include questions about local lifestyles. Some of the most prominent thing to look for in a new location is the companies' environment such as start-up population and business incentive towards start-ups. As such, it is important to conduct research on the benefits that are provided to new companies. The most important one would probably be tax benefits such as provincial taxes, percentage state tax for commercial leases, and others. In Saskatchewan, the Provincial tax is 6% which is applied in addition to the Federal tax (7%). Businesses that have a reported revenue of $1.5 million need to submit their income forms every year whereas businesses with an annual revenue of over $1.5 million are required to report every 3-4 months. Governments can provide assistance with demographic data and “facilitate customer and market research.” A few organizations that are helpful in this regard are Statistics Canada, the Canadian Intellectual Property Office, Industry Canada's SME Benchmarking Tool, and others.

Existing infrastructure information

Investors want to know about the mechanics of operating a business in a particular location, such as the availability of sufficient utilities infrastructure and the commutes of the employees by road or public transit. According to Innovation Saskatchewan, Saskatchewan is a great place to open a new business at the moment. Over the last 10 years over $130 million has been invested in the province. The population growth and the current demographics of the population also help a great deal with attracting investors. According to Statistics Canada, the province "has the third largest percentage of workers aged 15 to 24 in Canada." Moreover, it is predicted that over 200,000 people will reach employment rate in the next 15 years, which would mean that there will be a 20% bigger work force available in the next 15 years (as of April 1, there are 1,161,365 people living in Saskatchewan). A younger workforce could also mean bigger innovation and a better environment for start-ups as younger people are more in touch with technology and more tech savvy than the older generation.

Governmental incentives

In Canada, there are provincial and national governmental incentives offered for a variety of purposes in order to assist business investment. Investors look for these when determining where to go. Saskatchewan offers government grants for purchasing office equipment and recruiting staff. "The Canadian SR&ED tax program lets founders get back much as 35 percent of what they spend on R&D costs." Another thing that can be very attractive is the Canadian tax return policy which allows for companies to get money back depending on their declared expenses and their revenue. The agency responsible for tax returns in Saskatchewan is the Canada Revenue Agency (CRA). Many online tools are available to assist with finding and applying for these programs. The Funding Portal is a great way to look for relevant and less known funds for a new company.

In conclusion, governments can provide information to potential investors in a number of areas to assist in their decision-making. These areas include regulations and taxes, local demographic information, infrastructure, and governmental incentive programs.



Part
02
of three
Part
02

Economic Development - Government timeline

The investor considering opportunities in a region of Canada benefits from the pro-investment stance held by Canadian government at both the national and provincial level in Saskatchewan. Representatives from a business can engage the government immediately in their investment process through direct communication with government officials.

Below you will find our overview of the timeline for government engagement when investing in Saskatchewan, Canada.

Saskatchewan Provincial government

Potential investors in Saskatchewan are advised to engage with the government by contacting staff representatives immediately in their investment process. Through conversation with government employees, potential investors can receive comprehensive guidance on every step to take to ensure the most efficient investment path for their circumstances and goals. This advisement is offered at no cost.

Other methods of government engagement are provided as well, such as business registration forms and data for those engaging through research. The government initiative, ThinkSask, was created to encourage those considering investment in Saskatchewan, encouraging early engagement.

Canadian Government

Representatives from businesses contemplating investment in Canada will find a pro-investment government. The government's website provides an array of information on industries, regions, and necessities for starting a business in Canada. The government emphasizes early contact, offering advisement on available incentives, relevant regulations, and tax laws with a government investment officer. Those officers, or trade commissioners, offer free advisement for potential investors that includes aid in developing a business case, strategic market intelligence, contacts for government officials able to provide assistance, and referrals within the business community.

Other locations within the government website also offers a guide on starting a business. In this instance, the recommendation offered is also for immediate engagement with the government through registration of the business name.

Conclusion

The timeline for government engagement for potential investors in Canada can occur in the contemplation stage of the investment process. The provincial and national governments encourage such contact, offering to provide a streamlined process and free comprehensive guidance.
Part
03
of three
Part
03

Investment Information

Canadian businesses seeking investing information will find few sources available apart from those provided by their own government. The Canadian Government's website offers comprehensive information on the investment process, industry sectors, and funding opportunities, plus free advisement. The Saskatchawan Provincial Government offers a full range of information as well, reducing the need for further investment research.

Below you will find an overview of the resources potential investors utilize when seeking investment information or opportunity.

Methodology

When seeking new information or new resources, a Google search is the first step for most people. Business leaders performing searches related to investing in Canada will find mostly government websites interspersed by some blogs. A search specific to investment in the Saskatchewan area returns similar results, primarily government resources. The second search is different only because the government websites are outranked by those of the Saskatchawan Government and one mutual fund finds inclusion in the search results. A mutual fund only offers value for individual investors, making it a worthless result in this context. Given these results, we were left to conclude that investors in Canada rely on Government sources for information. The wealth of information available in government sources support this conclusion, leaving no motive for potential investors to continue their research. In the event that a searcher does feel the need for more resources.

Sources for Investment information

1. The Canadian Trade Commissioner Service: This was the first organic result in searches for investment information for Canada. It includes information on prominent sectors of Canadian industry, funding information, a guide to starting a business in Canada, and information on provinces and territories. It also offers free advisement for current and potential investors.
2. Government of Saskatchewan: This was the 1st result when a search for the province was performed. It offers information about businesses in the region, the state of the economy and the major industries, and the investment process in the Saskatchawan Province.
3. Resources for Starting a Business: This is part of the Saskatchawan Government's website. Since the investor must utilize the government page to reach this resource list, we found the government site was still the primary source. The resources are limited to investment through the means of new business creation.

Conclusion

There are few resources immediately available to the business aiming to invest in Canada aside from the Government sources. However, these sources are comprehensive and well-maintained, providing many resources and even no-cost advisement. There would be little reason to seek other resources, leading to the conclusion that these government sources are what investors in Canada utilize to obtain information.


Sources
Sources