Canada's leading position as a business destination being eroded, according to Economist Intelligence Unit Study sponsored by Accenture



    Other countries are making business-friendly reforms and some have caught
    up with Canada during the last few years.

    Research paper provides key insights from top Canadian business leaders.

    OTTAWA, March 21 /CNW Telbec/ - Canada faces challenges in maintaining
its status as one of the most business-friendly countries in the world,
according to a new Economist Intelligence Unit research paper sponsored by
Accenture (NYSE:   ACN) titled Not left behind: How Canada can compete.
    According to the research findings, which will be presented at The
Economist's Business Roundtable with the Government of Canada in Ottawa, the
nation's business environment will improve only slightly in the years ahead,
providing other countries with the opportunity to catch up.
    Only two years ago Canada's business environment was rated the best in
the world; now it is in third place, behind Denmark and Singapore, but ahead
of the fifth-place United States. Canada's ranking is unlikely to change much
over the next five years, according to the research, as competing countries
are expected to undertake only modest reforms.
    "Although the Economist Intelligence Unit continues to think highly of
Canada's business environment, there are some obvious areas in need of reform.
Unfortunately, the issues come down to a large degree to the very nature of
Canada's federal system", said Matthew Sherwood, Senior Economist.
    The research report finds that Canada faces challenges in three key
areas: political effectiveness (the ability to implement policy), taxation and
the labour market.
    Canada slipped to 15th among the 60 countries surveyed in terms of
political effectiveness - better only than Japan and Italy among the
G7 nations. Noteworthy is the finding that Canada is hampered by barriers to
internal trade between the provinces. At the same time, other national
governments, especially in smaller European countries, are expected to become
more efficient.
    Companies in Canada face a significant tax burden, shouldering a higher
share of government tax revenue than in most other countries. They also pay
the highest marginal effective tax rate on capital in the developed world.
Hampering reform of the tax system is the complex fiscal relationship between
the federal government and the provinces.
    The labour environment is expected to deteriorate over the next five
years, owing to short-term shortages of highly educated and skilled labour.
Canada also scores less well than other developed countries in terms of labour
laws, flexibility and costs.
    The report includes interviews with Canadian corporate leaders in which
they pinpoint the most pressing problems with regard to political, tax and
labour issues. Interviewees include:

    
    - David Blanchard, president and chief executive officer of Unilever
      Canada
    - Duncan Hawthorne, president and chief executive officer of Bruce Power
    - Peter Brown, chairman and chief executive officer of Canaccord Capital
    - Robert E. Brown, president and chief executive officer of CAE
    - Lawson Hunter, executive vice-president of BCE
    - John Weaver, president and chief executive officer of
      Abitibi-Consolidated
    - Gordon Nixon, president and chief executive officer of RBC
    - Paul Douglas, president and chief operating officer of
      PCL Constructors' Canadian Operations
    - Don Drummond, senior vice-president and chief economist of
      TD Bank Financial Group
    - Bill Morris, country managing director for Accenture in Canada
    

    "One of the opportunities for business in Canada is to nurture more
competitive markets within our country and to help, promote and applaud the
development of high-performing companies with head offices within Canada,"
Accenture's Morris said.
    The report is available free of charge at
www.accenture.ca/economistresearch

    Notes for editors:

    Not left behind: How Canada can compete is an Economist Intelligence Unit
white paper, sponsored by Accenture. The research is based on the business
environment rankings and forecasts compiled by the Economist Intelligence
Unit, as well as in-depth interviews with senior executives from a wide range
of large Canadian companies.

    About the Economist Intelligence Unit

    The Economist Intelligence Unit is the business information arm of The
Economist Group, publisher of The Economist. Through our global network of
more than 700 analysts and contributors, we continuously assess and forecast
political, economic and business conditions in 200 countries.
    As the world's leading provider of country intelligence, we help
executives make better business decisions by providing timely, reliable and
impartial analysis on worldwide market trends and business strategies.

    About Accenture

    Accenture is a global management consulting, technology services and
outsourcing company. Committed to delivering innovation, Accenture
collaborates with its clients to help them become high-performance businesses
and governments. With deep industry and business process expertise, broad
global resources and a proven track record, Accenture can mobilize the right
people, skills, and technologies to help clients improve their performance.
With approximately 146,000 people in 49 countries, the company generated net
revenues of US$16.65 billion for the fiscal year ended Aug. 31, 2006. Its home
page is www.accenture.com.




For further information:

For further information: Media contacts: Joanne McKenna, Economist
Intelligence Unit, +44 (0)20 7576 8188, joannemckenna@eiu.com; Sarah Thompson,
Accenture, (416) 641 4416, sarah.thompson@accenture.com; Questions about
Canada Business Roundtable: Rachel Golden, Economist Conferences, (212) 698
9730, RachelGolden@economist.com


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