Canada

1. Canada 1 Low Production Costs • Growing productivity, skilled workers, and low labour costs make businesses competitive. • Canada's competitive position vis-à-vis the U.S. has improved substantially since 1991. Source: U.S. Department of Labor, Bureau of Labor Statistics, August 2001 “ Our records for safety and productivity place the TMMC team among the industry’s best. And when it comes to quality, vehicles built at our Cambridge facility are among the highest rated vehicles in North America.” Takanori (Tak) Sakaue, President Toyota Motor Manufacturing Canada Inc.

2. * Employer-paid statutory benefits and wage-based taxes include: premiums for unemployment insurance plans; public medical plan premiums; public pension plan contributions; premiums for workers' compensation insurance; and other payroll taxes. Source: KPMG Management Consulting, 1999 Canada 2 Low Statutory and Employer-Sponsored Benefits Statutory and Employer-Sponsored Benefits as a % of wages • Statutory and employer-sponsored benefits are lower in Canada than in the U.S. Total payments for statutory benefits and Canadian employer-sponsored plans and time not worked are 27.1% of salary and wages compared to 41.7% in the U.S.* • Lower medical insurance premiums are an important reason for this. • Payroll taxes are lower in Canada than anywhere else in the G-7. • *KPMG Management Consulting, 1999 G-7 Comparison,

3. 0.6 Hospital, surgical, medical and major medical insurance 8.0 premiums* Short term disability, sickness 0.7 or accident insurance and long 0.7 term disability or wage continuation 0.7 Dental insurance premiums 0.5 0.1 Other (vision care, physical and mental fitness, etc.) 0.4 Canada 3 Quality Health Care at Low Cost Employer-Sponsored Health Benefits Canada and the U.S. • Canada's health care system is among the best and the cheapest in the industrialized countries: • Employer-paid health benefits as a percentage of workers' gross pay in Canada are about 22 percent of that in the U.S. • (2.1% compared with 9.6%). 2.1 Total 9.6 % of Gross Annual Payroll “The federal government’s medium-term budget position remains sound, even with full implementation of the major reforms to income taxation and new spending initiatives in priority areas such as health care and education that have been enacted or announced over the past year.” * U.S. value includes payments for retired employees Source: Employee Benefits, 1995, prepared by the Research Centre, Economic Policy Division , The U.S. Chamber of Commerce and KMPG, Employee Benefits Cost Survey, 1996. Adapted from KPMG report on Corporate Taxation and Employee Benefit Cost Guide for Large Service Firms, prepared for the ICT Branch, Industry Canada, March 2000 Statement of the IMF Mission on Canada, January 31, 2001

4. G-7 Comparison, Index: U.S. = 100 Canada U.K. U.S. Germany Italy France Japan +200 75 100 125 G-7 Comparison, Index: U.S. = 100 Canada U.S. U.K. France Germany Italy Japan +200 50 75 100 125 150 175 Canada 4 Low Transportation and Energy Costs Annual Transportation and Distribution Costs • Transportation rates in Canada are, on average, 13% lower than those in the U.S. • Canada has abundant oil, gas, coal and hydro-electric resources. • Electricity costs for industrial users are significantly lower in Canada than in the U.S. • According to a recent study, the annual electrical costs for an average manufacturer are 24% lower in Canada than in the U.S. Annual Electricity Costs Source: KPMG Management Consulting, 1999

5. G-7 Comparison, Index: U.S. = 100 Canada France Italy U.S. U.K. Germany Japan +600 75 100 125 150 175 200 G-7 Comparison, Index: U.S. = 100 Canada U.S. France Italy U.K. +300 Germany +600 Japan +2900 75 100 125 150 175 G-7 Comparison, Index: U.S. = 100 Italy Germany France Canada U.S. U.K. Japan +200 25 50 75 100 125 150 Canada 5 Low Costs for Construction, Land, Office Lease Construction Costs • Building construction costs in Canada are roughly 15% lower than those in the U.S. even after accounting for additional materials for climatic conditions. • With the exception of Vancouver Island (British Columbia), land costs in Canada are generally preferable to those in the U.S. — on average, land costs are 6% lower in Canada than in the U.S. Land Costs Office Lease Costs • Canadian office lease costs are about 75% of those in the U.S. • Lease costs include office space plus operating, utility, tax and insurance costs. Source: KPMG Management Consulting, 1999