Canada

1. Canada 1 First-Class Technological Infrastructure Technological Infrastructure* World Rank 1st • Canada's technological infrastructure is second only to the U.S. among the G-7 — we rank above or very close to the U.S. in terms of: • internet users and internet hosts, • computers per capita, and • computer instructions per second. • Building a universal, competitive, leading edge "Information Highway" is a government priority. 6th 14th 15th 19th 23rd Index 30th U.K. Canada U.S. France Italy Germany Japan * Standing among 49 countries. Index based on 12 characteristics including investment in telecommunications, computers in use, computer power, internet connections, number of telephone lines, cost of telephone calls and use of robotics. Source: World Competitiveness Yearbook, 2001

2. Canada 2 First in Internet Users and Among Leaders in PCs Internet Users Per 1,000 Inhabitants 501 488 • Canada is tops among the G-7 countries in the share of its population that uses the Internet. • Moreover, Canada is second only to the U.S. in the number of computers per 1,000 people. 281 268 245 218 152 Canada U.S. U.K. Japan Germany Italy France Source: World Competitiveness Yearbook 2001 Personal Computers Per 1,000 Inhabitants 581 549 442 389 373 369 308 Japan Canada U.K. Germany France U.S. Italy Source: World Competitiveness Yearbook 2001

3. “Indeed, in general, and across an entire range of services and business sizes, Canadian telecommunications costs are lower than they are in the United States.” Source: The Yankee Group in Canada (Canadian Market Strategies) February 1999 Canada 3 First in Internet and Wireless Affordability Internet Access Charges* – 2000 U.S. $ 93.10 59.83 56.16 49.22 Based on PPPs Peak Rate 40 hrs. Online/Month 41.72 35.83 35.40 • Canada ranks first among the G-7 in terms of wireless communications costs and second in terms of internet access charges. U.K. U.S. Canada Italy Germany France Japan * PSTN fixed charges include monthly rental fee and additional monthly charges related to discount plans, if applicable. Includes 40 one-hour calls. In France, ISP and PSTN usage charges are bundled and included under the ISP. Source: OECD, http://www.oecd.org/dsti/sti/it/cm/ Wireless Communication Costs Price per minute, 1999 in U.S. $ PPP 0.36 0.36 0.32 0.31 0.29 0.18 0.09 Toronto Rome Tokyo London Paris Berlin Boston Source: Yankee Group, Wireless/Mobile Communications Global Report, Volume 3, No. 16, May 1999

4. Canada 4 First in Telephone Affordability Annual Business Telephone Charges U.S. $ PPP 745 Canada U.K. 1067 1076 France 1177 Germany U.S. 1215 1443 Italy • Business telephone charges are lower in Canada than in any other G-7 country. Canada ranks 2nd among the G-7 behind the U.K. in residential telephone charges. 1566 Japan Source: OECD Communications Outlook 2001 Annual Residential Telephone Charges U.S. $ PPP 286 U.K. 349 Canada 355 France 360 Germany 433 Japan 440 Italy 466 U.S. Source: OECD Communications Outlook 2001

5. Canada 5 First in Telephone and Cable Penetration % of Households with Telephone Service 98.4 98 96.9 95 94.2 89.3 • Canadian households lead the G-7 in terms of telephone and cable penetration rates. Canada France Italy U.K. U.S. Germany Source: World Telecommunication Development Report, ITU, 1999 % of Households with Cable TV Subscribers* 69.5 67.0 52.7 25.9 12.0 11.6 0.4 Italy France Japan U.K. U.S. Germany Canada *Estimates Source: OECD Communications Outlook 2001

6. Canada 6 Low R&D Costs Relative Competitiveness of R&D Tax System • Canada offers the most favorable tax treatment for R&D among the G-7: • Canada’s combined federal and provincial tax credits reduce the after-tax cost of $100 of R&D expenditures to as low as $44. • In Canada, eligible costs include: capital equipment, overhead, process R&D, salaries, and materials. • These tax-based incentives permit firms to significantly reduce R&D costs through direct investment or sub-contracting in Canada. 0.70 Canada 0.88 U.S. 0.89 Australia 0.91 France 0.92 Korea 0.97 Mexico 1.00 U.-K. 1.01 Japan 1.02 Sweden 1.03 Italy 1.05 Germany The B-index represents a ratio of the after-tax cost of a $1 expenditure on R&D divided by 1 less the corporate tax rate. A lower B-index indicates a more competitive R&D tax system Source: Conference Board of Canada, November 1999.

7. 300 mi St. John's Edmonton Charlottetown 600 mi Québec Fredericton Regina Calgary Montréal Victoria Vancouver Halifax Ottawa Winnipeg Seattle Toronto Boston Windsor Milwaukee New York Chicago Detroit Philadelphia Cleveland Baltimore Pittsburgh St. Louis Washington San Francisco Denver Atlanta Los Angeles Houston Miami Mexico City Canada 7 …and Short Distances to Markets • Almost half of the U.S. population lives within a 10 hour drive of Toronto, and over 60 percent within a two hour flight. • Business travel between Canada and the U.S. has increased considerably since the inception of the “Open Skies*” Agreement (February, 1995) • Direct air service between major cities in Canada and the U.S. has nearly doubled in 6 years. • *Under “Open Skies” Canadian Air Carriers gained unlimited rights to establish routes from any point in Canada to any point in the United States. Similarly, U.S. carriers also gained unlimited access to the Canadian market (with a phase in period for up to three years)