Exclusive Interview How Canada Creates an Industry–Friendly Environment

Author / Editor: Swati Deshpande / Dominik Stephan

With a strong value chain from manufacturing via petrochemicals all the way to modern bio-based materials, the province of Ontario is Canada's economic an industrial powerhouse. But what is behind this amazing success story? This interview presents you the views of the Minister, Ministry of Economic Development, Employment and Infrastructure (MEDEI), Ontario, Canada, Brad Duguid

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Bio Amber’s new bio-succinic acid production plant
Bio Amber’s new bio-succinic acid production plant
(Picture: MEDEI)

Located in the heart of North America’s industrial sector, Ontario is part of the US $ 19 trillion market under the North American Free Trade Agreement. The core of Ontario’s chemical sector is located in close proximity to the Great Lakes—St Lawrence Seaway, a 2,300 km marine highway, as well as major rail lines that enable goods to be easily shipped around the world. With the help of its geographical location and encouraging policies, the province has developed clusters of industries. Such an industry-friendly approach by the government is noteworthy. Here is more about it.

PROCESS: How is the chemical/biochemical industry faring in Ontario?

Brad Duguid: Ontario’s chemical sector is the fifth largest by employment and the ninth largest by shipments in North America, and continues to grow because of our ideal location and talent.

Ontario is in immediate proximity to key US oil and gas fields, with multiple pipelines transporting natural gas, ethane and crude oil from all North American regions, including the Marcellus and Utica basins. Moreover, over 600 chemical and biochemical companies—including the world’s top 10 chemical companies such as BASF, Dow, Shell, DuPont—operate in the province.

Of particular note, Ontario is home to BioAmber’s new biosuccinic acid production plant—the world’s largest plant that sources sugar feedstock from corn. The province is also home to leading university research institutes and commercialization accelerators that support industrial biotechnology innovations.

PROCESS: What steps is the ministry taking in order to attract more investment in the state?

Duguid: Investing in Ontario offers companies more value for their money, with a combined federal-provincial manufacturing income tax that is 11 percentage points below the US average. Labor costs in the province are among the lowest in G7 countries, while generous R&D tax credits apply to a broader range of eligible costs than in many competing markets.

Additionally, we have a number of incentives for companies including the New Jobs and Prosperity Fund, which is providing $2.5 bn over 10 years to enhance productivity, bolster innovation and grow the state’s exports. The Eastern Ontario Development Fund and Southwestern Ontario Development Fund provide funding for economic development in the respective regions. Also, we frequently work with our federal colleagues to secure matching contributions for new investments.

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