Canada:The Best Countries For Business

By Kurt Badenhausen
Forbes StaffSource: Forbes.comDuring the run-up to every U.S. presidential election, countless Americans threaten to move to Canada if their preferred candidate does not emerge victorious. Of course, few follow through with a move north. Maybe it is time to reconsider.

Canada ranks No. 1 in our annual look at the Best Countries for Business. While the U.S. is paralyzed by fears of a double-dip recession and Europe struggles with sovereign debt issues, Canada’s economy has held up better than most. The $1.6 trillion economy is the ninth biggest in the world and grew 3.1% last year. It is expected to expand 2.4% in 2011, according to the Royal Bank of Canada.

Video: Top 10 Countries For Business

Canada skirted the banking meltdown that plagued the U.S. and Europe. Banks like Royal Bank of Canada, Bank of Nova Scotia and Bank of Montreal avoided bailouts and were profitable during the financial crises that started in 2007. Canadian banks emerged from the tumult among the strongest in the world thanks to their conservative lending practices.

Canada is the only country that ranks in the top 20 in 10 metrics that we considered to determine the Best Countries for Business (we factored in 11 overall). It ranks in the top five for both investor protection as well as lack of red tape, which measures how easy it is to start a business.

Full List: The Best Countries For Business

Canada moves up from No. 4 in last year’s ranking thanks to its improved tax standing. It ranks ninth overall for tax burden compared to No. 23 in 2010. Credit a reformed tax structure with a Harmonized Sales Tax introduced in Ontario and British Columbia in 2010. The goal is to make Canadian businesses more competitive. Canada’s tax status also improved thanks to reduced corporate and employee tax rates.

Canada leans on the U.S. economy heavily: it’s the biggest oil supplier to Uncle Sam and three-quarters of its exports end up in the U.S. each year. Yet while U.S. unemployment has stayed above 9%, it’s only 7.3% in Canada compared to the 25-year average of 8.5%. The eurozone unemployment rate is 10%.

We determined the Best Countries for Business by looking at 11 different factors for 134 countries. We considered property rights, innovation, taxes, technology, corruption, freedom (personal, trade and monetary), red tape, investor protection and stock market performance.

Forbes leaned on research and published reports from the Central Intelligence Agency, Freedom House, Heritage Foundation, Property Rights Alliance, Transparency International, the World Bank and World Economic Forum to compile the rankings.

Denmark dropped from the top spot in 2010 to No. 5 this year as its relative monetary freedom declined as measured by the Heritage Foundation. Denmark’s stock market also fell 14%, which was the worst performance of any of our top 10 countries. Four other European countries in last year’s top 20 also dropped in the rankings, with Finland sliding to No. 13, the Netherlands to No. 15 Netherlands, Germany to No. 21 and Iceland to No. 23.

The U.S. ranked No. 10, down from No. 9 in 2010. The world’s largest economy at $14.7 trillion continues to be one of the most innovative, ranking sixth in patents per capita among all countries (No.7 overall Sweden ranks tops for innovation).

What hurts the U.S. is its heavy tax burden. This year it surpassed Japan to have the highest corporate tax rate among developed countries. The U.S. also gets dinged for a poor showing on monetary freedom as measured by the Heritage Foundation. Heritage gauges price stability and price controls and the U.S. ranks No. 50 out of 134 countries.

Bringing up the rear are three countries where the economies are smaller than $10 billion. No. 132 Burundi, No. 133 Zimbabwe and No. 134 Chad all fare poorly when it comes to trade and monetary freedom as well as innovation and technology. Chad has the highest GDP per capita of the three at $1,600, but scores last among all countries on both corruption and red tape.

New refugee law unfair, experts say

The federal government is giving refugee claimants a maximum of 15 days to prepare an appeal to the Immigration and Refugee Board, a change the Conservatives made after legislation to reform the system was passed and one that is drawing criticism.

The Balanced Refugee Reform Act, which included the promise of a new appeals division and was passed in June 2010, had two main goals: make the refugee system faster and fairer.

Some refugee advocates aren't happy with how the government is proceeding with implementing the legislation and say the 15-day timeframe for appeals is too short, CBC's Louise Elliott reports.

Legal experts are warning that the government has been playing with the fine print in the legislation – pushing it away from the goal of fairness in the process – and they also warn that a delay in the bill's implementation could mean the government is planning to change other aspects of the law as it's adopted.

The decision to give refugee claimants only 15 days to submit a complete appeal to the Immigration and Refugee Board was made after the bill passed.

"That's definitely not enough time for counsel to properly prepare the case. So if you give an appeal on one hand but on the other you're making it close to impossible to be effective, you're really not achieving anything," said Mitchell Goldberg, vice-president of the Canadian Association of Refugee Lawyers.

Refugee claimants now have 45 days to submit and perfect an appeal to the federal court, a timeline most lawyers believe is already too tight.

Other experts believe the short time frame is part of a deliberate strategy by the government to keep refugee claimants from being successful. "So again, without the government actually just saying we have as our objective the rejection of refugee claimants, they just set impossible timelines. So people who don't make the timelines are out of luck and they will lose," said Audrey Macklin, a former refugee board member who now teaches law at the University of Toronto.

"What one sees in this is the manipulation of seemingly neutral or benign bureaucratic techniques like tight timelines to accomplish a political objective of rejecting refugee claimants," she said.

The government maintains its reforms are designed to speed up the system and weed out so-called false claimants who could pose a threat to security.

Macklin points to the government's Human Smuggling bill as more evidence that it doesn't want even legitimate refugees to enter the Canadian system. That bill allows men, women and children to be detained for one year without a hearing after their arrival in Canada.

A recent decision by Immigration Minister Jason Kenney to push back the Refugee Reform Act's implementation date to next June has at least one expert worried more changes are in the works.

Tight timeframe is 'ludicrous'

"No one knows the reason for the delay to June 29. However, the concern and the speculation and some of the rumours are that there have been comments from senior [Citizenship and Immigration Canada] officials that the minister felt too many concessions were made when the act was first passed," said Peter Showler, former chair of the IRB who teaches law at the University of Ottawa.

He also isn't satisfied with the shorter timeframe. "Limiting to fifteen days to not just file the appeal but also perfect or complete the appeal within 15 days is ludicrous," he said.

In one public comment, Kenney has not denied more changes could be underway and in an interview, his spokeswoman Ana Curic left the door open. "We're looking to implement this bill, but if we think that there are further actions that can be taken to improve the system, we will never close the door to further improvements to any system," she said.

Showler said it could be a challenge for the government to make more changes to the refugee system, especially if they require amendments to the law. "Even with a majority it takes time to introduce the bill, get it through committee, get it through the Senate. We've been anticipating something, but nothing's come forward, so at this point, we're waiting, fearing, and the longer it goes the less likely there will be changes," he said.

Source: CBC news