Financial Services in. Ontario. New opportunities for global innovators. The world works here.

Transcription

1 Financial Services in Ontario New opportunities for global innovators The world works here.

2 More global leaders choosing Ontario for expansion Global financial leaders have recognized the competitive advantages they can gain internationally by opening or expanding their asset management, risk analytics or high-skill technical operations in Ontario, Canada. That s why, in 2010, Canada s finance and insurance sector which is largely centred in Ontario attracted $5.4 billion in foreign direct investment, an increase of 7% over the previous year. China Investment Corporation opened its first foreign office not in London, New York or Chicago, but in Toronto, Ontario. Apex Fund Services, Citco, KPMG, Merrill Lynch and many other leading firms have invested here. Why Ontario? We have the people, the technologies and the business environment that can help innovative companies succeed in global markets. Table of Contents Financial services for a changing world... 2 An exceptional workforce for innovative companies... 7 High performance ICT services A cost-efficient business environment Easy access to key markets and customers And after work? An exceptional quality of life Note: Every effort has been made to ensure the accuracy of the information in this publication at the time of writing; however, the programs referred to and the data cited are subject to change. All figures are in Canadian dollars unless otherwise noted.

3 Rapid consolidation, regulatory reform and unprecedented technology-driven change are re-shaping the global financial services industry. For innovative companies, this is creating tremendous growth opportunities. If you re planning to expand your financial services company, here s what you should know about Ontario. We offer: a broad, deep talent pool with proven expertise in financial services high performance ICT services and a cost efficient business environment easy access to key markets and customers. Check out our numbers. They add up to a big win for both you and your shareholders. Join us. FAST FACT The Economist Intelligence Unit (EIU) forecasts that, through to 2014, Canada will be one of the best countries in the world in which to do business. Why? Our macroeconomic outlook and tax environment, openness to foreign trade and capital, the financing available and the tremendous market opportunities. 1

4 Financial services for a changing world For financial services companies looking to expand, Ontario, Canada has the people, the technologies and the business environment that can help you grow rapidly not just in Canada, but around the world. A top-ranked centre for industry leaders Ontario is the home of the Canadian banking system which the World Economic Forum identified in 2010 for the third year in a row as the soundest in the world. The U.K.-based Global Financial Centres Index (GFCI) ranks Toronto among the world s top ten international financial centres. Canada s financial powerhouse Ontario s financial services industry is centered in the Greater Toronto Area (GTA) with smaller clusters in Waterloo, London and Ottawa, Ontario. The GTA is North America s third largest financial services hub after New York City and Chicago in terms of industry employment and GFCI ranking. Among the foreign banks operating in Canada, 89% have their Canadian headquarters in the Greater Toronto Area: American Express, Citco, Goldman Sachs, ICICI Bank, ING Direct, Northern Trust, UBS and many others. Banks, credit card and insurance companies have also established customer service centers, software development centers and back office operations such as collections, accounting and transaction processing in smaller communities across the province. The GTA is home to: 10 domestic banks and 39 foreign bank subsidiaries and branches the Toronto Stock Exchange, ranked 8th largest in the world based on domestic market equity capitalization, and the world leader in mining industry financing 58 institutional pension funds 190 insurance companies including two of the largest 10 global life insurers and three of the four largest P&C insurers in Canada 80% of Canada s investment management industry, representing $700 billion in assets 7 of the 10 largest global hedge fund administrators with sector total assets estimated at $32 billion a growing number of operational service providers including CIBC Mellon, State Street, RBC Dexia, Merrill Lynch Technology. 2

5 N YONGE ST BAY ST YORK ST BANKS UNIVERSITY AVE KING ST W WELLINGTON ST W FRONT ST W GARDINER EXPY INSURERS PENSION FUNDS LAW FIRMS ACCOUNTING FIRMS King and Bay Similar to New York s Wall Street or London s The City, the corner of King and Bay streets in downtown Toronto marks the geographic centre of Canada s financial industry. Within a twenty minute walk are the head offices of most of Canada s top banks, investment dealers, pension firms, insurers, accounting and legal firms and the Toronto Stock Exchange. 3

6 A world-leading regulatory system Canada has a sophisticated, highly advanced financial system that is supported by an internationally respected regulatory and supervisory framework. For the third year in a row, The World Economic Forum ranked Canadian banks as the soundest in the world in its Global Competitive Report Our regulatory system is updated every five years to meet changing times. In Canada, securities regulation is a provincial jurisdiction. In Ontario, the Ontario Securities Commission (OSC) has that mandate. Ontario companies file their applications for prospectus approvals or exemptions with the OSC and, under Canada s inter-provincial regulatory passport system, the decisions are usually accepted by the other provinces. Companies outside Ontario, however, must file applications in their home province as well as in Ontario, increasing their regulatory paperwork and likely extending the time to market. 4

7 Growth momentum draws billions in new investments Ontario s financial services sector has grown steadily over the past ten years ( ), with employment rising by 31% compared to the 0.3% increase in the U.S. Toronto s financial services employment grew to 221,000 in 2010, an increase of 59,000 jobs during the same decade. Professional business services, such as legal, accounting and management consulting, have also expanded in Ontario with employment growing by 37% between , creating 112,000 net new jobs. Global leaders have recognized the competitive advantages of doing business here. In 2010, Canada s finance and insurance sector attracted $5.4 billion in foreign direct investment, an increase of 7% over the previous year. Top 10 global financial centres in London 2 New York 3 Hong Kong 4 Singapore 5 Shanghai 6 Tokyo 7 Chicago 8 Zurich 9 Geneva 10 Toronto Source: Z/Yen Group, March

8 FAST FACT In 2010, Canada s finance and insurance sector attracted $5.4 billion in foreign direct investment, an increase of 7% over the previous year. Toronto is a hub with an incredible number of innovative companies active in the knowledgebased industry sector including leaders in technology, media, telecommunications, clean tech and life sciences. This makes the city a competitive player in the global knowledge economy. From a big-picture point of view, Toronto is developing a suite of cohesive and strategic policies that will cement the conditions for success in the knowledge-based sector. Toronto is therefore a natural home of OMERS Strategic Investments, as it carries out its mission of incubating new investment platforms that will further OMERS reputation as a pension-based investment enterprise unlike any other in the world. John Ruffolo Senior Vice-President and Head of Knowledge Investing, OMERS Strategic Investments 6

9 An exceptional workforce for innovative companies Ontario has a deep talent pool of highly trained professionals that companies need to develop and execute winning strategies. Ontario s finance and insurance sector employs 358,000 people, nearly half of them in banking. It includes 7,000 charter-holding financial analysts (CFAs), more than 9,000 certified financial planners (CFPs) and more than 30,000 chartered accountants (CAs) 20,000 of them in Toronto and the surrounding area. A constant stream of new finance graduates We have 44 universities and colleges with thousands of students enrolled in degree, diploma and certificate programs in finance, accounting, business and information technology. Our MBA programs have won international acclaim for the high quality of their graduates. Queen s University School of Business, the Richard Ivey School of Business at the University of Western Ontario, the University of Toronto s Rotman School of Management and York University s Schulich School of Business are all ranked among the best in the world by publications such as The Wall Street Journal, Forbes and BusinessWeek. The University of Toronto s Rotman School of Management, which launched a new Master of Finance program in 2007, offers an MBA program that the Financial Times has ranked as one of the top ten worldwide in the Best in Finance category for five of the past seven years. 7

10 New global risk institute launched To build on Canada s growing reputation in financial risk management, a new Global Risk Institute in Financial Services (GRi) has been established in Toronto as a collaboration of regulators, risk experts, academics, policy makers and practitioners. The institute s focus is on applied research and leading-edge thinking across multiple risk management disciplines. An international centre for specialized industry education Industry professionals have come to Ontario from around the world for decades to learn the latest techniques in professional financial services management. For more than 40 years, CSI Global Education (formerly the Canadian Securities Institute) has been Canada s leading provider of professional credentials. Today, CSI also helps provide training in Asia, Europe, the Middle East, Central America and the Caribbean. In terms of financial supervision, more than 2600 financial regulators from over 100 countries have taken professional development courses through the Toronto Centre. Leveraging educational excellence To leverage the quality and diversity of financial services education in Ontario, the Toronto Financial Services Alliance and the Ontario government established a Centre of Excellence in Financial Services Education. Among other roles, the Centre has an online talent engine that enables students to find the programs they need to develop their skills, and allows growing companies find the talent they need. 8

11 FAST FACT The World Economic Forum ranked Canada first among the G7 and third among 133 countries for the quality of its management schools. With more than 40 active research faculty members and another 40+ corporate members, the University of Waterloo s Research institute in Insurance, Securities and Quantitative finance (WatRISQ) is not only a world-class centre in financial risk management, it is also perhaps the largest institute of its kind in the world. The financial crises of demonstrated that as global financial systems become ever-more complex, it becomes increasingly important to be able to identify, analyze and manage the associated risks. We contribute to the growth of that knowledge by offering state-of-the-art programs at Waterloo and workshops around the world, as well as working with industry and government partners to develop more effective solutions in risk management and finance. Employment in Ontario s financial services sector has grown by 31% over the past ten years, compared to a 0.3% increase in the U.S FINANCIAL SERVICES SECTOR EMPLOYMENT INDEX = 100 ONTARIO US Thomas F. Coleman Ophelia Lazaridis University Research Chair Director, WatRISQ University of Waterloo 9

12 High performance ICT services Financial services companies have discovered in Ontario the information and communications technology (ICT) talent and technologies they need to cost-effectively deliver high-value services. Top quality ICT at very competitive prices The size and scope of Ontario s ICT industry ensures that high quality IT services are available at competitive costs. With 16,000+ firms and revenues of $75 billion+ annually, the industry includes home-grown high performers Research In Motion, Open Text, Certicom, Celestica and global giants such as Accenture, Alcatel-Lucent, Ericsson, HP, Microsoft, Oracle and Siemens. The Greater Toronto Area is North America s third largest centre for ICT, surpassing Chicago, Boston and Los Angeles. We also have significant ICT clusters in the Kitchener-Waterloo and Ottawa regions. Algorithmics, the world s leader in enterprise risk management software, was founded in Toronto in Today its worldwide client list includes 70 of the world s top 100 banks. 10

13 A cost-efficient business environment Business costs in Ontario are lower than in any G7 jurisdiction, according to KPMG s Competitive Alternatives Employer healthcare costs for a typical firm here are about one-third the U.S. average. Ontario also offers a wide range of programs such as the Apprenticeship Training Tax Credit Program that can help cut labour costs. Competitive Business Costs Overall Business Costs Index (U.S.=100) Ontario 95.6 U.K France 98.3 U.S.A Italy Germany In the highly complex and dynamic world of global banking, it is critical to have the very best people. Our growing technology center in Toronto benefits from the breadth and depth of the banking and IT talent pool, the world-class education and research centers, the cost of doing business, the inclusive environment, and the high quality of life for our employees. We continue to be impressed by the calibre of our technologists in Toronto who everyday deliver superior services to our global business partners. Colin Lindsell-Ocio CTO Bank of America Merrill Lynch in Canada Japan Source: KPMG and MEDT

14 Since Manulife was established in 1887, we have grown into one of the world s leading insurance and financial services companies. We serve clients both within Canada and in more than 20 other countries and territories. We began doing business in the United States in 1903 and in Asia in and today, we have one of the most extensive Asian operations of anyone in the financial services space. With our global head office in Toronto, we have found in Ontario the talent, technologies and forward-thinking business environment that have helped us build a company that thrives on change, new opportunities and meeting the needs of customers worldwide. Michael R. Landry Vice President, Corporate Development Manulife Financial 12

15 Business tax cuts to fuel long-term growth Ontario has launched a comprehensive tax reform program to fuel business growth. Ontario s marginal effective tax rate (provincial and federal combined) on new capital investment plummeted to 18.6% in 2010 from 32.8% in 2009 and will continue to drop to 16.2% by Toronto firms already pay significantly lower corporate taxes than their competitors in any major U.S. city, according to KPMG s Competitive Alternatives 2010 Special Report: Focus on Tax which studied the total tax impact (corporate income taxes, capital taxes, sales taxes, property taxes, miscellaneous local business taxes and statutory labour costs) as it affects different industries in different cities. For companies in the corporate and IT service sectors, the total tax impact in Toronto was approximately two-thirds the U.S. average and much lower than the tax burden in Chicago or New York. Toronto taxes lower than other major financial centres Total tax index for corporate and IT services Toronto, CA 68.4 London, U.K Amsterdam, NL 91.9 Chicago, U.S U.S. average Boston, U.S New York, U.S Los Angeles, U.S When Northern Trust established a centre of excellence for portfolio analysis, our Toronto office offered the right mix of investment talent and connectivity for this global capability. Ontario s financial community benefits from a well-educated and highly skilled workforce, a perfect fit for Northern Trust s client base of sophisticated individual and institutional investors. As a global financial institution, Northern Trust has offered asset management and asset servicing from our Toronto office for 20 years. We understand the advantages offered by Ontario and our new portfolio analysis desk demonstrates our commitment to doing business here. Robert J. Baillie President and Chief Executive Officer Northern Trust Canada Source: KPMG 13

16 Easy access to key markets and customers We re part of the $17 trillion NAFTA marketplace. There are 153 million affluent consumers within a day s drive of Ontario. We re a 90-minute flight from major U.S. centres such as New York, Chicago and Boston. Our central location in North America means we work in the same time zone as many U.S. clients. We have similar business practices and terminologies as our U.S. neighbours. We have similar laws concerning intellectual property, data security and privacy similarities that reduce miscommunication and increase levels of understanding, trust and security. We also have solid business and cultural ties with the U.K., Europe and Asia. Ontario has five international airports Toronto, Ottawa, Hamilton, London and Thunder Bay. The largest Toronto s Pearson International Airport offers non-stop and same-plane service via 75 carriers to 180 destinations worldwide. Toronto s City Centre Airport, which is a 10-minute drive from the downtown financial core, offers multiple daily flights to New York, Chicago, Montreal, Ottawa and other regional destinations. FAST FACT More than 150 languages are spoken in Ontario. That can create a significant business advantage for companies that need to communicate clearly with suppliers, customers and business networks around the world. 14

17 FAST FACT Toronto is ranked among the top five cities globally in the Economist Intelligence Unit s 2011 Liveability Index. And after work? An exceptional quality of life Ontario offers high-quality universal healthcare, one of the best public education systems in the world and safe communities that consistently score well in international comparisons of cost-of-living and quality-of-life. We also have excellent golf courses, world-class art galleries, jazz clubs, live theatre, award-winning wineries and major cultural events such as the International Festival of Authors and the Toronto International Film Festival. Because of all this, Ontario has become a global magnet for innovative companies and talented, creative professionals. We are a diverse, multicultural society in which more than 150 languages are spoken. No matter where you come from, you can feel at home in Ontario. 15

18 FAST FACT Among the world s top 26 centres for finance, commerce and culture, Toronto ranked second overall just behind New York in PricewaterhouseCooper s fourth annual Cities of Opportunity 2011 report. The judges cited particular strengths in intellectual capital and innovation, as well as health, safety and security. Canada is an excellent place to do business. In less than a decade, ICICI Bank Canada has grown from zero to an operation with $5.3 billion in assets and it is active in all provinces and territories with a diverse customer base. This can be largely attributed to Canada s knowledgeable consumers, an open market that welcomes international players, and a secure regulatory system. Our bank has also benefited from a tremendous pool of talented and highly educated workers in Ontario, the financial services centre in Canada. We have been able to engage many quality staff locally and they have been integral in our bank s tremendous growth. We are extremely pleased to have chosen Ontario as the home of ICICI Bank Canada. Sriram H. Iyer President and CEO ICICI Bank Canada 16

19 We can help Call us for more detailed information on industry clusters, the availability of skilled workers and up-to-date economic data. We can also assist with: coordination of site selection and community visits contacts with federal, provincial and municipal officials, utility companies, transportation organizations and business facilitators business immigration regulations and requirements. For more information, please visit us at:

20 For more information about investing in Ontario, please visit us at: The world works here. For a list of our international phone numbers to contact us: info@investinontario.com Ontario Investment and Trade Centre 35th Floor, Eaton Centre P.O. Box 1, 250 Yonge Street Toronto, Ontario M5B 2L7 Canada T (416) F (416) Printed in Ontario on recycled paper Queen s Printer for Ontario, ENG/08/11