The Hon. Gary Doer: Manitoba - The Ideal Business Location Now And Into The Future

Wednesday, March 1, 2006 - 00:00

The Editor interviews The Hon. Gary Doer, Premier, Province of
Manitoba.

Editor: Would you share with our readers how you came to choose your
present career?

Doer: It's a combination of commitment to public service, loving the
competition of politics and the personal satisfaction that comes from producing
results that maximize the potential of Manitoba.

Editor: What are the two or three things that are most important when
considering Manitoba as a business location?

Doer: Manitoba is competing with other areas throughout the world to
attract business. However, we have strengths that clearly set us apart from our
competitors.

Our first strength is that we have the lowest hydroelectric rates in North
America. They will continue to be the lowest in North America for the next ten
years because we have a huge supply of water that drains through our province.
And, we have built hydroelectric dams to capture that energy. This enables us to
export huge amounts of electricity and then to use the profits from those export
sales to keep rates within Manitoba the lowest in the world. Given the fact that
energy costs are bound to rise as the worldwide demand for energy soars,
companies looking for a low cost and reliable source will inevitably seek us
out.

Secondly, we have targeted our educational system to train people in the
special skills required by industries that decide to locate in Manitoba, as can
be seen in our efforts targeted at the needs of the pharmaceutical, aerospace
and bus manufacturing sectors.

Thirdly, we are at the geographical center of North America and just north of
the border. We have a transportation route that is served by four railways, five
major trucking companies and a 24-hour a day airport. That route has a direct
line from Winnipeg through Kansas, Oklahoma into Texas, where we reach cities
like Dallas, which is directly south of us, Austin, San Antonio, and Laredo. We
are an integral part of the Mid-West Trading Corridor and working with our
partners do everything possible to make this Corridor reliable and secure.

Editor: I would like to ask you first about the strengths you mentioned
and then ask you to touch on other strengths. First tell us more about
hydropower.

Doer: The low cost of wind and hydro generated power stands in stark
contrast to the 100 percent increase in natural gas prices. The cost of
industrial electric power in New York is 11.98 cents to 12.93 cents per
kilowatt-hour. In Manitoba, the industrial user pays between 2.05 cents per
kilowatt-hour to 3.02 cents a kilowatt-hour. So you can see by definition the
huge advantage that we have for companies that are concerned about today's
prices and are looking for ways of keeping tomorrow's costs in check.

We are very proud that last month Business Week's online publication
recognized Manitoba as having the most effective regional climate change control
strategy in the world as a result of its effective use of renewable energy.

Editor: Please fill us in on why your education system attracts business
to Manitoba.

Doer: Of all the provinces, Manitoba has had the largest percentage
increase in college enrollment. We are also increasing the number of skilled
workers by giving workers training in the skills needed in particular
industries. Jet Blue maintains its planes in Winnipeg. Training courses are
provided at a campus adjacent to their maintenance facility. Boeing is expanding
its facilities in Winnipeg and we are working with them to be sure that through
immigration they have the people they will need and that those people have the
necessary skills so that they can hit the ground running. We offer specialized
training for workers in pharmaceutical and biotech companies.

We also offer college training programs dedicated to educating graduates in
the particular skills needed in industry and commerce. The quality of financial
and banking training in our colleges makes Manitoba attractive to banks and
financial service businesses. Great West chose Winnipeg, not Toronto, for its
main office, as did Investors Syndicate. Both organizations have branches
throughout Canada as well as offices in the U.S.

We feel that our training strategy is of critical importance in attracting
business to Manitoba because it addresses existing needs as well as anticipates
future needs so that we can respond to future opportunities.

Editor: Would you like to enlarge on your comments with respect to
Manitoba's role as a transportation hub?

Doer: In the post 9/11 environment, while implementing
through the use of technology necessary precautions to address security
concerns, we have at the same time continued our efforts to facilitate the
movement of goods and services along our Mid-Western Corridor.

Editor: Let's turn to other advantages. Take healthcare for example.

Doer: We believe that our healthcare system provides an economic
advantage to business in terms of attracting and retaining employees and a
social advantage in that it is of critical importance to our citizens. Our
healthcare plan is quite straightforward. It does a good job on critical matters
such as addressing life and death issues and affordability. We are now working
on quality of life issues. We need to improve our wait list times. We have to
increase the number of trained, skilled and professional providers to do two
things, namely to improve access to medical care and also to lower costs. We
continue to work on ways to reduce the cost of drugs. We have already taken
giant steps toward addressing most of these issues

Because in Canada healthcare costs are borne by the government, Canada has a
significant advantage over the U.S. as a business location. For example, the
buses on Fifth Avenue in New York are produced in Winnipeg. Among the reasons
they are produced there is that the burden of supplying healthcare does not fall
on the manufacturer and, of course, the lower cost of energy.

Editor: What is the tax picture?

Doer: The total tax burden on companies doing business in Canada is
becoming more competitive with the U.S. Manitoba has reduced its taxes. The
small business rate was 9 percent when we came into office. It is now 4.5
percent. We do everything possible to encourage R&D. After considering
federal and provincial tax credits, the after-tax cost of one dollar of R&D
expenditures is between 42 and 45 cents, depending on the size of the company.

Editor: There is great concern on the part of U.S. companies about the
high cost of litigation here in the U.S. How does Canada stack up?

Doer: When I was in New York recently, I met with a number of venture
capitalists who made the point over and over again about the soaring cost of
litigation in the U.S. Canada is not as litigious as the U.S. in terms of the
number of cases brought against companies and the cost exposure involved. We
have a degree of accountability in our legal system that discourages the
bringing of unmeritorious cases. This results in us having only approximately
one-fifth of the number of cases that are brought against corporations in
comparable jurisdictions in the U.S. The fact that we are not as litigious also
accounts for the lower cost of medical care in Canada. Our medical malpractice
insurance coverage costs one fifth of what it does in the U.S.

Editor: Have businesses recognized the advantages you mentioned by, in
fact, coming to Manitoba?

Doer: In terms of relative numbers, we have in the last five years had
the largest inflow of private sector investment ever. Private sector employment
growth has increased. In our biotech science area, we have had a 40 percent
growth in the last five years. According to PricewaterhouseCoopers, we had the
highest growth in any biotech area in Canada. The financial services area is
expanding. Our aerospace industry held its own after 9/11 and is now growing
again. When Simplot was looking for a location for the largest potato-processing
factory in North America, they choose Manitoba because of its very productive
workforce. This plant processes potatoes into French fries for the European
market.

Editor: Where do you see Manitoba being at the end of the next five
years?

Doer: We see further increases in our capacity to generate and
transmit electrical energy. We see increases in our ability to send it east to
Ontario and south to the U.S. We see export gains continuing to offset the cost
of electricity to users in Manitoba so that we can continue to offer the lowest
domestic rate in North America. We also anticipate further climate change
reflected in the melting of ice in Churchill in northern Hudson Bay. It could
become a future transportation route to Europe as it is now to Murmansk in
Russia. We are beginning to plan now for the eventuality of opening an overseas
trade route to China. We also contemplate much more polar air transportation.
Winnipeg is two hours closer to India than Los Angeles or New York across the
polar cap. Polar transportation offers great opportunities for companies which
will in turn further enhance the attractiveness of Manitoba as a business
location.

Editor: What would you like your legacy to be?

Doer: Hopefully more people will accept the proposition that education
and training is an investment and not a cost for our economy. They will
recognize that renewable energy is not only good for the environment but good
for business and people. They will also understand that it is not a question of
fossil fuels versus renewable energy, but rather that it is necessary to have a
basket of sources of energy. The advantage of this is twofold. One is that it
minimizes the effect on the environment of fossil fuels. The other is that, by
providing alternative sources of supply, it will allow time for innovation to
take place, which, I am confident, will result in more alternatives to fossil
fuels being found. The great unknown is how long this search for alternatives
will require.