Ontario's Chemical Industry
Innovation Catalysts
Ontario's sophisticated chemical industry
Of the 10 largest chemical companies in the world, eight have operations in Ontario. In 2004, our chemical industry had:
- 52,000 employees
- $18.2 billion in revenues
- $10.2 billion in exports.
We're also the third-largest plastics producer in North America and the home of almost 50% of all Canadian plastics firms. In 2004, our plastics industry had:
- 88,000 employees
- $17.9 billion in shipments
- $5.9 billion in exports.
Ontario's chemical manufacturing sector
| Sector | Percentage |
|---|
| Basic chemicals and resins | 45% |
| Pharmaceuticals | 19% |
| Soaps | 7.5% |
| Paints | 5.5% |
| Toiletries | 4% |
| Agri-chemicals | 2% |
| Adhesives | 2% |
| Inks | 1% |
| Other | 14% |
Source: Statistics Canada, 2002
Incentives for research and development
Canada's R&D tax incentive program ranks among the most generous of the G7 countries. When additional provincial credits are factored in, the after-tax cost of a $100 R&D expenditure in Ontario can be $40.24 or less.
More R&D is performed in Ontario than anywhere else in Canada. Eight of our universities have state-of-the-art capabilities in materials science and manufacturing technologies.
Recognizing that innovation drives economic growth, the Ontario government has invested more than $1.8 billion in public research during the past 10 years and has committed a further $1.4 billion to accelerate research commercialization in the province.
Skilled, knowledgeable workforce, from the plant floor to the executive suite
The availability and quality of Ontario's large pool of knowledge workers provides a major competitive advantage for our chemical companies.
- Almost three out of 10 employees in our chemical industry have a university degree.
- Our chemical workers are loyal. The average length of employment for chemical workers is 11 years in the Greater Toronto Area, more than 19 years in Sarnia and more than 20 years in eastern Ontario.
- Ontario's 20 universities produce more than 29,000 graduates a year in math, engineering and sciences, providing a constant supply of new talent for chemical companies. Our 24 colleges of applied arts and technology also offer manufacturing-related training developed with industry associations.
Strategic location offers easy market access
Within a day's drive of southern Ontario you will find:
- 65% of the entire Canadian Gross Domestic Product
- 60% of the North American plastics resin market
- major manufacturing sectors—automotive, pharmaceuticals, agri-food and packaging—and large consumer markets.
The Economist Intelligence Unit ranks Canada's transportation infrastructure ahead of all G7 countries.
Our highway network links Ontario companies to U.S. customers and suppliers through 10 commercial border crossings. Our rail lines connect with the U.S. at five commercial crossings and the Great Lakes–St. Lawrence Seaway system offers marine access to U.S. and world markets.
An extensive pipeline grid brings natural gas, petrochemical liquids, chemical intermediates and crude oil to Ontario for processing and upgrading from western Canada, the U.S., the Maritimes and offshore sources.
Business environment for high-value production
During the past decade, the average annual profits of industrial chemical companies in Canada have been double those of companies in the U.S.
Productivity in Canadian chemical manufacturing exceeds that of its U.S. competitors and is growing at more than 5% a year, almost four times the rate of its U.S. counterparts.
As an export-oriented manufacturing economy, Ontario has an internationally competitive business environment.
Our combined (provincial and federal) general corporate income tax rate is 4 percentage points below the U.S. average.
Manufacturers in Ontario pay about half as much as their U.S. counterparts for employee health care costs.
Our regulatory environment is streamlined. Site permits are processed more quickly than in the U.S.
Specialty chemicals: Canada-U.S. cost comparison
| Costs and profit, Canadian companies in comparison with U.S. average |
|---|
| Labour costs | -23% |
| Effective tax rate | -18% |
| After-tax profit | +202% |
Source: KPMG, Competitive Alternatives 2004
Business in Ontario pays dividends
- Government committed to innovation and growth
- Skilled, well-educated workforce
- Competitive business costs
- Exceptional R&D tax incentives
- Superior infrastructure
Let us help you
Call:
1-800-819-8701
(North America)
00-800-46-68-27-46
(U.K. and Europe)
Email:
info@2ontario.com
Or visit us at:
www.2ontario.com
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