The 2015 Global Opportunities Index (GOI) ranks Canada the top investment destination in the western hemisphere and sixth globally, less than two tenths of a point behind third place. The U.K. landed in seventh place, Australia 15th, Japan 17th, the U.S. 18th and Mexico 69th.

The Global Opportunity Index ranked 136 countries, assessing their need to improve their business environment in order to better "commit capital to strategic projects rather than moving it around as a fleeting portfolio tactic," explain authors of the report. GOI also informs multinational companies, investors and development agencies considering large-scale, cross-border commitments of capital. The index considers 61 variables related to national economies and supporting infrastructure across four categories: economic fundamentals, ease of doing business, regulatory quality and rule of law.

Each category is aggregated on a 10-point scale, with Canada one of only four countries to score at least eight points across three of four categories (no country scored more than eight points in economic fundamentals). Within North America, Canada ranked ahead of both the United States and Mexico in nearly every category:

  Economic Fundamentals Ease of doing Business Quality of Regulations Rule of Law
Canada (7.73) 6.14 8.00 8.00 8.80
U.S. (7.14) 6.45 7.42 6.30 8.40
Mexico (5.34) 5.27 5.89 5.50 4.70

Ease of doing business

The ease of doing business category evaluates, among other factors, business costs and tax burden, two areas for which Canada is known for its competitiveness. According to KPMG, Canada ranks first for general tax competitiveness for businesses, and the same report found Toronto to be the most tax competitive city, beating out Manchester, Monterrey and Mexico City.

Quality of regulations

The quality of regulations category assesses the effectiveness of policymaking, including how a country's laws may encourage or limit the free flow of trade and investment. Canada's score in this category made up for much of the difference between the overall global scores of Canada (sixth) and the U.S. (18th), as Canada records a 1.7-point advantage according to GOI. "Through tax and tariff export-related programs, Canada provides benefits to businesses comparable to those found in foreign trade zones (FTZ) in other countries while having the advantages of not being site-specific," explains Area Development magazine. "As of 2015, Canada is the first G220 country to offer a tariff-free zone for industrial manufacturers."

Rule of Law

Canada recorded one of the highest scores among all countries in the rule of law category, placing nearly half a point ahead of the U.S. and four points ahead of Mexico. The rule of law reflects the extent to which a country's legal system offers protection to investors, and property rights to support and enhance business investment. Assessments of legal infrastructure, protection of property rights and protection of investor rights produced the score for this category.

Authors of GOI claim, "The index can explain more than 57% of the variation in FDI per capita across advanced, emerging and frontier nations." This means that a one-point increase in the index is associated with a 43% increase in FDI per capita.

Learn which North American jurisdiction ranked first in foreign direct capital investment attraction for the past two years

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October 20, 2015

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