2. Table of Contents Telecommunications Infrastructure Low Costs Quality of Telecomm Network Lowest Internet Access Charges High Computer Penetration Rate Transportation Infrastructure Best Transportation Infrastructure Low Transportation Costs Canada’s Infrastructure Fares Well R&D Infrastructure Quality Research Infrastructure Federal Laboratories World Class Research Industrial Research CA*NET2: Canada’s High Speed Research Network Relatively High Output of Scientific Papers

3. Telecommunications Infrastructure

4. On Prices: ­Canada's phone charges are among the lowest in the world: ­Lowest phone rates in the G-7; ­Lowest internet access charges in the G-7; and ­Among the lowest long distance charges in the world. Annual Residential Telephone Charges $US, January 1996 NITT Bell Canada 1141 914 802 799 658 587 449 Japan Germany France Italy NYNEX U.S. BT U.K. Canada * Source: OECD Information Outlook 1997 Low Communication Costs

5. Quality of Telecommunications Network Telecommunications Infrastructure Note: 0=does not meet business requirements; 1.0=meets business requirements very well Source: WEF, The Global Competitiveness Report 1997 Germany 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Canada U.S.A. U.K. Japan France Italy Mexico Telecommunications Infrastructure Rank among G-7 Countries, 1997 Canada ranks highest among G-7 countries in terms of telecommunications infrastructure.

6. * charges include both those levied by the Internet Service Provider (IAP) and by the PTO for the use of the Public Switched Telephone Network (PSTN). Canada has the lowest Internet Access Charges in the G-7, 1996* US$ Connection Costs for 20 Hours Per Month Lowest Internet Access Charges OECD Communications Outlook 1997, Volume 1

7. On Access: ­Canada tops G-7 in home computer, cable, and telephone penetration. 28.8 25.5 25.0 20.0 15.6 14.3 14.0 Canada U.S. Germany U.K. Japan France Italy Home Computer Penetration Rates % of Households With PCs 1995 A High Computer Penetration Rate * Source: OECD Information Outlook 1997

8. Transportation Infrastructure

9. Best Transportation Infrastructure With 30 million people, Canada has: 850,000 km road system 91,000 km of railway track 100,000 km of pipelines Atlantic, Pacific and Arctic ports 9 International airports 130 Canada-US border crossings 1 18 3 20 30 6 31 Canada U.S. France UK Japan Italy Germany Transportation Infrastructure - World Rank Source: Global Competitiveness Report, 1996

10. Low Transportation Costs Transportation rates in Canada are, on average, 13% lower than those in the U.S.* Source: KPMG Management Consulting, 1999 Annual Transportation and Distribution Costs — 1998 +200 G-7 Comparison Index: U.S. = 100 Canada U.K. U.S. Germany Italy France Japan 75100125 * Source: KPMG Management Consulting, 1999 Ontario Quebec North Carolina Minnesota Alberta Texas New Brunswick New Jersey P.E.I. Pennsylvania Colorado British Columbia Saskatchewan Nova Scotia California Manitoba Vermont Massachusetts Washington Newfoundland 5075100125150 Province - State Comparison Index: U.S. = 100

11. Canada’s overall infrastructure has been reviewed by business persons based on the efficiency, development and how well the transportation systems meet business requirements. Canada’s Infrastructure Fares Well 0 1 2 3 4 5 6 7 PortsRailroadsAirRoads CanadaUS Business Views on the Quality of... Source: 1999, WEF

12. R&D Infrastructure

13. Quality Research & Development Infrastructure Canada’s world class research infrastructure is supported by: over 120 federal laboratories in a large number of areas approximately 600 university labs in over 50 research universities over 6,000 firms performing research and development Large scale collaborative university research is underway within 14 Networks of Centres of Excellence (NCEs) across Canada Tying many of these research networks and institutions together is a high speed research network (CANARIE)

14. Federal laboratories undertake a wide array of research Key research capacities exist in areas such as: environmental technologies space telecommunications agriculture biotechnology health & medicine natural resources A greater effort is underway to commercialize resulting research through mechanisms such as: the Industrial Research Applications Program a national network of university industry liaison offices

15. Canada’s Network of Centres of Excellence World class research is underway within 14 university research networks: Canadian Arthritis Network Canadian Bacterial Diseases Network (CBDN) Canadian Genetic Diseases Network (CGDN) Canadian Institute for Telecommunications Research (CITR) Geomatics for Informed Decision (GEOID Network) Health Evidence Application and Linkage Network (HEALNet) Institute for Robotics and Intelligent Systems (IRIS). Intelligent Sensing for Innovative Structures Mathematics of Information Technology and Complex Systems (MITACS) Mechanical Wood-Pulps Network Micronet / Microelectronic Devices, Circuits and Systems Protein Engineering Network of Centres of Excellence (PENCE) Sustainable Forest Management TeleLearning Network of Centres of Excellence

16. Industrial Research Significant research and development is performed by Canada’s largest high tech firms such as: Pratt & Whitney IBM Ericsson Corel Alcan Noranda Glaxo Wellcome Pastor Merieux Northern Telecom Merck Frost Newbridge Magna Bombardier CAE Imperial Oil Apotex * Based on large manufacturing firms. Source: Conference Board of Canada, 1997 and Industry Canada calculations $ Many of these firms benefit from Canada's generous R&D tax treatment immediate and full write-off for all expenditures in R&D capital equipment, and appreciable tax credits. Relative Competitiveness of R&D Tax System Manitoba Nova Scotia New Brunswick Quebec Ontario Saskatchewan British Columbia Newfoundland Alberta California Minnesota Pennsylvania Vermont Massachusetts New Jersey North Carolina Prince Edward Island Colorado Texas Washington After-tax Cost of $1 R&D Expenditure 0.400.450.500.550.60

17. CANARIE’s CA*Net2: A High speed network connecting Canada’s research community together CANARIE is now working with the research community and private sector partners to develop CA*Net3, the world’s first national optical Internet network. CA*net2 connects up to 13 advanced regional research networks that carry most of Canada's major universities and research institutions, through a high speed ATM network.

18. All of these assets produce results Source: Business Week, Sept. 2, 1996 Data: Institute for Scientific Indicators 0 1 2 3 4 5 6 U.S. U.K. Canada Germany France Italy Japan No. of papers per capita No./1000 Canada has the highest number of scientific papers per capita. Increasingly, Canada is becoming a knowledge based economy Number of papers per capita