CANADA-BRAZIL: OPPORTUNITIES IN A DIFFICULT TIME Craig Alexander SVP & Chief Economist TD Bank Group

GLOBAL ECONOMY STRUGGLING 2

NORTH AMERICA OUTPERFORMING 3

GLOBAL SLOWDOWN HAS LED TO COMMODITY CORRECTION… 4

… BUT CANADA WILL REMAIN AN OUTPERFORMER 5

6 TO UNDERSTAND WHY, NEED TO UNDERSTAND CANADIAN ECONOMY

SMALL IN SCALE, BUT SECOND RICHEST PER CAPITA IN G7 7

MEDIAN INCOMES IN CANADA HIGHER THAN THE US, EVEN AFTER TAXES 8

9 HIGHLY EDUCATED POPULATION 4th HIGHEST SHARE OF UNIVERSITIES IN GLOBAL TOP 250 Source: Times Higher Education, TD Economics

WITH THE LOWEST DEBT IN THE G7 10

WELL ANCHORED INFLATION, PRUDENT MONETARY POLICY 11

EASY TO DO BUSINESS & SOUNDEST BANKS IN THE WORLD 12 World Bank 2015 Ease of Doing Business IndexSoundness of banking system Source: World BankSource: World Economic Forum

COMPETITIVE CORPORATE TAX RATES 13

DIVERSIFIED ECONOMY 14

DIVERSIFIED EXPORT SECTOR 15

CANADA IS AMONG THE MOST OPEN TO TRADE 16

CANADIAN ECONOMY STRONGLY TIED TO THE U.S. ECONOMY 17

CANADA CONTINUES TO PURSUE TRADE DEALS AND OPPORTUNITIES 18

OPPORTUNITY FOR MORE TRADE WITH BRAZIL 19

BILATERAL TRADE EXPANDING, BUT LOTS OF OPPORTUNITY FOR MORE 20

CANADA IS OPEN TO INVESTMENT 21

CANADA'S LONG-TERM GROWTH OUTLOOK BY SECTOR 22

CANADA'S PRODUCTIVITY CHALLENGE 23

SOLUTION: ECONOMY SHIFTING TOWARDS SERVICES… 24

…AND HIGHER VALUE ADDED MANUFACTURING 25

CANADA AND BRAZIL FACE MANY COMMON CHALLENGES Both must cope with the weak global economy that is fraught with risk Cannot count on commodities to fuel growth in the near term, but will benefit when global demand recovers Monetary policy must constrain inflation, while promoting growth Governments must run sound fiscal policy and respect budget limits, but also invest in core public priorities – including infrastructure Promoting exports and investment can make economy less reliant upon domestic demand Going abroad creates opportunities, but also means firms must strive to be competitive, productive and innovative Policy makers must always look for ways to boost or enhance competitiveness Challenges are often opportunities to unlock potential 26

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