Western provinces create positive investment climate

Ontario falters and Quebec languishes behind

Ontario and Quebec, Canada's most populous provinces, have fallen behind western Canada when it comes to creating and maintaining a positive investment climate, according to a new report.

Ontario has ranked first or second in the Fraser Institute's Canadian Investment Climate Report between 1998 and 2004, but fell to fourth in 2007, behind Alberta, British Columbia and Saskatchewan.

Only Prince Edward Island comes after Quebec, in ninth place.

"The low scores for Quebec and Ontario are among the most worrying aspects of this year's report. These two provinces are extremely important to the Canadian economy, yet they have chosen to implement policies that are not conducive to attracting investment," said Jason Clemens, co-author of the study.

The Provincial Investment Climate Index evaluates the public policies that create and sustain a positive investment climate. It ranks each province on a scale of one to 10.

Alberta earned the highest score, 8.9 out of 10, and was Canada's top province for policies that encourage and sustain a positive investment climate. B.C. followed in second position with a score of six and Saskatchewan was third with a score of 5.3.

Ontario was fourth overall with a score of five while Quebec, with a score of three, was ninth.

"Three governments of different political orientation in the western provinces have all reduced the tax burden and implemented incentive-based tax relief and are now reaping the benefits of enhanced economic success," said Clemens.

The index is composed of seven components: corporate income tax, fiscal prudence, personal income tax, transportation infrastructure, corporate capital tax, labour market regulation, and burden of regulation.

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