Investment in Ontario will open a $22 trillion market for Indian firms: Vic Fedeli

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Victor Fedeli addressing the board of Bombay Chamber of Commerce & Industry. On his right is VS Parthasarathy, Group CFO & Group CIO, Mahindra & Mahindra Ltd.

Ontario is Canada’s leading manufacturing province, known for its robust car industry and the largest IT hub outside Silicon Valley. With its highly developed manufacturing, financial services and IT industries, it is the largest exporter among all Canadian provinces. Victor Fedeli, Ontario’s Minister of Economic Development, Job Creation and Trade, was in India to explore closer economic ties with Indian states and corporations. He spoke to Policy Circle on a wide range of topics. Edited Excerpts:

Whats the future of Ontario’s economic ties with India?
The two way trade between Ontario and India is way below its potential. I just returned from Japan on a trade mission. Ontario’s two-way trade with Japan is $14 billion and with South Korea it is $7 billion. I am surprised that our trade with India is just $3.2 billion. Indian exports to Ontario is worth $2.8 billion and imports are just $400 million. That’s too little. Our top export item to India is aircraft and the next largest is scrap metal. This tells me that we have a blank canvas and the the trade can go only one way — upwards.

Ontario is Canada’s manufacturing hub. How can you contribute to Prime Minister Modi’s Make in India programme?
We can assist with talent. That’s why we are here with a trade mission. Half of the team are from the technology sector and the other half from infrastructure. I think it’s a great opportunity for us to share our expertise in infrastructure and technology. We are leaders in advanced manufacturing. For instance the Toyota plant in Ontario is one of its largest. That tells the rest of the world that we understand manufacturing. We understand advanced manufacturing and we have the skills and the technology to share with countries of the world.

Your pension funds are already a major presence in infrastructure and markets…
The fact that our pension funds have invested so deeply in India is a commentary on India as an investment destination. Their trust in India is a real tribute to the future of our ties with India. I learned about an interesting piece of statistics here. Every minute, 30 people move from rural India to cities. That is a cool 16 million people every year. In Canadian numbers, the migration is big enough to create a city the size of Ottawa every month. This tells us there is a great opportunity and there is a lot of work to do.

What are the major hurdles in doing business with India?
I think the opportunities are the same in both Ontario or in India. I can tell you how we handle our hurdles. Our govt has been in power for 15 months and the very first thing our premier Doug Ford did was to declare Ontario open for business. This is a message that other states and countries can emulate. If you look at the province of Ontario, there are 14 million people, all of Canada has 34 million. The govt went in and began reducing the cost of doing business. We introduced something called an accelerated cost allowance to help businesses write off their costs. We lowered taxes. We did everything that a govt could do. We helped businesses save $5 billion in the first year. Next year, we plan to cut $5.4 billion in costs. So it is like saving $5 billion every year. Lower taxes create jobs. In Ontario, the business community responded to tax cuts by hiring 2,56,000 people. That’s a huge number for 15 months.

Business leaders like Bill Gates are calling for higher taxes on businesses and the rich…
Higher taxes do not create jobs, but lower taxes do. We cut costs by $5 billion, the businesses started hiring. When we cut taxes, our corporate tax revenue grew by $1.3 billion.

What are the investment opportunities for Indian companies in Ontario?
The opportunities are both ways. Infrastructure projects in India offer a great opportunity for Ontario companies. We also see a real opportunity for Indian companies to invest in Ontario. It will open the North American market for them. A plant in Ontario will give them access to the $22 trillion North American market.

Which are the sectors for Indian companies to invest?
They can be very diverse. We have the second largest IT cluster in North America. We are also No 2 in automobiles after Detroit. It’s a fabulous opportunity now for Indian companies that want to get into these sectors. Aerospace is another big sector along with AI and block chain. I can tell you that Ford, GM and Uber have all opened facilities under connected and autonomous vehicles. Ford hired 400 people in Ottawa, GM Hired 700 people in Toronto, and two weeks ago, I inaugurated Uber’s connected and autonomous vehicle facility.

There are many Indians in Ontario…
It is all people to people… we find that they are an extremely dynamic part of the growth of Ontario and we are grateful for that.