The surprise isn't that Ottawa has launched a new agency to sell Canada to foreign investors. It is that the government waited until 2018 to create it.
The mandate of Invest in Canada, launched on Monday in Ottawa, is to work with cities, provinces and the private sector to create "a single-window service" for attracting foreign direct investment.
Most of the rest of the rest of the world has been doing this sort of thing for decades.
Countries such as South Korea, Singapore, Ireland and Costa Rica routinely win awards for the work of their investment-promotion agencies, including hand holding of prospective investors, diverse language skills, user-friendly websites and, of course, results.
International Trade Minister François-Philippe Champagne enthusiastically vowed that Ottawa's latecomer to the global promotion game would "position Canada as the top investment destination."
He also named two businessmen to run the new organization. Cirque du Soleil chairman and former online gambling executive Mitch Garber will head the agency's board of directors. Ian McKay, a former Liberal Party of Canada national director and long-time executive of EuroBrokers International, will be CEO.
Meeting Mr. Champagne's lofty objective won't be easy. The agency will have a budget of roughly $44-million a year to hire staff, integrate the government's existing network of trade commissioners and open offices across the country. That might seem like a reasonable sum, but consider that tiny Singapore's highly successful Economic Development Board has 500 employees and a $400-million budget.
However, the new agency's greatest challenge isn't a lack of resources. It's U.S. President Donald Trump and the uncertainty gripping investment in Canada.
The country is in the throes of a potentially damaging investment chill as business decision makers weigh the impact of a lost corporate tax edge versus the United States, the possible demise of the North American free-trade agreement, rising protectionism and regulatory paralysis gripping major energy projects.
Experts say Canadian and foreign companies are already deferring investments or putting their money in the United States as a result.
Canada has dug itself a deep hole. Foreign direct investment in Canada declined for a third consecutive year in 2017, plunging 26 per cent, according to Statistics Canada. The ratio of non-residential business investment relative to the overall economy has also been shrinking since 2015.
The prospects for business investment this year aren't promising. A Statistics Canada survey of businesses released last month projected that business capital spending will drop 1.1 per cent in 2018, led by a fourth consecutive yearly drop in oil and gas investment. The Bank of Canada's latest quarterly business outlook survey showed a more optimistic view, with a growing number of companies saying they intend to boost investment in machinery and equipment this year. But at the same time, companies say they are increasingly worried about NAFTA uncertainty, tax policy and regulatory hurdles.
Canada needs to do better. And launching Invest in Canada is a worthy first step. Creating "a world class" trade promotion agency was among the first recommendations of Finance Minister Bill Morneau's Advisory Council on Economic Growth, headed by McKinsey & Co. global managing partner Dominic Barton.
But Mr. Barton's council cautioned in a recent progress report that the new agency must have a clear idea of the sort of investors it wants to attract, that it work co-operatively with other departments and levels of government and that it provide highly personalized service to would-be investors. "The organization cannot be active in all sectors and should develop a clear strategy to promote those with the greatest potential," according to the council.
That may be easier said than done. Ottawa is often reluctant to pick winners and losers, preferring instead to spread the wealth between regions and industries for political gain.
The choice of Mr. McKay – a former party executive and policy adviser to several Liberal ministers – to run the agency also suggests Invest in Canada will have both an economic role, and a political one.
At the launch event, Mr. Champagne talked less about what the agency will actually do than about where its offices will be located.
"We are going after investment and that means we need to be represented from coast to coast to coast," the minister said. "To that end, I will work with senior leadership to determine locations for these regional offices."
It's not an auspicious start, given the daunting investment challenges facing the country.