• Streamlined Border Flows

• Streamlined Border Flows (cont’d))

• Efficient Access

• Efficient Access (cont’d)

• Distances to U.S. Markets are Very Short

• Distances to U.S. Markets are Very Short (cont’d))

• Open Skies Increases Transborder Flights

• Leading Trading Nation

• U.S. and Canadian Economies Are Integrated

• Largest U.S. Trading Partner

• Strong Historical Trade Ties with Europe

• Unique Access to Asian Economies

Table of Contents

Streamlined Border Flows

• Since the enactment of the North American Free Trade Agreement (NAFTA) in 1994, Canada provides long-term assured access to the North American market — nearly 400 million people with a combined GDP of over $9.4 trillion ($U.S.).

.

Source: Statistics Canada

Annual Transborder Crossings – Total Number of Trucks Entering Canada

2

3

4

5

6

7

80 82 84 86 88 90 92 94 96 98

Mill

ions

of C

ross

ings

Streamlined Border Flows (continued)

• In addition to eliminating tariffs, NAFTA provides procedures for:

- border facilitation;- movement of personnel;- investment and intellectual

property protection; and- product certification.

• Automated permit ports, transponder identification systems and joint processing centres are being tested and deployed.

.

Source: Transport Canada

Annual Transborder Crossings – Total Number of Canada-U.S. Air Passengers

9

11

13

15

17

19

80 82 84 86 88 90 92 94 96 98Mill

ions

of C

ross

ings

Efficient Access

• Canada's transportation infrastructure is well connected to that of the U.S., and is among the best in the world.

San Diego

El Paso

Brownsville

LaredoFort

LauderdaleMiami

New York

BostonI-5

I-15I-25

US-83

I-35

I-94I-80

I-75I-69

I-90I-87

I-95

I-29

Edmonton

Halifax

TorontoI-91/ 93

Calgary

Seattle

ChicagoDetroitUS-

219

MontrealOttawa

ReginaWinnipeg

TransCanada Highway

Vancouver

I-15

Efficient Access (cont’d)

• With 31 million people, we have:

-634,600 miles of road system;

-45,347 miles of railway track;

-61,245 miles of pipelines;

-Atlantic, Pacific and Arctic ports;

-9 major international airports; and

-156 Canada-U.S. border crossings.

Select Transborder Highway Corridors

B.C. to San Diego (via I-5)Alberta to San Diego (via I-15)

Alberta to El Paso (I-15/25)Man./Sask. to Brownsville (via US 83)

Winnipeg to Laredo (via I-29/35)Winnipeg/Thunder Bay to Laredo (via I-35)

Winnipeg to Detroit to Sarnia (via I-94)Winnipeg to New York (via I-80)

Sault Ste. Marie to Fort Lauderdale (via I-75)Sarnia to Laredo (via I-69)

Ontario (Fort Erie) to Miami (via US-219)Ontario (Fort Erie) to Boston (via I-90)

Quebec to New York (via I-87)Quebec to Boston (via I-91/93)

New Brunswick to Miami (via I-95)

Distances to U.S. Markets Are Very Short

• Almost half of the U.S. population lives within a 10 hour drive of Toronto, and over 60 percent from a two hour flight.

Source: Transport Canada

CalgaryReginaHalifax

Los Angeles

Denver

New YorkBoston

PhiladelphiaWashington

DetroitChicagoClevelandSt. LouisPittsburgh

Milwaukee

Houston

Atlanta

VancouverToronto

MontréalSeattle

Miami

Mexico City

San Francisco

Winnipeg

300 mi

600 mi CharlottetownSt. John's

Edmonton

Victoria Ottawa

Windsor

QuébecFredericton

Distances to U.S. Markets Are Very Short (cont’d)

Jim Miller, Senior Vice-President, Sales & Marketing

Honda Canada

"There are no longer two separate Canadian and U.S. marketplaces on this continent. It has become one North American market and Canada is an ideal base from which to serve it."

• An "Open Skies" agreement*, signed February 1995, has considerably facilitated business travel between Canada and the U.S.

*Under "Open Skies” Canadian Air Carriers gained unlimited rights to establish routes from any point in Canada to any point in the United States. Similarly, U.S. carriers also gained unlimited access to the Canadian market (with a phase in period for up to three years)

Increase in Transborder Routes Since Open Skies

Scheduled flights between Canada and the U.S.

Source: Transport Canada

106

182

Feb. 1995 April 1999

Source: Transport Canada

Scheduled flights between Canada and the U.S.

Open Skies Increases Transborder Flights

• Business travel between Canada and the U.S. has increased considerably since the inception of The "Open Skies” Agreement (February, 1995)

• Direct air service now links major cities between Canada and the U.S.

0

50

100

150

200

250

Feb. 95 Feb. 97 Feb. 98

Leading Trading Nation

• Canada is the leading trading nation among G-7 countries.

• Canada has the highest portion of trade related GDP.

Exports % of GDP

05

1015202530354045

Canada U.S. G7

1990 1997 1990 1997

05

10152025303540

Canada U.S. G7

Imports % of GDP

Source: Compilation based on data from the World Trade Database, Statistics Canada and the OECD.

• The U.S. imports more from Canada than from any other country

The Canadian and US economy are highly integrated and inter-dependant

Mexico 10.8%

China 8.0%

Germany 5.4%

U.K. 3.4%

Taiwan 3.5%

Korea, S. 3.0%

France 2.6%

Italy 2.2%

All Others 28.5%

Japan 12.8%

Canada

19.5%

Share of U.S. Imports, 1999

*January to September Source: U.S. Department of Commerce

The US’ Largest Trading Partner

Petresa Canada Inc.Jaime Berbés, General Manager,

"We knew there was a window of opportunity for our product but the economics of manufacturing weren't feasible without the NAFTA agreement. Canada's tariff-free status gives us access to North America."

Source: U.S. Department of Commerce

Share of U.S. Exports — 1999*

Japan 8.5%

U.K. 5.8%

Germany 3.9%

Koreas, S. 3.5%

France 2.8%

Netherlands 2.8%

Taiwan 2.7%

Singapore 2.4%All Others 32.5%

Canada 22.9%

Mexico 12.3%

*January to September

• Canada and the U.S. have the world’s largest trade partnership, with two-way trade amounting to C$463.6 billion in 1998. In fact, this averages to slightly over C$1.25 billion dollars a day in trade.

• Between 1994 and 1998, trade between Canada and the U.S. grew at a compound average annual rate of 7.8%.

Strong Historical Trade Ties with Europe

Source: Statistics Canada

• European markets continue to provide tremendous trade opportunities for Canada.

• Two way trade between Canada and Europe is vigorous.

Canada's Trade with Europe — 1994-98

7.54.6

18.66.5

5.45.5

11.27.3

5.64.8

TOTAL E.U.Sweden

IrelandSpain

BelgiumItaly

FranceNetherlands

GermanyU.K.

Average Annual Growth, %

Unique Access to Asian Economies

Canada's Trade with Asia — 1994-98Average Annual Growth, %

5.7

12.68.5

4.0

10.53.7

1.65.3

11.1

46.4Total APEC*

Papua New GuineaPhilippinesIndonesiaThailandMalaysia

Hong KongS. Korea

TaiwanChina

* Excluding U.S. and Mexico Source: Statistics Canada

• The emerging Asian economies are untapped markets and offer long-term potential for Canadian exporters.

• With its geographical location, its immigration links and its active involvement in APEC to reduce trade barriers, Canada is uniquely positioned to gain from the long-term potential of Asian economies.