Keidanren Business Partnership Mission luncheon
November 27, 1996
Tokyo, Japan
I am delighted to be here today, and to see so many familiar faces.
Let me begin by congratulating Mr. Ejiri for his role as the overall
leader in the recent Keidanren Partnership Mission to Canada.
I would also like to thank Mr. Zaizen and Mr. Ihara for leading
the two sector teams that travelled across Canada to meet with
Canadian business.
This is my first official bilateral visit to Japan as Prime Minister,
though I was in Osaka for last year's APEC Summit, and have been
here many times before in different capacities.
Each time I travel in your gracious country, I am struck by the
dynamism, vitality and tremendous energy of the Japanese people.
I am also struck by how much our bilateral relationship has developed
over the years.
Japan is Canada's most important partner across the Pacific.
We export as much to Japan as we do to all of the rest of Asia
combined. That means jobs for Canadians -- and that is an extremely
important priority of my government.
Japan and Canada are engaged across a wide range of issues --
political dialogue on major international issues, a strong economic
relationship, extensive cultural exchanges, and personal connections
based on the growing movement of tourists and students in both
directions.
One good example is the "Today's Japan" festival that
ran for 10 weeks in Toronto last year. The festival was opened
by Prince and Princess Takamado, and was a tremendous success,
drawing more than half-a-million visitors.
The Canada-Japan relationship is a model of the relations we want
to enjoy with all of our partners across the Pacific. We are very
different countries, but we can still work together. We can grow
closer while still remaining true to our traditions and ways of
life.
Canada's growing cooperation with Japan comes from an increased
awareness in Canada of our destiny as an Asia-Pacific nation.
As we look outside our borders to a much larger world, we see
that the Asia-Pacific region is very much front and centre.
To affirm this important dimension of Canadian life, my government
has declared 1997 as the Year of Asia-Pacific in Canada. This
will be an important opportunity for all Canadians to celebrate
the many connections that increasingly link us to this region.
I met earlier today with Mr. Ejiri and members of the Keidanren
Partnership Mission who visited Canada last September. They spoke
positively of the dramatic changes that they have seen in Canada.
I am told that many Japanese business leaders have been watching
the fundamental reforms taking place in Canada's economy. Over
the past three years, my government has initiated fundamental
fiscal reforms and economic restructuring.
When our government took office three years ago, we faced a monumental
task. Canada's deficit was over 6% of Gross Domestic Product.
We had one of the worst fiscal records in the G-7. We knew that
fundamental change was required.
In the last three years, we have put the country's finances in
order. It has not been easy, but we have had the full support
of the Canadian people. And for that my government is very grateful.
We have reduced spending dramatically. Our deficit in 1996-97
will be less than 3% of Gross Domestic Product on a public accounts
basis. More important, new financial requirements -- which is
the way most industrialized countries measure their deficits --
will be less than 1% of GDP in 1997-98. In 1998-99, the government
will have no new borrowing requirements. In other words, in 1998-99,
on a national accounts basis, Canada's budget will be in balance.
This is a remarkable achievement in a few short years.
We have achieved this with virtually no inflation. The Canadian
economy has created more new jobs than Germany, France and the
United Kingdom combined. And we have been able to preserve our
social safety net.
Interest rates are lower than they have been in forty years.
Canadian short-term rates are more than three points lower than
comparable American rates. And for the first time in a long time,
ten-year Canadian and American rates are about the same.
Independent forecasters, including the OECD and the IMF, predict
that Canada's economy will grow faster than that of all other
G-7 countries in 1997 and 1998.
We have enormous natural resources, an educated and skilled workforce,
and a high technology sector that is at the cutting edge in many
industries.
For Japanese investors like yourselves, Canada's economy has never
before offered such an inviting investment climate.
The implementation of the NAFTA is also significant for members
of the Keidanren looking to invest in Canada or expand their existing
operations. Under this agreement, you can invest in Canada and
have secure access to a market of over 360 million consumers.
NAFTA strengthens an already convincing case for investing in
Canada. That message is being heard in Japan.
Japanese investment is vital to Canada's economic prosperity,
and an important creator of jobs for Canadians. Japan is now the
third largest foreign investor in Canada, with 440 firms employing
almost 50,000 people.
Major Japanese companies such as Toyota and Honda see the attractiveness
of the Canadian market, and are expanding their plants in Ontario.
So too do smaller firms, such as Sakai Spice, which is building
a mustard crushing plant in Alberta. There are many other examples
in the last year alone.
Japan is also Canada's second most important source of portfolio
investment. The increasing quality and attractiveness of Canadian
financial assets has not gone unnoticed by Japanese investors.
The latest survey shows major Japanese financial institutions
holding over $40 billion of Canadian government assets.
But the flow is not all one way. Canadian companies are moving
into the Japanese market. Cognos, Northern Telecom, Newbridge
Networks, and Four Seasons Hotels have joined the expanding ranks
of Canadian companies in Japan.
Outward-looking organizations such as the NAFTA and APEC contribute
to prosperity through enhanced trade and investment.
I was very pleased with the progress that APEC leaders made at
our recent meeting in Manila towards our shared vision of free
trade in the Asia-Pacific region.
For Canada and Japan, trade has been the pillar of our relationship.
Over 37% of Canada's GDP depends on exports. Japan is our second
largest market in the world, after the United States.
In 1995, our exports to Japan increased by 24% to exceed $12 billion,
while two-way trade between our two countries topped $24 billion.
Overall, Canadian exports to Japan during the past three years
have increased in value by a remarkable 61%.
Canada is also an important market for Japanese manufactured goods.
Japanese exports to Canada have seen strong increases in recent
years, driven by a growing Canadian economy.
While we continue to be a major supplier of raw and semi-processed
products, there are significant increases in our manufactured
exports.
We used to sell only lumber to the Japanese housing market; now,
we sell whole packaged houses -- complete with tatami rooms, finished
doors and windows.
I will visit some of these homes tomorrow during my visit to Nagoya.
Canadian software exports now exceed $100 million, and programming
is being tailored expressly for Japanese clients. For example,
the software that guides Tokyo City's traffic control system was
developed by a company from Montreal.
I will visit this site later this afternoon.
Japan is also the number one source of overseas tourism revenue
to Canada. A record 670,000 Japanese visited Canada in 1995,
an increase of almost 19% over the previous year. I want to set
as an objective that within a few years there be one million Japanese
tourists visiting Canada on an annual basis.
We want to build on our strengths, and move to the next stage
of economic engagement with Japan.
Canada's business community, supported by the federal and provincial
governments, has developed Canada's Action Plan for Japan,
which is helping to diversify our economic relationship. A revised
version of the Plan was released earlier today.
We took a hard look at Canadian capabilities and technologies,
and matched them against Japan's newly emerging import sectors,
to identify those Canadian industries most likely to succeed here.
The Plan is working -- businesses are increasing their awareness
of the Japanese market, adapting their products to suit Japanese
tastes, and systematically seeking new business opportunities
here.
The growth in trade and investment has been helped by effective
public and private sector institutions.
The Canada Japan Business Conference, which many of you regularly
attend, is now in its 20th year. I am proud to have played a part
in starting the Conference when I was Minister of Industry, Trade
and Commerce.
I am pleased to recognize at this time three Keidanren members
who have each made an important contribution to the Canada-Japan
relationship -- Mr. Ejiri, Chairman of Mitsui & Company; Mr.
Morohashi, Chairman of Mitsubishi Corporation; and Mr. Okawara,
Executive Adviser to the Keidanren.
I will be discussing with Prime Minister Hashimoto ways in which
our governments' economic consultations can be made even more
responsive to our business communities -- to facilitate trade
and avoid disputes.
Today, I have spoken about the many connections that bind us together.
The peoples of Canada and Japan are more prosperous for these
developments, and our economies are more secure.
But we must not be complacent. Too much is at stake. As partners
across the Pacific, we must continue to show leadership in a rapidly
changing world.
Working together, we can face the future with confidence and hope.
Thank you.
|