2. Superior Quality Workforce Availability of Skilled Labor Low Labor Costs Low Labor Costs (cont’d) Competitive Labor Costs Low Employer-Sponsored Benefits Low Employer-Sponsored Benefits (cont’d) Low Payroll Costs Rising Productivity Low Labor Turnover Significant Reduction in Work Stoppages A Highly Educated Workforce University Excellence Table of Contents

3. Superior Quality Workforce Knowledge Workers — World Rank* Canada U.S. France U.K. Germany Italy Japan Index 1st 3rd 8th 20th 11th 18th22nd The overall skill level of Canada's workforce ranks high among competing countries. * Tertiary education enrollment standing among the 53 countries considered in the Global Competitiveness Report, 1998

4. Availability of Skilled Labor Plus, anecdotal evidence abounds that a shortage of capable workers is a more serious problem in the U.S. than in Canada, and that it is on the rise. -For example, Coopers & Lybrands' “Trendsetter Barometer (March 1999)” reports that “nearly two thirds of fast track technology businesses have come up short in their hiring of IT workers for their U.S. operations over the past 12 months.” Availability of Skilled Labor* Germany France Canada Japan U.S. Italy U.K. Index 3rd 8th 15th 16th 23rd 26th 34th * Standing among the 47 countries considered in the World Competitiveness Yearbook, 1999

5. Low Labor Costs * Figures are for 1997. Source: U.S. Bureau of Labor Statistics, 1998 A competitive labor market is keeping wage settlements down. Cost of Labor — Manufacturing* 28.28 19.37 18.24 17.97 16.74 16.55 15.47 Germany Japan U.S. France Italy Canada U.K. $U.S. per hour

6. Low Labor Costs (cont’d) Canada has the second lowest manufacturing wages in the G-7. Richard Peabody, President Harris Farinon Canada Occupational Wages — Knowledge Workers, 1998 Full-time, full-year wages* ($U.S. PPP**) * Mean earnings are shown for Canada, median earnings for the U.S. Data has been converted to full-year assuming a 50-week work year. ** Purchasing power parity Source: IC calculations based on Statistics Canada and U.S. National Science Foundation "Our costs per engineer are roughly half of what they would be in the United States." [combination of low salary and wage costs, as well as Canada's and Quebec's superb R&D tax treatment ] Engineers, Architects & Surveyors Mathematicians & Computer Scientists Natural Scientists $49,400 $46,900 $41,400 $37,068 $34,710 $33,016

7. Between 1992 and 1995, Canada registered the smallest total increase in hourly manufacturing compensation costs among G-7 countries Competitive Labor Costs Compensation per Hour (National Currency Basis) * Source: US Bureau of Labor Statistics, Monthly Labor Review (November 1996), p. 104 90 95 100 105 110 115 120 Canada U.S. Germany France 1992 1993 1994 1995

8. Low Employer-Sponsored Benefits Employer-sponsored benefits are lower in Canada than in the U.S. Total payments for Canadian employer- sponsored plans and time not worked are 18.0% of salary and wages compared to 31.7% in the U.S. -Lower medical insurance premiums and vacation and holiday payments are the prime reasons. Statutory Benefits as a % of wages — 1998 G-7 Comparison Canada U.K. U.S. Japan Germany France Italy 4812162024283236404448525660 Source: KPMG Management Consulting, 1999

9. Low Employer-Sponsored Benefits (cont’d) Payroll taxes are lower in Canada than anywhere else in the G-7. * Employer-paid statutory benefits and wage-based taxes include: premiums for unemployment insurance plans; public medical plan premiums; public pension plan contributions; premiums for workers' compensation insurance; and other payroll taxes. *KPMG Management Consulting, 1999 Source: KPMG Management Consulting, 1999 Province - State Comparison Alberta B.C. New Brunswick Saskatchewan Nova Scotia P.E.I. Ontario Manitoba North Carolina Newfoundland Minnesota California Vermont Massachusetts Pennsylvania New Jersey Washington Colorado Texas Quebec 681012

10. The latest OECD report found Canadian payroll costs as a percentage of the GNP to be the lowest among all G-7 countries. Low Payroll Costs * Source: OECD (1996) Payroll Taxes as a Percentage of GNP (1994) 0 2 4 6 8 10 12 14 16 18 20 CanadaUKUSJapanItalyGermanyFrance

11. Canadian productivity is rising, especially in the manufacturing sector. Canadian unit labor costs have fallen sharply since 1992 and are among the lowest in industrialized nations. Significantly lower than in the U.S. Rising Productivity * Source: US Bureau of Labor Statistics, Monthly Labor Review (November 1996), p. 104 Unit Labor Costs ($US) 0 20 40 60 80 100 120 CanadaU.S.GermanyFrance 1992199319941995

12. Low Labor Turnover Workers are less "footloose" in Canada than in the U.S. -Lower turnover rates are associated with reduced training, hiring and separation costs. Lindo Lapegna, President Testori Americas Corporation “The high productivity and low turnover we have experienced over the past 14 months have more than fulfilled our expectations. And our decision to expand is a direct result of that.” *U.S. data is based on the Current Population Survey (February 1998). Canadian data is an annual average. **FIRE is Finance, Insurance and Real Estate in the U.S. In Canada, FIRE also includes Leasing. Source: U.S. Bureau of Labor Statistics and Statistics Canada Average Job Tenure by Industry Group — 1998* 05101520 All Industries Public Administration Services FIRE** Trade Construction Manufacturing Agriculture Years with Current Employer

13. Significant Reduction in Work Stoppages 0 2,000 4,000 6,000 8,000 10,000 12,000 1976 198619901992199319941995 Source: Department of Finance, Economic and Fiscal Reference Tables. August 1996, p.72. Time Lost in Work Stoppages, Selected Years (thousands of person-days) Canadian Labor-Management relations have become markedly better over the past 2 decades. Incidence of strikes and lockouts has declined dramatically in recent years: From 1986 to 1996, the number of work stoppages per year fell by almost 60%. Time lost due to work stoppages has dropped by almost 70% since 1990. Clear trend toward fewer industrial disputes and fewer days lost due to work stoppages.

14. Canadians are highly educated – 47% of Canadians over 25 have a post-secondary education – 30% have a university degree A Highly Educated Labor Force Percentage of the Population 25-64 Years of Age with Tertiary Education, 1995 0 10 20 30 40 50 CanadaUSNorwaySwedenGermanyUKFrance University Degree Non University tertiary Source: OECD

15. Canada’s 67 universities and colleges produce more than 25,000 graduates per year in math, engineering, and pure and applied sciences The U.S. Gourman Report scored 10 Canadian electrical engineering programs in the top 22, and 18 in the top 40 of North America RANKING OF ELECTRICAL ENGINEERING UNIVERSITY PROGRAMS Source: 1998 Gourman Report, U.S. Institution M.I.T. Stanford Berkeley Illinois › Toronto UCLA › McGill Cornell › U.B.C. › McMaster Purdue Southern California Princeton Michigan Carnegie Mellon Polytechnic-Brooklyn › Queen’s › Alberta › Calgary › École Polytechnique › Manitoba › Saskatchewan 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 4.92 4.91 4.88 4.86 4.82 4.81 4.80 4.79 4.77 4.76 4.75 4.74 4.73 4.72 4.71 4.70 Score U.S. Rank Cdn. Rank University Excellence