Canada Rated More Business-Friendly Than U.S.

Canada has swept past the U.S., Germany and Japan in a Bloomberg ranking of the best countries for doing business. Canada rose four places to reach second place, behind only Hong Kong, which led for a third straight year.

The U.S. fell one spot to third place in the index that’s based on six criteria, followed by Singapore and Australia.

Canada’s upswing in the ratings reflects recent corporate tax cuts and the impact of a weakening dollar that policy makers are projecting will help the world’s 11th-largest economy rebound from weaker-than-expected exports. A falling dollar lowers input costs relative to competitors, while the tax cuts helped make investments more profitable.

“Those are two big factors,” said John Manley, a former Canadian finance minister who is now head of the Ottawa-based Canadian Council of Chief Executives. “Compared with a lot of the world, we have a pretty good story to tell.”

After rising for much of the previous decade, Canada’s currency has depreciated since 2011, amid weakening commodity prices and as investors regained confidence in the U.S. economy. The drop has accelerated since October, when the Bank of Canada dropped its bias for higher interest rates, a move that Prime Minister Stephen Harper endorsed. The dollar is down 14 percent from its post-recession high on July 21, 2011 and has dropped 6.2% since the bank’s Oct. 22 announcement.