Northern Exposure

Once scorned as a provider of commodities, comedians and littleelse, Canada has become increasingly attractive for entrepreneurs.In recent years, many small U.S. companies have begun moving partsof their operations to Canada or even relocating their entirebusinesses there. In the entertainment industry alone, the U.S.Department of Commerce believes hundreds of small and largeAmerican companies have outsourced tens of billions of dollars ofTV and movie work to Canada over the past five years.

While the United States is struggling through a prolonged periodof economic stagnation, Canada has recorded the strongest economicgrowth of any industrialized nation over the past two years-growththat makes it easier for companies in Canada to find customers,boost profits and build a capital base. Canada has grown sorobustly that its finance minister has dubbed it the "NorthernTiger," and venture capitalists in Canada are more generousthan their U.S. peers. "Companies there are able to investmoney back into their operations, work with VCs and raiseproductivity," says Christopher Sands, senior associate at theCanada Project of the Center for Strategic and InternationalStudies, a Washington, DC, think tank.