Canada’s Business Cost Advantage

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KPMG has released the results of Competitive Alternatives 2010, its annual study comparing business locations in North America, Europe and Asia Pacific.

The report compares business costs for more than 100 cities in 10 countries – Australia, Canada, France, Italy, Japan, Germany, Mexico, the Netherlands, the U.K. and the U.S. – and measures the impact of 26 cost components as applied to 17 different business operations over 10 years. It also looks at non-cost factors that influence the location for businesses. Some of the various factors considered include labour, facilities, transportation, utility costs and taxes/tax incentives.

The four largest cities included in the study – New York City, Los Angeles, Chicago and Dallas-Fort Worth – are the baseline against which business costs around the world are compared.

Canada offers business advantages

The study shows that Canada is a cost leader, with overall business costs sitting at five per cent lower than the U.S. We also receive high marks for our tax system, with Canada offering manufacturers the lowest effective corporate income tax rates, and significant tax incentives for R&D. And while Mexico offers the lowest industrial facility rental costs, Canada offers the third lowest rental costs (the U.S. is second).

In a cost index comparison of 41 large cities with a population of two million or more, Montreal is ranked the number-3 least expensive city, while Vancouver and Toronto are the fifth and sixth respectively (the top two are Monterrey, Mexico and Mexico City). In the agri-food and food processing industry, Canada ranks number three in the cost index comparison, with Mexico and the Netherlands taking the first and second spot, respectively. When broken down by regions of North America, Canadian cities that came out on top include Moncton, N.B., Sherbrooke, Que., Winnipeg, Man., and Prince George, B.C.

To view the full results, see www.competitivealternatives.com