Stable total cost picture helps move Canada up global list. Moncton ranks as the most competitive city for business in Canada.
TORONTO, March 26, 2014 /CNW/ - KPMG's Competitive Alternatives 2014 report released today revealed Canada as the most cost competitive mature market country for business. Notable decreases in sea freight and natural gas costs, combined with very stable facility costs, limited increases in labour costs, and a three per cent drop in the Canadian dollar helped drive Canada's rise in the international rankings. The study, which is conducted biennially, looks at more than 100 cities and 10 countries around the world, examining 26 significant business cost elements, including labour, facilities, transportation, utilities and taxes.
Mexico, a NAFTA partner and only high growth/emerging country included in the study, ranked first overall among the 10 countries, with lower business costs than any of the mature market countries examined.
Among 107 cities featured in the study, 15 were Canadian. Moncton ranked as the most competitive city in Canada for the second consecutive time. The study also revealed that larger Canadian cities are all more cost competitive than comparable large US cities.
Canada vs. the world
Rankings and cost index results for all countries (listed from lowest cost to highest cost)
2014 Rank |
Country | 2014 Cost Index |
% cost advantage versus US |
High Growth Market | |||
1 | Mexico | 81.3 | 18.7% |
Mature Markets | |||
2 | Canada | 92.8 | 7.2% |
3 | Netherlands | 94.5 | 5.5% |
4 | United Kingdom | 94.6 | 5.4% |
5 | France | 97.4 | 2.6% |
6 | Italy | 98.8 | 1.2% |
7 | Japan | 99.2 | 0.8% |
8 | Australia | 99.3 | 0.7% |
9 | United States | 100.01 | — |
10 | Germany | 100.9 | -0.9% |
1 The US baseline of 100.0 reflects costs in the four largest US cities: New York City, Los Angeles, Chicago and Dallas-Fort Worth. National costs for all other countries are also based on major cities in each country.
Canadian Regional Breakdown
Looking more closely at the Canada-specific results, Atlantic Canada cities took four of the top five spots in the study with Moncton first, followed by Charlottetown in second place. New to the top five is Quebec City, ranking in third place and improving from its sixth place ranking in 2012. More competitive leasing rates for both industrial and office space are the main factors specific to Quebec City that helped it to move up in the rankings.
The rankings of the 15 Canadian cities paint an interesting picture of the costs associated with doing business in Canada:
Rankings and cost indices for featured Canadian cities
(listed from lowest cost to highest cost)
2014 Rank |
City1 | 2014 Cost Index2 |
2014 Rank |
City1 | 2014 Cost Index2 |
|
1 | Moncton | 90.1 | 9 | Saskatoon | 92.8 | |
2 | Charlottetown | 90.4 | 10 | Sudbury | 93.5 | |
3 | Quebec City | 90.7 | 11 | Toronto | 93.6 | |
4 | Fredericton | 90.8 | 12 | Kamloops | 93.6 | |
5 | Halifax | 91.6 | 13 | St. John's | 93.7 | |
6 | Niagara Region3 | 91.9 | 14 | Edmonton | 94.0 | |
7 | Winnipeg | 92.0 | 15 | Vancouver | 94.6 | |
8 | Montreal | 92.0 |
1 Cities represent an intentional mix of population, regional geography, major industries, and economic circumstance.
2 Business costs in this table are expressed as an index, with the United States being assigned the baseline index of 100.0. A cost index less than 100 indicates lower costs than the US. For example, an index number of 95.0 represents a 5.0 per cent cost advantage relative to the US.
3 Niagara Regional Municipality.
QUOTES
"This year's survey findings show that organizations looking to expand their operations should consider Canada. As the top mature market country, our favourable business cost fundamentals and moderate corporate tax rates, as well as tax credits and incentives, make Canada a cost competitive location. Together with our high quality of life, this helps make Canada an attractive investment opportunity for organizations and their employees."
"Businesses may look to set up shop in larger cities, but this year's study shows that many regional cities remain attractive options and offer great value for organizations focused on keeping costs low while responding to market and customer needs. It's clear that Atlantic Canada continues to be an attractive location for international business."
LEARN MORE
Competitive Alternatives Report
Competitive Alternatives Infographic
Competitive Alternatives website
Canadian regional backgrounder
KPMG Tax
@KPMG_Canada - #BizCosts, #CompAlt14
KPMG on LinkedIn
About KPMG's Competitive Alternatives Study
KPMG's 2014 Competitive Alternatives study provides an independent comparison of international business locations in more than 100 cities in 10 countries around the world.
The study looks at a wide range of issues when assessing competitiveness for business with a primary focus on business costs, but also separately considers population and demographics, education and skilled labour, innovation, infrastructure, economic conditions, regulatory environment, cost of living and personal quality of life. It also examines cost competitiveness of locations for different industry sectors including digital services, research and development, corporate services and manufacturing.
The study enables business executives to take an initial scan of how business costs compare among a variety of cities in leading countries. It also assists KPMG professionals and economic developers in their work with businesses considering relocation or expansion, and enables policy makers to help determine the impact of a proposed tax and/or incentive policy change on the cost competitiveness of their jurisdictions.
To access the full report, please visit www.competitivealternatives.com.
Exchange rates per USD used in the Competitive Alternatives 2014 study are as follows: AUD $1.08, CAD $1.05, EUR €0.73, JPY ¥100.43, MX $13.02 and UK £0.62.
About KPMG
KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm of KPMG International Cooperative ("KPMG International"). KPMG member firms around the world have 155,000 professionals, in 155 countries.
The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.
Image with caption: "KPMG's Guide to International Business Location Costs (CNW Group/KPMG LLP)". Image available at: http://photos.newswire.ca/images/download/20140326_C6778_PHOTO_EN_38343.jpg
SOURCE: KPMG LLP
Briana D'Archi
National Senior Manager, Communications
KPMG in Canada
416.777.8169
[email protected]
Julie Bellissimo
National Manager, Communications
KPMG in Canada
416.777.3988
[email protected]
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