The KPMG study examines 26 key business cost elements, including labour, taxes, real estate and utilities, in 16 featured Canadian cities and compares more than 110 cities in 14 countries around the world.
Although Prairie cities come out on top in terms of business competitiveness among Midwest US and Western Canada, they trail Eastern Canada business centres such as Montreal and Halifax among others. On a national basis, Winnipeg ranks eighth among the 16 Canadian cities surveyed. Winnipeg's moderate wage levels influence its overall position.
"Even though Prairie cities rank middle of the road in terms of business cost competiveness across Canada, they have many attractive qualities, not least the lowest electricity costs in Canada for businesses in Winnipeg," said Austin Abas, Office Managing Partner with KPMG in Winnipeg. "R&D is a strong sector, with Winnipeg having the lowest business costs of any city west of the Maritimes."
Rankings and cost indices for featured Canadian cities
(Listed from lowest cost to highest cost)
| 2012 Rank |
City |
2012 Cost Index** |
|
2012 Rank |
City |
2012 Cost Index** |
1 |
Moncton |
92.3 |
|
9 |
Windsor-Essex |
95.1 |
2 |
Fredericton |
92.5 |
|
10 |
Saskatoon |
95.2 |
3 |
Halifax |
92.7 |
|
11 |
St.John's |
95.3 |
4 |
Trois-Rivières |
92.8 |
|
12 |
Toronto |
95.7 |
5 |
Charlottetown |
93.0 |
|
13 |
Edmonton |
96.0 |
6 |
Québec City |
94.2 |
|
14 |
Vancouver |
96.5 |
7 |
Montréal |
94.3 |
|
15 |
Prince George |
96.6 |
8 |
Winnipeg |
94.8 |
|
16 |
Calgary |
97.3 |
**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. A cost index greater than 100 indicates higher costs than the US. For example, an index number of 95.0 represents a 5.0 percent cost advantage relative to the US.
Across Canada:
- Moncton ranks first among the 16 featured Canadian cities. Low labour and corporate tax costs help Moncton's ranking.
- Montréal ranks seventh among the 16 featured Canadian cities. Low or moderate transportation costs, industrial leasing costs, and electricity costs help Montréal's ranking. It also has the lowest business costs among the 30 largest cities in Canada and the United States (all with metropolitan populations of 2 million or more).
- Toronto ranks 12th among the 16 featured Canadian cities. Moderate industrial leasing costs, transportation costs and natural gas costs are advantages for Toronto relative to the other Canadian cities, while high labour costs add to the total cost picture in Toronto.
- Calgary ranks as the most expensive among the 16 featured Canadian cities, but still ranks as being more cost effective than 42 international cities studied. Relatively high wages, suburban office leasing costs, and electricity costs all add to Calgary's total cost picture, while low natural gas costs represent a plus for Calgary.
- Vancouver ranks 14th among the 16 featured Canadian cities. Vancouver has the highest office leasing costs among the 16 featured Canadian cities, for both downtown and suburban office space, while relatively low utility costs benefit Vancouver.
Canada vs. the Globe
Among the nine mature markets studied, Canada ranks third for business costs, with costs 5.0 per cent lower than in the US. While the United Kingdom and the Netherlands rank only marginally ahead of Canada (by 0.5 and 0.3 percentage points, respectively), the favourable results for these countries are due, in part, to devaluations of the euro and the pound resulting from the European debt crisis.
"Canada continues to be a competitive place to do business," said Elio Luongo, Canadian Managing Partner, Tax. "Despite Canada's sluggish productivity rates, our cost position did not change from our previous study in 2010, and that tells us that through the current global economic turbulence, and despite the strong loonie, we are standing our ground."
Rankings and cost indices for featured countries
(Listed from lowest cost to highest cost)
| 2012 Rank |
Mature or HG Rank |
Country |
2012 Cost Index |
% cost advantage versus US |
High Growth Market |
1 |
1 |
China |
74.2 |
25.8% |
2 |
2 |
India |
74.7 |
25.3% |
3 |
3 |
Mexico |
79.0 |
21.0% |
4 |
4 |
Russia |
80.3 |
19.7% |
5 |
5 |
Brazil |
93.0 |
7.0% |
Mature Market |
6 |
1 |
United Kingdom |
94.5 |
5.5% |
7 |
2 |
Netherlands |
94.7 |
5.3% |
8 |
3 |
Canada |
95.0 |
5.0% |
9 |
4 |
France |
96.1 |
3.9% |
10 |
5 |
Italy |
97.9 |
2.1% |
11 |
6 |
United States |
100.0 |
0.0% |
12 |
7 |
Germany |
100.1 |
-0.1% |
13 |
8 |
Australia |
103.7 |
-3.7% |
14 |
9 |
Japan |
109.4 |
-9.4% |
About KPMG Competitive Alternatives Study
KPMG's 2012 Competitive Alternatives study provides an independent comparison of international business locations in more than 110 cities in 14 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 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 manufacturing, digital, research and development, and corporate services.
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 2012 study are as follows: AUD $0.99, BRL $1.80, CAD $1.02, CNY ¥6.36, EUR €0.74, GBP £0.64, INR 50.75, JPY ¥77.33, MXP $13.64 and RUB 31.07.
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 145,000 professionals, in 152 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.
Follow @KPMG_Canada for more facts from the Competitive Alternatives 2012 study.
For more information, contact:
Kathleen Killen
Senior Manager, Media Relations
(416) 777-3447
kkillen@kpmg.ca
