Western Standard

The Shotgun Blog

« Will you celebrate the darkness? | Main | Political Animals on at a special time »

Friday, March 28, 2008

Business getting costly in the West

The international tax and auditing firm KPMG has released its 2008 Competitive Alternatives report which compares business costs in 136 cities in 10 countries. Mexico was included for the first time this year and took the top spot from Australia for cost effectiveness since the last report in 2006, while Canada remained in second. However, whereas in 2006 it was 5.5% cheaper to do business in Canada than the US, this time around that advantage has decreased to 0.6%. "With the Canadian dollar at par, Canada is challenged to maintain the competitive edge it once held," said Mark MacDonald, Global Director, Competitive Alternatives, KPMG. "Canada has to present a clear value proposition to businesses in other areas. One example of this is the federal government's recent cuts to corporate income tax rates, which are among the lowest for a wide range of operations among countries surveyed."

For businesses operating in Canada, the other big change was the rising business costs in BC and Alberta due largely to the continued western economic boom. In 2006 the most costly Canadian cities surveyed were Vancouver, Toronto, and Ottawa; for 2008 Vancouver held on to the bottom position, but Calgary and Chilliwack, BC moved into the next two spots with Toronto following in fourth.

"What stands out in the 2008 survey is how strong Canada ranks globally in terms of the non-cost factors that were considered," said Glenn Mair, MMK Consulting, one of the study authors. Canada had top scores for business-friendly environmental regulation, educational outcomes, and housing affordability and ranked second for environmental performance, total employment levels, least trade restrictiveness, and energy self-sufficiency.

You can access more analysis and download the full report at www.competitivealternatives.com. For a summary of the cost-competitiveness rankings for the 10 countries included and between 17 Canadian cities, look below the fold.

Cost-Competitiveness: 2008 and 2006 Rankings by Country

COUNTRY                   RANK       2008         2006      Change in
                                 COST INDEX   COST INDEX   Cost Index
----------------------------------------------------------------------
Mexico                      1        79.5
----------------------------------------------------------------------
Canada                      2        99.4         94.5        -4.9
----------------------------------------------------------------------
United States               3       100.0        100.0
----------------------------------------------------------------------
Australia                   4       100.2         92.3        -7.9
----------------------------------------------------------------------
France                      5       103.6         95.6        -8.0
----------------------------------------------------------------------
United Kingdom              6       107.1         98.1        -9.0
----------------------------------------------------------------------
Netherlands                 7       107.3         95.7       -11.6
----------------------------------------------------------------------
Italy                       8       107.9         97.8       -10.1
----------------------------------------------------------------------
Japan                       9       114.3        106.9        -7.4
----------------------------------------------------------------------
Germany                    10       116.8        107.4        -9.4
----------------------------------------------------------------------
Business costs are expressed as an index, with the United States being
assigned the baseline index of 100.0
Source: KPMG's 2008 Competitive Alternatives Study

Comparison of Cost Indices Among Major Canadian Cities

CITY                             COST INDEX   COST INDEX   COST INDEX
                                    2008         2006       CHANGE
----------------------------------------------------------------------
Sherbrooke, QC                       92.8         90.1        +2.7
----------------------------------------------------------------------
Moncton, NB                          94.9         91.1        +3.8
----------------------------------------------------------------------
Fredericton, NB                      95.3         91.5        +3.8
----------------------------------------------------------------------
Charlottetown, PEI                   95.8         91.7        +4.1
----------------------------------------------------------------------
Quebec City, QC                      96.3         92.6        +3.7
----------------------------------------------------------------------
Halifax, NS                          96.6         92.2        +4.4
----------------------------------------------------------------------
Saskatoon, SK                        96.7         92.8        +3.9
----------------------------------------------------------------------
Winnipeg, MB                         97.7         94.1        +3.6
----------------------------------------------------------------------
Waterloo Region, ON                  98.2         94.3        +3.9
----------------------------------------------------------------------
Montreal, QC                         98.5         94.3        +4.2
----------------------------------------------------------------------
St. John's, NL                       99.5         94.3        +5.2
----------------------------------------------------------------------
Edmonton, AB                         99.9         93.3        +6.6
----------------------------------------------------------------------
Ottawa, ON                           99.9         95.1        +4.8
----------------------------------------------------------------------
Toronto, ON                         101.5         96.5        +5.0
----------------------------------------------------------------------
Chilliwack, BC                      101.6         94.0        +7.6
----------------------------------------------------------------------
Calgary, AB                         102.0         94.7        +7.3
----------------------------------------------------------------------
Vancouver, BC                       104.2         96.9        +7.3
----------------------------------------------------------------------
Business costs are expressed as an index, with the United States being
assigned the baseline index of 100.0
Source: KPMG's 2008 Competitive Alternatives Study

Posted by Kalim Kassam on March 28, 2008 in Trade | Permalink

TrackBack

TrackBack URL for this entry:
https://www.typepad.com/services/trackback/6a00d834515b5d69e200e551949f838834

Listed below are links to weblogs that reference Business getting costly in the West:

Comments

Business is getting costly everywhere. One of the reasons being inflation. Our (fiat) money is increasingly worthless. But we go on somehow believeing that central / fractional reserve banking can solve the problem by simply printing up more "paper". Its an assinine thing to believe in.

Posted by: JC | 2008-03-29 5:22:00 PM



The comments to this entry are closed.