Canada - English

Details

  • Type: Press release
  • Date: 3/22/2012

Montréal leads the pack as the city with the lowest business costs among North America’s 

Montréal, March 22, 2012— Montréal is ranked in the top spot as the city with the lowest business costs in any of the 30 largest metro areas (all with populations of 2 million or more) in Canada and the United States, according to KPMG’s Competitive Alternatives 2012 study  released today. Among the 30 large cities surveyed in the study, Montréal ranked higher than Toronto (2nd place), Cincinnati (3rd), Vancouver (7th), Chicago (21st), Philadelphia (23rd), Boston (27th), and New York City (29th).

The KPMG study examines 26 significant 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.

 

Globally, Montréal ranks 10th overall for cost competitiveness among all 103 cities in mature markets surveyed and 7th overall in Canada. Also included in the study was Québec City, which ranks 6th among 16 featured Canadian cities, and Trois-Rivières which ranks 4th in Canada for business cost competitiveness.

 

"Montréal's relatively low transportation costs, and moderately low industrial leasing and electricity costs makes it an attractive location for many businesses," said Denis Lacroix, Partner, International Tax, KPMG in Canada. "In addition, the range of incentives that local businesses can leverage for R&D - e-commerce, digital media production, international financial activities, and manufacturing, -gives the city an important advantage over other locations and results in low corporate tax costs."

 

Relative to other Canadian cities in terms of business cost competiveness by sector, Montréal performs well in manufacturing and video game production (ranking sixth and seventh respectively among 16 featured Canadian cities). Video game production is also Montréal's strongest industry relative to all international cities (ranking seventh among 103 cities featured in nine mature-market countries).

 

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. Its low labour and tax costs help Moncton's ranking.
  • Toronto ranks 12th among the 16 featured Canadian cities, five places behind Montréal. 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, seven places behind Montréal. Vancouver has the highest office leasing costs among the 16 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
KPMG in Canada
(416) 777-3447
kkillen@kpmg.ca

 

Share this

 

Follow us