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

Vancouver leads the pack as the most cost competitive for business on the West Coast 

Vancouver, March 22, 2012 – Vancouver ranks ahead of its West coast counterparts in terms of business cost competiveness according to the KPMG Competitive Alternatives 2012 study released today. Ranked on business costs in the 30 largest metro areas in Canada and the United States, Vancouver (7th) ranks well ahead of the US West Coast cities of Seattle (28th), Portland (22nd), San Francisco (30th), Los Angeles (26th), Riverside-San Bernardino (18th), and San Diego (25th).

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.

 

Vancouver comes out on top in terms of business competitiveness among West-coast cities, in part due to its strong cost results in the manufacturing industries with significant export orientation, thanks to the global access provided by Canada's largest port. The study also found that Vancouver ranks well in the green energy manufacturing industry, a timely and relevant result given Vancouver's cluster of companies focused on fuel cell technology.

 

"While the study found that Vancouver is a more expensive location to run a business compared to other Canadian cities, mainly due to its high real estate costs and higher-than-average labour costs, the city is very competitive for businesses that are looking for a gateway to the East. Its West Coast location, developed infrastructure and skilled workforce can offset or even save on some of the other costs of doing business in the city," said Jonathan Kallner, Managing Partner, Greater Vancouver Area with KPMG in Canada. "Metro Vancouver businesses also benefit from low utility costs, making Vancouver that little bit more attractive to businesses thinking about setting-up shop in the region."

 

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.
  • 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.

 

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

 

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