Saskatoon among the most cost competitive in Western Canada
Saskatoon, March 22, 2012—Saskatoon ranks ahead of many of its Midwest US and Western Canada counterparts in terms of business cost competiveness according to the KPMG Competitive Alternatives 2012 study released today. Saskatoon ranks fourth for lowest business costs among all 25 cities examined in the Midwest US/Western Canada region, ranking behind Winnipeg, Sioux Falls (SD), and Cheyenne (WY) but edging out Wichita in Kansas and Billings in Montana, as well as Canadian cities such as Edmonton and Calgary.
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 Montréal and Halifax among others. On a national basis, Saskatoon ranks tenth among the 16 featured Canadian cities surveyed. Saskatoon’s high facility costs for industrial leasing (the most expensive in Canada) and office leasing (third most expensive in Canada) add to the total costs for businesses in the city and its middle-of the pack ranking within Canada.
“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 low property tax costs for those in Saskatoon,” said Scott Verity, Office Managing Partner with KPMG in Saskatoon. “While facility costs in Saskatoon are currently high by national standards, that is a reflection of the relatively strong economic conditions and high demand for commercial and industrial space that Saskatoon has experienced in recent years.”
• 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 Scott Verity. “Despite Canada’s sluggish productivity rates, our cost position relative to the US 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.”
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