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Appendix: Business Costs

Summary of results from the KPMG Competitive Alternatives Report (2010)

KPMG's Competitive Alternatives report (2010) is a comprehensive guide for comparing business costs internationally. It is a follow-up to a 2008 KPMG study that measured the combined impact of 26 business cost components.

The eight month research project surveyed 112 cities throughout Australia, Canada, France, Italy, Germany, Japan, Mexico, the Netherlands, the UK and the US. More than 2,000 individual business scenarios were examined and over 50,000 items of data were analyzed.

After-tax cost of startup and operation for 17 specific types of businesses over a 10 year period was used as the basis for comparison. The report shows combined results for a group of comparable cities in each country.

Toronto: A Leader Among Large International Cities

KPMG's Competitive Alternatives report (2010) ranks Toronto sixth in business cost competitiveness relative to 41 other large international metropolitan regions with a population of at least 2 million people, and third compared to other larger centres in Canada and the United States. The report also found that Toronto has lower overall business costs than all 22 large US cities in the study. Overall, the City improved its ranking in North America, up from fourth place in 2008.

Labour Costs

Canada's labour costs are among the lowest in the Western world. More specifically, Toronto's labour costs were lower than all but one of the major global cities in the KPMG Competitive Alternatives report (2010).

With one of the most educated workforces in the G8 and an enviable level of cost competitiveness, the value offered by Toronto's labour market is significant. The charts below compare the overall cost of labour across each of the 10 countries studied in the report, as well as Toronto's overall labour costs compared to other major business centres.

Overall Cost of Labour: Country-Level Benchmark
Overall Cost of Labour: City-Level Benchmark

Real Estate Costs

Toronto provides businesses with highly competitive industrial and office facilities costs. The chart below shows that Toronto's facility costs are highly competitive relative to other major business centres in each of the countries studied in KPMG's report.

Additionally, for businesses interested in developing facilities rather than leasing them, the City offers qualified projects significant tax benefits through Imagination, Manufacturing, Innovation, Technology (IMIT) grants.

Overall Cost of Facilities: City Level Benchmark

Utility Costs

Toronto's utility costs are among the lowest in the industrialized world. Again, looking at the chart below, and comparing it against the same group of global cities, Toronto ranks as having the lowest overall utility costs relative to a major city in each of the countries included in the KPMG report.

Overall Cost of Utilities: City Level Benchmark

Corporate Taxes

Since the majority of business taxes are not assessed on a city level, the total taxes paid by a business are compared on a country-to-country basis in KPMG's report.

In preparing this section of the report, KPMG made use of a metric called the Total Tax Index (TTI). The TTI avoids the potentially misleading comparison of corporate tax rates alone and instead includes all the taxes to which businesses are exposed, (including income tax, payroll tax, capital tax, sales tax, property taxes, etc). In other words, the TTI is the same as the total effective tax rate.

As shown in the chart below, when compared to the other countries in the report, Canada's total taxes ranked lower than all industrialized countries.

Total Tax Index: City Level Benchmark

For specific business costs, (including wages, utilities, loan rates, facilities leases and taxes), please visit the Business Environment section of the website.