Media Room - News Releases/Program Announcements

News Releases/Program Announcements - Details

May 27, 2010

CANADA RANKS 2^ND IN BEST PLACES TO INVEST DUE TO LOW CORPORATE TAXES
Canada-US exchange rates, corporate tax cuts, eased the way

Canada's cost competitiveness as a business location has not been adversely affected by the lingering effects of the recession in the United States, according to KPMG's Competitive Alternatives 2010 study, which compares business costs in 10 countries in North America, Europe, and Asia Pacific. The results show that Canada now holds a 5 percent business cost advantage over the United States - an improvement over the virtual break-even position reported in the previous edition of the biennial study, last released in 2008.

The slight easing in the Canada-US exchange rate over the last 2 years has helped Canadian competitiveness. A variety of tax cuts and reforms that have been implemented, or are in the process of being implemented, by both the federal and provincial governments, are also assisting the cost competitiveness of Canada for global business. Indeed, business taxes are now lower in Canada than in any of the other G7 countries.

Competitive Alternatives examines business competitiveness in 112 cities in Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, the United Kingdom, and the United States. The study measures 26 significant cost components that are most likely to vary by location, including labour, taxes, real estate, and utilities, as they apply to 17 business operations over a 10-year planning horizon, as well as a range of non-cost competitiveness factors.

Ontario - The Hub of Canadian Business

With the greatest population concentration, close proximity to the massive US market and diverse industrial strengths, Ontario has quickly become the engine of the Canadian economy and a leading factor in Canada's business success and cost competitiveness.

Ontario is committed to supporting businesses by maintaining low corporate income taxes and offering generous incentives for business growth and success. For example, in 2009, the Ontario government proposed $4.5 billion in tax cuts over three years for businesses. Once fully implemented, the comprehensive tax reform package would cut Ontario's marginal effective tax rate on new business investment in half, making Ontario one of the most competitive jurisdictions in the industrialized world for new investment.

Ontario also supports businesses by

supporting job skills development,
leading in the development of clean energy technologies, and
continuing to be among the world's most innovative and stable markets in which to invest.

Business Environment

In 2009, the Ontario government proposed $4.5 billion in tax cuts over three years for businesses - Once fully implemented, the comprehensive tax reform package would cut Ontario's marginal effective tax rate on new business investment in half, making Ontario one of the most competitive jurisdictions in the industrialized world for new investment.
Home to almost 40% of all head offices and 59% of foreign-controlled head offices in Canada
Entrepreneurs and investors can get businesses started fast - it takes on average only one simple step to start a business, compared to as many as 20 needed in other industrialized countries
Producer of 48% of total national manufacturing shipments and 42% of goods exports
Telecommunications and transportation infrastructure provides seamless international links
Canada's banking system has been recognized as the world's healthiest and soundest - Ontario is the heart of that system

Workforce

Canada's most populous province, with over 38% of the country's population of over 33 million
Home to 39 of Canada's Top 100 corporate R&D spenders
Home to people with more than 200 different ethnic backgrounds who speak over 100 languages
Overall, 59% of Ontarians aged 25-64 have completed post-secondary education, the highest percentage in the OECD/G7
Home to 20 universities and 24 colleges of applied arts and technology, generating a steady supply of new graduates
Provides nearly 40% of Canada's total employment

Ontario in the 21st Century is globally recognized for its leading edge technology industries and fast growing business services, finance, tourism and cultural sectors. Six of the world's largest automotive companies have production facilities here. So do nearly all the global biotech giants and international leaders in chemicals, IT, aerospace and financial services creating a broad industrial base which has the stability to ride out global economic cycles.

These factors and more are why Ontario has emerged as an efficient North American hub for international business.

For more details on Canada's ranking in the Competitive Alternatives 2010 report, please visit
Canada Gains Business Cost Advantage over the US – KPMG

To access the full Competitive Alternatives 2010 report, please visit
www.competitivealternatives.com