Canadian Manufacturing

KPMG ranks Canada 2nd in cost competitiveness

The study, which ranked countries and cities in terms of costs and taxes, said the low Canadian dollar has been "a driver in improving Canada's competitiveness"

March 30, 2016   by The Canadian Press

TORONTO—Accounting giant KPMG says Canada has proven to be second most competitive market in a comparison test of 10 leading industrial countries.

In its report, KPMG says Canada lags only behind Mexico when it comes to how little businesses have to pay for labour, facilities, transportation and taxes.

The report, which compared the competitiveness of a number of western countries along with Australia and Japan, found that a high U.S. dollar has helped Canada stay affordable despite rising office real estate costs and lower federal tax credits.

When it comes to corporate income taxes, it found that Canada, the U.K. and the Netherlands had the lowest rates overall due to tax incentives to support high-tech and research and development.


KPMG also looked at the competitiveness of more than 100 cities worldwide. It ranked Fredericton, N.B., as the most cost-effective city in Canada due to low labour costs and continued low costs for property leases.

Montreal was near the top of the list among 34 major cities in North America, followed by Toronto and Vancouver. The three Canadian cities beat out all U.S. cities.

Although there have been concerns over the impact of a weakening loonie on the economy, having a low Canadian dollar has actually been “a driver in improving Canada’s competitiveness and overall cost advantage,” KPMG said.

As a result, that has made it more attractive for businesses to set up shop north of the border than in the U.S., it said.

KPMG’s 10 most cost competitive countries are:

1. Mexico

2. Canada

3. The Netherlands

4. Italy

5. Australia

6. France

7. United Kingdom

8. Germany

9. Japan

10. United States

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