When agriculture minister Lyle Vanclief traveled to Europe last week, beating the bushes for investment back home, he had a powerful persuader in his hands.
A comparison of business costs in Canada and six other industrialized countries shows Canada is the most cost-effective place to locate a business.
It has lower start-up and operations costs than Sweden, the United Kingdom, the United States, Italy, France and Germany, according to a study completed by KPMG Consultants.
For food processing plants, Canada overall holds a 3.8 percent advantage over average U.S. sites and more than a nine percent advantage over average sites in Germany.
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Factors ranging from labor rates and currency values to interest rates, land taxes and prices were considered.
Out of 41 cities evaluated in the seven countries, Saskatoon ranked fifth cheapest for food processor investors, Edmonton was sixth, Winnipeg was eighth and Calgary 10th.
Vanclief took those numbers and that message to Europe last week when he visited a food fair in Cologne, Germany and met with potential investors.
He noted the gap in costs between Canada and Germany. Using a U.S. base of 100, Canada’s rated 96.2 while Germany was the most costly at 103.9.
“If you are starting a food processing business in Canada that would employ around 100 people and had sales of about $10 million a year, that would be a $1 million a year advantage to doing business in Canada,” Vanclief told a news conference. “That turned some heads when they heard those figures.”
When he released copies of the KPMG study, funded by the Royal Bank of Canada and Ontario Hydro, trade minister Sergio Marchi said it was a message Canadian government and business should get out to the world.
“These results clearly show that, on the basis of cost, Canada is the number one location for investors compared to the U.S. and Europe,” he said. “We have a powerful message to send about Canada’s attractiveness as the most cost-competitive base from which to serve the NAFTA market.”
The study said Canada offers low land costs, low inflation, a weak currency relative to the U.S. dollar, limited demands on companies to pay health and welfare costs for their employees, low business taxes, competitive labor costs and worker productivity.
