NCPA - National Center for Policy Analysis

It's Cheaper to do Business in Canada

March 12, 1999

In a survey of eight major industrial countries, the KPMG consulting firm found that Canada has the lowest business costs. Setting up a business there and running it for 10 years was 7.8 percent cheaper than in the United States.

Here are some of the study's other conclusions:

  • Among the eight major industrial countries surveyed, Britain and the U.S. had the next lowest costs.
  • Japan and Germany have the highest costs.
  • Austria, France and Italy were ranked in the middle.
  • Demonstrating that Canada's cost advantage is particularly pronounced in high technology, KPMG said that operating a 110-employee software firm there, instead of in the U.S., would save the average company about $1.6 million a year.

Canada's advantage was partially attributed to the low value of its dollar relative to the currencies of other countries. The survey also found that contrary to a widespread view, the tax burden on companies is somewhat lighter in Canada than in the U.S.

The survey didn't address personal income taxes -- which are comparatively high in Canada.

Source: John Urquhart, "Canada Has the Lowest Business Costs of 8 Industrial Countries, Survey Says," Wall Street Journal, March 12, 1999.


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