By: Steven Moore, Partner Taxation Services - Nova Scotia, KPMG in Canada
When it comes to the cost of doing business, Halifax is one of the top-ranked major cities among mature markets around the world.
This finding comes from the 2016 Competitive Alternatives study, conducted every two years by professional services firm KPMG. The study compares 26 business costs including labour, real estate, transportation and utilities, as well as other competitiveness factors such as taxes and incentives. Rankings are established among 111 cities in North America, Europe, Japan and Australia.
Halifax placed a solid eighth among all 111 international cities studied, and sixth among the 17 Canadian cities, which tended to be clustered around the top. Although Monterrey and Mexico City ranked ahead of Halifax and all other Canadian cities, Mexico was the only country in the study considered to have the cost advantages of an emerging market economy.
Substantial gain in competitiveness
Each city’s costs are compared to a U.S. baseline that reflects average business costs for the four largest U.S. cities: New York, Los Angeles, Chicago and Dallas-Fort Worth. Since the last edition of the study was published in 2014, Halifax’s cost advantage compared to the U.S. baseline expanded from 8.4 per cent to 15.5 per cent across all sectors. This substantial gain in competitiveness is mainly due to the low current value of the Canadian dollar versus the U.S. dollar.
However, Halifax has also remained very wage competitive and has some of the lowest overall labour costs in Canada. Halifax also ranked sixth among Canadian cities for industrial land costs. In a New England/Atlantic Canada regional view, Halifax ranked fourth behind all other Canadian centres except St. John’s NL, but well ahead of US cities such as Boston, Hartford and Providence.
Canada a perennial top performer
Among the 10 countries in the 2016 study, Canada finished second only to Mexico. While Canada’s cost competitiveness has a lot to do with the surging value of the U.S. dollar, our country continues to be more competitive than others with depressed currencies such as Australia, France, Germany and Italy.
Canada is a perennial top performer in this study. In the 2016 edition, Canada ranked second in all four sectors examined: digital services, R&D services, corporate services and manufacturing. Halifax posted its best results in the corporate services sector, but performed almost as well in the R&D services sector. In manufacturing, Halifax is most competitive for pharmaceuticals, medical devices and telecom equipment. Such strengths are helping to make Halifax highly competitive in the race to attract new and relocating global businesses.