Cost Competitiveness

Business costs are lower in Ontario East. Consider our:

Real Examples

Consider our food processing industry. It yields as much as 2% more ROI than Toronto and as much as 4.5% more ROI than Chicago (KPMG Competitive Alternatives, March 2006). This reflects lower industrial plant operating costs—30% lower than some high-cost U.S. locations and 10% lower, on average, than competing Ontario food processing clusters. But there are other factors to consider. Food processors here have significant tariff advantages when using sugar and preferred pricing on market-regulated inputs used in exports.

Our call center and back office companies have labour and benefit costs that are 3% to 8% lower than other Ontario regions, 1% lower than the Canadian average and 8% lower than the U.S. average.

Pay rates

According to KPMG, average pay rates for production workers are as much as 20% lower, here, than in Toronto. Labour and benefits costs for production workers are 15% to 20% less. Average turnover and absenteeism rates are low—and workers here are regarded as both loyal and productive.

Wage and training programs

Behind our well educated and trained workers stand generous wage and training programs, such as those worth up to $5,000 a year for apprentice Business Process Outsourcing workers.

Lower operating costs

With lower labour and facilities costs, Ontario East offers a low overall cost of operation. KPMG has calculated operating costs in Toronto to be 12.3% higher than those of Ontario East. Those of Montréal can be 8.9% higher.

Lower start-up capital cost

The start-up capital cost here is a fraction of that of most urban centers—it’s one-fifth of that of the Greater Toronto Area. The cost of serviced industrially zoned land ranges from $10,000 an acre to $110,000 an acre, averaging $30,000 an acre. Average office lease rates here are one-third less than Canadian and U.S. averages—about CDN$13 gross per square foot.

Low telecom costs

Canada’s telecom costs are the lowest of 10 leading OECD countries. With other Canadians we pay low prices for Internet access, significantly less than our U.S. counterparts for broadband Internet., and lower fixed telephone charges.

Low taxes, generous R&D tax credits—plus health care coverage

The combined federal/provincial corporate income tax rate in Ontario is 4% lower than the average U.S. rate for manufacturers. Canadian and Ontario R&D tax credits are among the most generous in the world, reducing the after-tax cost of $100 of R&D expenditures to about $42. And Ontario employers pay one-sixth of the amount paid by U.S. employers for health care, thanks to our universal health care coverage.