Tax Cuts Position Fredericton as a North American Leader

Atlantic Canada is emerging from the recession of 2009 in an improved competitive position for businesses and even the lingering effects of the recession in the U.S. haven’t prevented Atlantic Canada and Fredericton from growing their business cost advantages over New England during the last two years. That’s the conclusion of KPMG’s Competitive Alternatives 2010 study, which compares business costs in 10 countries in North America, Europe and Asia Pacific. As the cost leaders in Atlantic Canada, Fredericton and Moncton have grown their relative business cost advantages, compared to both the U.S. and other cities in Atlantic Canada.

Competitive Alternatives examines business competitiveness in 112 cities in Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, the United Kingdom, and the United States. The study measures 26 significant cost components that are most likely to vary by location, including labour, taxes, real estate, and utilities, as they apply to 17 business operations over a 10-year planning horizon, as well as a range of non-cost competitiveness factors.

The business cost results for the major cities in Atlantic Canada are as follows (reported as a percentage cost index relative to the U.S. baseline of 100.0): Moncton, 91.3; Fredericton, 91.8; Halifax, 93.3; Charlottetown and St. John’s, both 93.8. Therefore, these cities have business costs between 8.7 and 6.2 percent (respectively) below the U.S. baseline, and all offer business costs below any of the 60 U.S. cities examined. In comparison, the lowest cost cities examined in New England were Bangor, Maine (95.6) and Burlington, Vermont (97.7).

“Cities in Atlantic Canada offer businesses a variety of cost and non-cost advantages—low operating costs, competitive corporate tax rates, availability of labour, high-quality educational institutions and excellent housing affordability,” says Gregory Simpson, office managing partner, KPMG’s Halifax office.

For the entire story, visit http://www.dailybusinessbuzz.ca/2010/03/31/nb-tax-cuts-consolidate-moncton-fredericton-as-cost-leaders/