Business costs are lower in Ontario East
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 in Ontari East is a fraction of that in most urban centres—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 taxes, generous R&D tax credits—plus exceptional 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. Our universal health care coverage means Ontario employers pay one-sixth of the amount paid by U.S. employers for health care.
Pay rates
According to KPMG, average pay rates for production workers ni Ontario East are as much as 20% lower 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.
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 broad band Internet, and we have lower fixed telephone charges.
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.
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 in Ontario East—30% lower than some high-cost U.S. locations and 10% lower, on average, than competing Ontario food processing clusters. But there are also other factors to consider. Food processors here have significant tariff advan
tages when using sugar and preferred pricing on market-regulated inputs used in exports.
Our call centre 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.
Our logistics companies capitalize on lower labour and facilities costs, and capital costs are estimated to be 20% of those of the Greater Toronto Area. The turnover rate of Ontario truckers is just 15%, significantly less than those of the United States.