Comparison of Business Costs for Northern Ontario Cities · 1 Introduction and methodology...

COMPARISON OF BUSINESS COSTS

FOR NORTHERN ONTARIO CITIES

Prepared for:

Prepared by:

City of North Bay Economic Development

Sault Ste. Marie Economic Development Corporation

Thunder Bay Community Economic Development Corporation

Timmins Economic Development Corporation

MMK Consulting Inc.

Glenn Mair

Treena Cook

December 8, 2014

Contents

Introduction and methodology........................................ 1

Introduction and objective 1

Study scope 2

Methodology 5

Cost comparison results................................................... 7

Overall results 7

Comparison of selected jurisdictions 8

Results by major sector 9

Results by industry 11

Comparison by cost component .................................... 12

Significance of cost factors 12

Labour costs 13

Facility costs 14

Transportation costs 15

Utilities 17

Financing costs 18

Taxes other than income 18

Income tax 21

Appendix A – Detailed Comparisons ....................................... 23

1

Introduction and methodology

Introduction and objective

In March of 2014, KPMG released a major study, Competitive Alternatives, KPMG’s Guide to International Business

Location Costs1. That study compared the cost of doing business in more than 100 cities in ten countries,

including Canada and the United States. The range of cities included in the Competitive Alternatives 2014 study

included Toronto and Sudbury in Ontario, along with 30 other Canadian cities and 74 cities in the US.

The municipalities of North Bay, Sault Ste. Marie, Thunder Bay, and Timmins (collectively the “Municipalities”)

did not participate as part of the main, published Competitive Alternatives 2014 study. However, the

Municipalities now wish to have their communities added to the established comparative analysis, to obtain a

better understanding of the costs of doing business in their respective cities relative to other cities regionally,

nationally, and cross-border in the US.

The objective of this report is to provide the Municipalities with an overview of the cost competitiveness of their

cities within the province of Ontario, and in comparison to other selected cities in Canada and the United States.

This report provides:

� An overall business cost index for each municipality

� Specific cost indices for the four sectors and subsectors analyzed in the Competitive Alternatives report

(digital services, R&D, corporate services and manufacturing)

� Specific cost indices for each of the 19 individual industry-specific model business operations that

underlie the analysis

� An analysis and comparison of specific business cost factors that both underlie and help explain the results for the industries and sectors compared.

Many different approaches exist to assessing the cost of doing business in any given city. This study utilizes both

analytical approaches and major data sources similar to those that are often used in corporate site selection

projects. Thus, this study presents a comparison of business costs as they may be perceived by a mid-to-large

sized company (and/or its advisors) undertaking a site selection study across the range of jurisdictions included

in this analysis.

While great care has been taken in performing this analysis and developing the findings, the comparisons

presented are of a general nature and should not be interpreted as a definitive or final opinion on the merits of

locating any specific facility in one jurisdiction over another.

This report has been prepared for the exclusive use of the municipalities of North Bay, Sault Ste. Marie, Thunder

Bay, and Timmins. Each municipality has agreed that this report will represent a confidential report to the

collective group of Municipalities. MMK Consulting does not take any responsibility for any distribution of this

report to third parties by any of the Municipalities.

1 MMK Consulting manages many aspects of the Competitive Alternatives study on behalf of KPMG.

2

Study scope

Business costs in context

Selecting the best site for a business operation requires careful consideration of a wide range of factors,

including business costs, the business environment, cost of living, and quality of life.

The following table illustrates some of the major factors that can influence the site location decisions. However,

the relative importance of each of these site location factors, along with others not shown in this table, will vary

among different industries, and even among individual firms within particular industries.

For many firms, a logical first step in locating or relocating a business operation is to perform a high-level scan

of which jurisdictions represent cost-competitive locations, as represented by the top left quadrant of the table.

This study is designed to address this issue of relative business costs.

Comparison cities

The comparisons presented in this report reflect new research for four cities in northern Ontario—North Bay,

Sault Ste. Marie, Timmins, and Thunder Bay. For purposes of comparison, results for these cities are shown

relative to 10 other cities selected from among the 131 cities included in Competitive Alternatives 2014:

� Other Ontario cities: Sudbury, Toronto, Chatham-Kent

� Other Canadian cities: Moncton (NB), Montreal (QC), Winnipeg (MB), and Vancouver (BC)

� US regional cities: Cedar Rapids (IA), Minneapolis (MN), and Saginaw (MI).

3

The analysis is based on the greater metropolitan area of each of the 14 cities. This approach allows for a

realistic comparison between locations, recognizing that many business facilities choose to locate in suburban

or urban-fringe areas of large metro areas.

Sectors and industries

This study compares seven different business-to-business (B2B) service sector operations and 12 different

manufacturing operations, as detailed in the following table. The 19 individual business operations have been

chosen to reflect industries that are regularly seen making site selection decisions through the assessment of

multiple jurisdictions.

Each of the business operations examined reflects a representative, industry-specific business that has been

defined in detail and modeled to analyze its pro forma operating costs in each of the study locations. The 19

business operations cover a wide range of operating requirements, including labor, facility, and capital

requirements. Results for all 19 business operations are presented in Chapter 2.

4

The hierarchy of sector and industry analysis for Competitive Alternatives is illustrated below. This hierarchy

helps to illustrate the relationships between the overall results, sector results, and industry-specific business

cost results presented in this report.

The overall results for all cities and countries represent the top level of the analysis hierarchy and incorporate

business modeling outcomes from both the services sector and the manufacturing sector. Those results are

ultimately based on the analysis of 19 individual industry-specific business operations, as shown in the bottom

(red) level of the analysis hierarchy. Sectors and subsectors form the middle (green) level of the analysis

hierarchy, connecting and combining results for reasonably similar types of business operation. The Competitive

Alternatives study, and this report, highlight results for four key sectors and subsectors—digital services, R&D,

corporate services, and manufacturing.

Cost factors

This study analyzes the same range of 26 location-sensitive cost factors as were included in the Competitive

Alternatives 2014 study, as detailed in the following table (overleaf). These major location-sensitive cost factors

generally represent between 35 and 90 percent of total operating costs for the specific business operations

examined in this study.

Some significant costs (major plant and equipment; commodity raw materials, parts, and subcomponents for

the manufacturing process) tend to be governed by world market prices or are fixed at other levels of the supply

chain, and do not vary substantially by location. These fixed costs are more substantial for manufacturing

operations than for service operations, and are held constant (in US dollars) for comparison purposes. A number

of less significant cost factors, such as advertising, accounting services, and office supplies, may be location-

sensitive, but do not have a material impact on the overall comparison and are not examined in this study.

5

Except as noted below (re exchange rates) and on Page 6, all cost data used in this study are current as of the

last quarter of 2013, which was the effective date for all data and analysis contained in the published

Competitive Alternatives 2014 study.

Methodology

This study is based on the same methodology as the KPMG Competitive Alternatives study. Key methodological

aspects of the Competitive Alternatives study relevant to this report are summarized as follows.

Determination of US baseline index

The four largest US cities by population—New York, Los Angeles, Chicago, and Dallas Fort Worth—are used to

calculate the US national results and form the baseline index of 100.0 against which business costs in other

cities are compared. Due to the generally lower business costs seen in Canada and in smaller cities in general, all

cities examined in this report show business costs below the US baseline of 100.0.

Exchange rates

All figures in this report are expressed in US dollars unless otherwise stated. Canadian dollar amounts have been

converted to US dollars at an exchange rate of US$1.00 = Cdn$1.09 (Cdn$1 = US$0.9174). This exchange rate

represents the current default Canada-US exchange rate in the Competitive Alternatives Cost Model, and reflects

the average Canada-US exchange rate from the second quarter of 2014.

We note that the Canadian dollar has been trading at values lower than US$0.9174 since late-September 2014.

Cost advantages for all Canadian cities relative to all US cities would be marginally higher if study results were

recalculated using December 2014 exchange rates.

6

Consistency with the published Competitive Alternatives 2014 study

For the 10 comparison cities previously included in the published Competitive Alternatives 2014 study (as

identified on Page 2), the index results presented in this report differ from those published in the Competitive

Alternatives 2014 report. These variations are due to the fact that the Competitive Alternatives Cost Model is

updated semi-annually for exchange rate changes and major tax changes at the national and provincial/state

levels. These updates can impact both:

� The costs for specific cities being studied (e.g. Toronto or Winnipeg), thus changing the results of a city relative to the US baseline; and/or

� Costs for cities included in the calculation of the US baseline index (refer Page 5), thus impacting the

relative index results for all cities.

The analysis in this report reflects more recent data than used in the published Competitive Alternatives 2014

study and therefore results presented herein cannot be compared to those in the Competitive Alternatives 2014

report. However, current and valid comparisons between the northern Ontario municipalities and additional

cities included in the Competitive Alternatives 2014 study can be made using the online Competitive Alternatives

Cost Model. Access to the Competitive Alternatives Cost Model has been provided to the Municipalities in

conjunction with delivery of this report.

Incentives

Significant, generally-accessible incentives, with clearly defined eligibility criteria, are included in the scope of

this study. These incentives include certain tax rate reductions, tax abatements, sales tax exemptions, favorable

interstate income apportionment rules, investment tax credits, research and development incentives, and job

tax credits available in various jurisdictions.

For major business investments, it is not uncommon for governments to also offer incentive packages

negotiated on a discretionary basis. These packages typically comprise a complex set of financing assistance,

infrastructure support, and/or tax abatements tailored to specific investment and job creation proposals. The

analysis in this report does not distinguish among jurisdictions based on such discretionary incentives, because:

� There is generally no before-the-fact basis for forecasting the value of incentives any jurisdiction may ultimately provide, without entering into negotiations over a specific investment proposal

� The primary focus of the cost analysis is on the fundamental business cost structures that apply to typical business operations within each jurisdiction.

Interpretation of results

Further information about the Competitive Alternatives study methodology can be obtained from the study

report and appendices (Volume II Report), available for download at: www.CompetitiveAlternatives.com.

While great care has been taken in performing this analysis and developing the findings, the resulting

comparisons are of a general nature. All factors examined in this study are subject to change over time due to

changes in local laws, regulations, and/or market conditions. The results of this study should not be interpreted

as a definitive or final opinion on the merits of locating any specific facility in one jurisdiction over another.

Further analysis is required to determine the preferred site for any specific facility or operation.

7

Cost comparison results

Overall results

The overall results, by city or country, represent the highest level of aggregation of business costs in this study,

combining the results for all industries and cost factors examined. Business costs in each city are estimated

based on the analysis of:

� Representative business operations for 19 industries—7 services and 12 manufacturing operations

� 26 individual location-sensitive cost components.

Total business costs in each location are expressed as a percentage index, with the baseline index of 100.0 being

assigned to the United States. Locations with business costs lower than the US baseline have a cost index less

than 100, while locations with business costs higher than the US base have a cost index greater than 100.

Rankings are based on ascending business costs, with lower cost cities ranking ahead of higher cost cities.

Overall results are illustrated below for the five northern Ontario cities—the four Municipalities new to the

analysis in this report, plus Sudbury which was included in the published Competitive Alternatives 2014 study.

All of the northern Ontario communities show business costs below the US baseline, ranging from 8.6 percent

below the US base in North Bay to 7.1 percent below the US base in Thunder Bay. The range of variation in total

business costs among the five cities is modest, at 1.5 percentage points, and overall business costs in Sudbury

and Timmins are virtually equivalent, with both cities scoring a cost index of 92.4 (7.6 percent below the US).

Overall Cost Index Results for Northern Ontario Cities, US = 100.01

1 Average of services and manufacturing sectors, based on 7 service operations and 12 manufacturing operations.

100.0

92.9

92.4

92.4

92.0

91.4

80 85 90 95 100

US Baseline

Thunder Bay

Timmins

Sudbury

Sault Ste. Marie

North Bay

8

Comparison of selected jurisdictions

The results for the northern Ontario cities are also compared to a wider range of cities across Canada and cross-

border in the US, as identified on Page 2. This broader comparison shows the northern Ontario cities to be

grouped in the middle of the pack among the comparison cities:

� Business costs in the northern Ontario cities are higher than in several relatively low-cost Canadian cities, such as Moncton, Chatham-Kent, Winnipeg, and Montreal. Average business costs in Montreal

and North Bay are virtually identical, separated by only 0.1 percentage point.

� Business costs in the northern Ontario cities are consistently lower than in Vancouver, and each of the US cities chosen for comparison, and are 7.1-8.6 percent below the US baseline.

� Average business costs in Toronto are virtually equivalent to both Sudbury and Timmins, with higher labour and facility costs in Toronto being offset by higher transportation and property tax costs in both

Sudbury and Timmins.

Overall Cost Index Results for Comparison Cities, US = 100.01

1 Average of services and manufacturing sectors, based on 7 service operations and 12 manufacturing operations.

100.0

98.2

96.1

94.0

93.5

92.9

92.4

92.4

92.4

92.0

91.4

91.3

91.0

90.4

89.1

80 85 90 95 100

US Baseline

Minneapolis, MN

Saginaw, MI

Cedar Rapids, IA

Vancouver, BC

Thunder Bay, ON

Toronto, ON

Timmins, ON

Sudbury, ON

Sault Ste. Marie, ON

North Bay, ON

Montreal, QC

Winnipeg, MB

Chatham-Kent, ON

Moncton, NB

9

Results by major sector

Comparative results for the northern Ontario cities and other comparison cities in each of four main sectors and

subsectors are illustrated on the following page. These results are summarized as follows:

� Results for the digital services subsector are based on the analysis of two representative business

operations—a software development firm and a video game production studio. Costs in this subsector

primarily reflect salary levels and benefit costs associated with hiring creative and technical IT

professionals.

The northern Ontario cities show their strongest results in this subsector, with all cities showing a

business cost advantage of over 20 percent relative to the US baseline. North Bay ranks second among

the 14 cities compared, and Chatham-Kent and Moncton are the only two cities to rank ahead of any of

the northern Ontario cities for low business costs. Within this subsector, Ontario’s Interactive Digital

Media Tax Credit provides a significant advantage to all Ontario cities and helps to explain why all of

the northern Ontario cities rank ahead of both Montreal and Winnipeg in this subsector.

� Results for the R&D services subsector are based on three representative operations—a biomedical

research firm, an electronic systems design/test facility, and a clinical trials management firm. Cost

differentials for R&D reflect differences in labor costs for scientific and technical employees, as well as

differences in the tax and incentive treatment of R&D costs.

The northern Ontario cities rank in fourth through eight place among the 14 cities compared, with all

cities showing a business cost advantage of over 21 percent relative to the US baseline. Moncton,

Winnipeg and Chatham-Kent are the only cities to rank ahead of the northern Ontario cities for low

business costs in this subsector. These strong results for Moncton and Winnipeg are partially

attributable to the 15% fully refundable R&D tax credit available in New Brunswick and the 20%

partially refundable R&D credit available in Manitoba—providing both of these jurisdictions with an

advantage relative to Ontario’s 4.5% non-refundable R&D credit for medium and large companies.

� Results for the corporate services subsector are based on two representative operations—a shared

services center and an international financial services firm. Labor costs for both entry-level admin and

customer service employees, as well as finance professionals, are significant in this subsector.

Similar to the R&D subsector, the northern Ontario cities rank in fourth through eight place among the

14 cities compared, with all cities showing a business cost advantage of at least 19 percent relative to

the US baseline. Once again, Moncton, Winnipeg and Chatham-Kent are the only cities to rank ahead of

the northern Ontario cities. Within northern Ontario, business costs are lowest in North Bay (consistent

with the other three sectors and subsectors) and highest in Sault Ste. Marie (consistent with the R&D

subsector), although less than one percentage point separates the cost results of the five cities.

� Results for the manufacturing sector are based on 12 industry-specific operations, as listed on Page 3.

For manufacturing firms, costs for globally sourced machinery, materials, parts, and subcomponents

are similar by location, resulting in lower cost differences among locations in this sector.

Results for the northern Ontario cities are less favorable in this sector, with North Bay ranking sixth

among the 14 cities and Thunder Bay ranking 12th. Transportation costs for moving products to market

are a significant factor for many types of manufacturers, and represent a weakness for the northern

Ontario cities due to their geographic location. This causes major population and transportation hubs

such as Montreal and Toronto to rank ahead of the northern Ontario cities in this sector.

10

Results by Sector, US = 100.0

100.0

96.0

93.9

90.8

85.4

82.0

81.2

80.0

79.5

79.4

79.4

79.0

78.9

78.7

78.5

70.0 75.0 80.0 85.0 90.0 95.0 100.0

US Baseline

Minneapolis, MN

Saginaw, MI

Cedar Rapids, IA

Vancouver, BC

Toronto, ON

Winnipeg, MB

Montreal, QC

Thunder Bay, ON


Sudbury, ON

Timmins, ON

Moncton, NB

North Bay, ON

Chatham-Kent, ON

Digital Services Average

100.0

93.4

88.4

84.4

84.3

83.9

80.4

78.9

78.4

78.3

77.8

77.2

76.3

73.5

70.7

70.0 75.0 80.0 85.0 90.0 95.0 100.0

US Baseline

Minneapolis, MN

Saginaw, MI

Toronto, ON

Cedar Rapids, IA

Vancouver, BC

Montreal, QC


Sudbury, ON

Thunder Bay, ON

Timmins, ON

North Bay, ON

Chatham-Kent, ON

Winnipeg, MB

Moncton, NB

Research & Development Average

100.0

93.3

87.9

87.0

85.4

83.9

83.1

81.0

80.7

80.6

80.5

80.2

79.7

79.3

74.5

70.0 75.0 80.0 85.0 90.0 95.0 100.0

US Baseline

Minneapolis, MN

Saginaw, MI

Toronto, ON

Vancouver, BC

Cedar Rapids, IA

Montreal, QC


Sudbury, ON

Thunder Bay, ON

Timmins, ON

North Bay, ON

Chatham-Kent, ON

Winnipeg, MB

Moncton, NB

Corporate Services Average

100.0

99.8

98.4

98.3

97.8

97.6

97.1

97.0

96.9

96.6

96.2

95.7

95.4

95.4

94.9

70.0 75.0 80.0 85.0 90.0 95.0 100.0

US Baseline

Minneapolis, MN

Saginaw, MI

Thunder Bay, ON

Timmins, ON

Sudbury, ON

Cedar Rapids, IA


Vancouver, BC

North Bay, ON

Winnipeg, MB

Toronto, ON

Montreal, QC

Chatham-Kent, ON

Moncton, NB

Manufacturing Sector Average

11

Results by industry

Index results for all comparison cities for each of the 19 business operations examined in this study are detailed below. Further results for each city, by

cost component, as well as results for other Competitive Alternatives study cities are available online using the Competitive Alternatives Cost Model.

Results by Industry Operation, US = 100.0

Manufacturing Research &

Development

Digital

Services

Corporate

Services

Adv.

Battery Aircraft Auto

Electr-

onics Food

Medical

Dev Metal Pharma Plastics Precision

Spec.

Chemic Telecom Biomed

Clinical

Trials

Product

Testing Software

Video

Game

Int'l

Financial

Shared

Services

Northern Ontario

North Bay, ON 97.8 96.8 97.3 95.7 97.4 94.5 97.4 95.7 99.4 97.4 96.2 94.9 79.4 80.9 73.8 84.4 71.7 74.8 84.5

Sault Ste. Marie, ON 98.9 96.9 97.6 95.8 98.4 94.6 98.1 95.8 100.3 98.0 96.2 95.0 81.4 82.0 75.6 85.1 72.3 75.5 85.4

Sudbury, ON 99.1 97.8 98.4 96.8 98.3 95.8 99.0 96.6 101.2 98.0 96.8 95.7 80.7 81.9 75.0 85.2 72.2 75.2 85.1

Timmins, ON 99.7 97.8 98.5 96.7 99.1 95.7 99.4 96.6 101.8 98.3 96.7 95.5 80.1 81.4 74.4 84.7 72.0 75.0 85.0

Thunder Bay, ON 101.7 97.8 98.9 96.5 101.0 95.5 100.4 96.5 103.1 99.3 96.6 95.5 80.4 82.0 75.0 85.4 72.2 75.4 84.9

Other Jurisdictions

Cedar Rapids, IA 97.8 97.0 97.4 96.9 97.3 95.7 96.4 96.7 96.8 98.0 97.4 96.6 83.7 89.0 82.8 90.8 90.8 84.4 83.4

Chatham-Kent, ON 95.9 95.3 96.3 94.8 96.0 93.1 95.3 94.3 96.6 96.5 95.6 94.3 78.4 80.2 73.1 84.4 71.3 74.6 83.8

Minneapolis, MN 100.7 99.4 99.9 99.0 101.3 99.1 100.7 99.1 101.4 100.1 99.0 98.8 94.0 94.0 92.6 96.0 96.1 91.9 94.4

Moncton, NB 96.8 94.6 95.7 94.0 97.7 91.1 95.2 93.1 97.1 96.4 94.9 92.6 74.4 67.6 68.9 81.0 76.3 70.8 77.6

Montreal, QC 95.5 95.8 96.3 95.3 95.5 93.4 95.2 94.5 95.9 96.4 96.0 94.8 83.7 80.2 77.7 82.5 77.1 77.9 87.3

Saginaw, MI 98.7 98.5 98.3 98.1 98.6 97.8 98.0 98.4 98.4 99.1 98.6 98.3 87.5 93.4 87.1 93.6 94.2 87.6 88.1

Toronto, ON 95.8 95.7 96.5 95.2 96.0 94.0 95.6 95.0 96.6 96.7 96.2 95.0 87.7 86.2 81.0 88.2 74.5 82.5 90.7

Vancouver, BC 97.9 97.2 97.4 96.3 97.3 94.9 97.8 96.6 98.4 97.7 96.8 95.7 87.4 84.7 80.7 87.7 82.5 80.5 89.3

Winnipeg, MB 98.8 95.5 96.8 94.5 99.4 92.4 97.7 94.7 99.2 97.7 95.2 93.5 78.1 68.3 71.9 84.0 77.9 75.8 82.1

12

Comparison by cost component

Significance of cost factors

The significance of the location-sensitive cost factors examined in Competitive Alternatives 2014 (and in this

study) varies both by location and operation, with variations existing between the services sector and the

manufacturing sector. Cost percentages quoted in this chapter are from the Competitive Alternatives 2014 study.

Labor costs include wages and salaries, employer-paid statutory plans, and other employee benefits. Labor

costs represent the largest category of location-sensitive cost factors, ranging from 75 to 90 percent of location-

sensitive costs for the services operations examined, and from 44 to 60 percent for manufacturing operations.

Facility costs represent the next significant cost factor. For services operations, office lease costs represent

4 to 16 percent of total location-sensitive costs. For manufacturing operations, industrial lease costs range from

2 to 6 percent of location-sensitive costs.

Transportation costs are only assessed for manufacturing operations, reflecting the costs of moving finished

goods to markets and representing 7 to 24 percent of total location-sensitive costs for those operations.

Utility costs represent 1 to 8 percent of location-sensitive costs. Electricity and natural gas costs are more

significant for manufacturers than for non-manufacturers.

Costs of capital include both depreciation and interest. These are major cost items for manufacturers, ranging

from 9 to 21 percent of location-sensitive costs. Capital-related costs are much less significant for services

operations, at 0 to 7 percent of location-sensitive costs.

Taxes typically represent 2 to 10 percent of total location-sensitive costs for the services operations examined,

and 6 to 14 percent for manufacturing operations.

13

Labour costs

Labor costs represent the most significant group of cost factors examined in this study, and include salaries and

wages, employer-paid statutory plans, and other employee benefits. The workforce required for each business

operation is based on 42 benchmark job positions used consistently throughout this study. These positions

reflect the full range of skills and responsibilities typically required in each of the business operations.

Salaries and wages include regular compensation, as well as any additional cash compensation customarily

paid to employees (shift bonuses, incentive pay, etc.). Salary and wage levels are lowest in Moncton, Winnipeg,

and Cedar Rapids, with the northern Ontario cities all ranking between 5th and 10th for this factor. Salary and

wage costs in the northern Ontario cities are 3.9 to 5.3 percent lower than in Toronto. The largest salary

differentials between northern Ontario and Toronto are seen for management and professional jobs (up to 11

percent), with much smaller wage differentials seen for technical/operational jobs (as little as 2 percent).

Statutory plans and payroll-based taxes are compared as a percentage of payroll. These costs are lowest

Vancouver and Moncton, then followed by all of the Ontario locations in 3rd through 9th place.

Other employee benefits include a wide range of employer-paid perks, such as vacation entitlements,

supplemental retirement savings, and private medical coverage (which represents a major cost item for US

employers). These costs, compared as a percentage of payroll, are lowest in Winnipeg and Vancouver, with all

Ontario cities tied in 5th place for this factor.

Labour Cost Comparison, per Employee

Salaries & Wages

Benefits Total Labour

Statutory Plans Other Benefits

Average per

Employee1

(US$) Rank

Percent of

Payroll Rank

Percent of

Payroll Rank

Avg. per

Employee1

(US$) Rank

Northern Ontario

North Bay, ON $61,066 5 8.2% 9 27.0% 5 $82,536 4

Sault Ste. Marie, ON $61,428 7 8.1% 6 27.0% 5 $83,000 6

Sudbury, ON $61,844 9 8.1% 5 27.0% 5 $83,561 7

Timmins, ON $61,384 6 8.1% 7 27.0% 5 $82,959 5

Thunder Bay, ON $61,969 10 8.1% 4 27.0% 5 $83,706 8

Other Jurisdictions

Cedar Rapids, IA $60,725 3 9.0% 12 34.3% 12 $87,060 12

Chatham-Kent, ON $60,969 4 8.1% 8 27.0% 5 $82,397 3

Minneapolis, MN $66,788 14 10.4% 13 34.3% 12 $96,675 14

Moncton, NB $56,297 1 6.3% 2 25.5% 3 $74,245 1

Montreal, QC $61,737 8 11.2% 14 25.8% 4 $84,547 9

Saginaw, MI $63,464 11 8.8% 11 38.5% 14 $93,516 13

Toronto, ON $64,463 12 7.9% 3 27.0% 5 $86,983 11

Vancouver, BC $65,031 13 5.6% 1 25.4% 2 $85,180 10

Winnipeg, MB $58,808 2 8.2% 10 24.8% 1 $78,206 2

1 Average for services sector (7 business operations) and manufacturing sector (12 business operations), as per the overall results. Represents 42 different job

positions, including professional and management positions.

14

Total labor costs, combining all of the above labor-related cost elements, are lowest in Moncton, Winnipeg,

Chatham-Kent, North Bay, and Timmins. Moderate statutory plan and other benefit costs result in higher

rankings for each of the northern Ontario cities for total labor costs than for salaries and wages, indicating

larger pay packets for employees than in some other jurisdictions while still maintaining moderate total labor

costs for employers. Total labor costs in the northern Ontario cities are, on average, 3.8 to 5.1 percent lower

than in Toronto.

Facility costs

Office leasing

For the services operations examined in this study, facilities are assumed to be established in leased Class “A”

office or commercial space, ranging from 10,000 to 45,000 square feet (929 to 4,180 square meters). For most

services operations examined in this study, costs are based on office space located in a suburban office park, or

equivalent location. The international financial services operation examined is assumed to be located in a

downtown (city center) office building.

Facility Costs, Office and Factory Leasing Costs

Services Sector – Office Lease1

Manufacturing –

Factory Lease2

Suburban Downtown Suburban

US$ per

sq.ft.3 Rank

US$ per

sq.ft.3 Rank

US$ per

sq.ft.3 Rank

Northern Ontario

North Bay, ON $14.67 4 $14.67 3 $7.98 12

Sault Ste. Marie, ON $18.81 8 $18.81 7 $5.05 4

Sudbury, ON $15.60 6 $19.71 8 $8.26 13

Timmins, ON $15.60 6 $15.60 5 $8.62 14

Thunder Bay, ON $14.67 4 $14.67 3 $5.50 7

Other Jurisdictions

Cedar Rapids, IA $12.00 3 $13.50 2 $4.13 3

Chatham-Kent, ON $11.93 2 $11.93 1 $3.67 2

Minneapolis, MN $26.04 12 $28.50 10 $6.63 10

Moncton, NB $19.72 9 $21.57 9 $5.28 6

Montreal, QC $24.05 11 $40.93 12 $5.50 7

Saginaw, MI $10.50 1 $18.00 6 $3.41 1

Toronto, ON $28.05 13 $44.50 13 $5.06 5

Vancouver, BC $28.44 14 $49.57 14 $7.34 11

Winnipeg, MB $21.57 10 $30.93 11 $5.73 9

1 Gross rent for office facilities includes all operating, tax, and insurance costs passed on by the landlord to the tenant as additional rent.

2 Net rent for a prime bulk industrial facility. All operating costs are in addition and are borne directly by the tenant.

3 Equals 0.09 m2, 10.76 sq.ft. = 1 m2.

15

In many smaller cities there is limited (if any) distinction between suburban and downtown markets and/or

there may be little or no Class “A” space available either downtown or in the suburbs. In such cases, the best

alternative office space cost has been used, regardless of whether it is located in the suburbs or downtown.

Among the northern Ontario cities, only Sudbury shows a meaningful differentiation between available high

quality office space in downtown and suburban locations.

Office lease costs reflect gross rent, and also include all operating, tax, and insurance costs generally passed on

by the landlord to the tenant in each location. The northern Ontario cities fare well in this comparison of office

leasing costs, with costs generally below average in both the suburban and downtown comparisons. Cedar

Rapids, Chatham-Kent, and Saginaw are the only other comparison locations to offer similarly competitive

office leasing costs.

Factory leasing

For the manufacturing operations, facilities are assumed to be established in a leased suburban industrial

building, either an existing modern building or a design-build-lease facility developed for this firm and leased

back by the developer. Land requirements range from 2 to 7 acres (0.8 to 2.8 hectares) and factory sizes range

from 30,000 to 120,000 square feet (2,790 to 11,148 square meters).

Factory lease costs for each location are based on rental costs for prime bulk industrial space. Lease costs only

include net rent. Additional costs, including utilities and property taxes, are borne directly by the manufacturing

firm and are considered later in this chapter. Based on these parameters, factory lease costs are lowest in

Saginaw, Chatham-Kent, Cedar Rapids, and Sault Ste. Marie.

Some smaller communities, including North Bay, Sudbury, and Timmins show relatively high costs for industrial

leasing. This is generally attributable to a limited market of existing suitable industrial facilities, and developers

who view the development of a new tenant-specific building to be quite risky due to the potential difficulty of

finding replacement tenants in the future (if required). In such instances, it may be more economical (in the long

run) for a firm to buy and build its own facility, saving money on rent by assuming the future risks associated

with the facility.

Industrial land and construction

As the manufacturing operations examined utilize leased industrial buildings, industrial land and construction

costs do not directly impact facility costs reported here. However, these costs are collected as part of the study

research program and are used to estimate market values of industrial properties in each location, as a basis for

calculating local property taxes.

Transportation costs

The manufacturing operations examined in this study are assumed to deliver their physical products by some

combination of surface (land and sea) and air freight. The table below illustrates the transportation modes

typically used by each type of model business operation, as well as the relative significance of transportation

costs for each industry model.

16

Transportation costs are estimated based on a general practice that firms deliver product to major distribution

centers in full load or standardized less-than-full load quantities, using normal delivery schedules. (In other

words, the model assumes that firms are not selling to customers requiring just-in-time (JIT), just-in-order (JIO),

or other specialized warehousing and delivery services, which can significantly affect transportation costs.)

The comparisons are based on costs-to-market, combining transportation rates for each distribution channel

and the proximity of each location to major markets for the various products, generally on a global basis.

Figures shown here for all freight modes include relevant fuel and security surcharges.

For surface freight—40’ containers to global destinations and equivalent road freight to regional destinations—

average costs per load are lowest from Toronto, Montreal, and Saginaw, and are highest from Moncton,

Winnipeg, and Thunder Bay.

Costs for air freight to a range of global destinations also vary by region. Average air freight costs are lowest

from Toronto, Montreal, and Minneapolis, and are highest from Winnipeg, Vancouver, and Thunder Bay.

Combining these two distribution channels, total freight costs are lowest from Toronto, Montreal, and

Saginaw. Total freight costs for all of the northern Ontario cities are above average relative to the comparison

group of cities. This factor negatively impacts the total business cost rankings for the northern Ontario cities in

the manufacturing sector, particularly in operations where transportation costs represent a larger portion of

total location costs—advanced batteries, aircraft parts, plastic products, food processing, and metal

components. In these industries, transportation costs are particularly significant either because products are

high volume relative to value, or high value but also very high weight and/or with complex transportation needs.

17

Transportation Costs

Global Distribution Total Annual Cost

Surface Freight

per Load1,2

Air Freight

per Kg1 US$'0003 Rank

Northern Ontario

North Bay, ON $2,518 $3.24 $2,888 8

Sault Ste. Marie, ON $2,665 $3.31 $3,049 10

Sudbury, ON $2,556 $3.24 $2,925 9

Timmins, ON $2,710 $3.38 $3,099 11

Thunder Bay, ON $3,022 $3.51 $3,432 14

Other Jurisdictions

Cedar Rapids, IA $2,110 $2.98 $2,464 4

Chatham-Kent, ON $2,100 $3.05 $2,472 5

Minneapolis, MN $2,318 $2.97 $2,662 6

Moncton, NB $2,740 $3.31 $3,126 12

Montreal, QC $2,005 $2.79 $2,335 2

Saginaw, MI $2,015 $3.16 $2,401 3

Toronto, ON $1,968 $2.77 $2,294 1

Vancouver, BC $2,310 $3.44 $2,755 7

Winnipeg, MB $2,978 $3.39 $3,370 13

1 Average for those manufacturing operations that utilize full-load delivery logistics for each mode of distribution.

2 Per standard 40’ container, or equivalent.

3 Average for 12 manufacturing operations included in the overall results.

Utilities

Electricity

The operations examined in this study are not particularly energy-intensive, and none of the operations

examined use sufficient electricity to qualify for wholesale electricity purchasing in Ontario or to benefit from

the Northern Industrial Electricity Rate Program. Compared in US cents per kilowatt-hour (table overleaf),

electricity costs are lowest in Winnipeg, Cedar Rapids, and Minneapolis, and are highest in Chatham-Kent and

Toronto.

Among the northern Ontario cities, Sault Ste. Marie and Thunder Bay have the lowest electric costs, ranking 8th

and 9th respectively among the 14 cities. Between these two cities, electric costs are lower in Thunder Bay for

smaller firms (<1,000 kW demand) but lower in Sault Ste. Marie for mid-sized firms as Thunder Bay Hydro moves

firms with demand of 1,000-5,000 kW onto a more expensive rate schedule.

Natural gas

Natural gas costs are analyzed only for manufacturing operations, as natural gas is generally irrelevant or

immaterial for service operations. Compared on the basis of US dollars per 100 cubic feet (CCF), natural gas

costs are lowest in Minneapolis, Thunder Bay, and Winnipeg, and are highest in Montreal and Moncton.

18

Utility Costs, Electricity and Natural Gas

Electricity1 Natural Gas2

US¢ per

kWh Rank

US$ per

CCF3 (100ft3) Rank

Northern Ontario

North Bay, ON 11.1 ¢ 10 $0.52 6

Sault Ste. Marie, ON 10.8 ¢ 8 $0.52 6

Sudbury, ON 11.9 ¢ 12 $0.52 6

Timmins, ON 11.9 ¢ 11 $0.52 6

Thunder Bay, ON 10.9 ¢ 9 $0.46 2

Other Jurisdictions

Cedar Rapids, IA 5.3 ¢ 2 $0.49 4

Chatham-Kent, ON 12.0 ¢ 13 $0.54 10

Minneapolis, MN 7.0 ¢ 3 $0.46 1

Moncton, NB 9.2 ¢ 7 $1.19 14

Montreal, QC 8.0 ¢ 5 $0.76 13

Saginaw, MI 8.4 ¢ 6 $0.69 12

Toronto, ON 12.0 ¢ 14 $0.51 5

Vancouver, BC 7.3 ¢ 4 $0.64 11

Winnipeg, MB 5.3 ¢ 1 $0.46 3

1 Average for 19 operations included in the overall results.


Natural gas costs have not been analyzed for services operations.

3 Equals 2.83 m3 or 29.87 GJ.

Financing costs

The base interest rates used in this study represent typical cash deposit rates and mid-class commercial

bond/loan rates in each country in Q4 2013. For Canada, these rates reflect 1.10 percent for cash deposits and

5.06 percent for mid-class commercial borrowing. For the United States, the equivalent rates are 0.38 percent

for cash deposits and 4.16 percent for mid-class commercial borrowing.

For operations in volatile industries or with limited fixed assets to offer as security, additional interest rate

premiums have been added to the base borrowing rates as appropriate.

Taxes other than income

Property taxes

Property taxes paid in each city are compared in the following table (overleaf) on the basis of US dollars of tax

per square foot of building space. Property taxes include taxes levied on the value of land and buildings,

machinery and equipment, inventory, and other physical assets. Property tax costs can vary significantly

between locations based on both local tax rates and local property values.

19

For services operations occupying leased office space, property taxes on real estate are typically levied on the

landlord. The amount of tax passed on to the tenant is captured indirectly in total office leasing costs (refer to

Page 14), but is not separately identifiable. For this reason, 12 of the 14 cities compared below report no

property tax cost for services operations. For the two cities showing a property tax cost, Saginaw is due to direct

taxation of business equipment while Winnipeg is due to a tax on business occupancy.

For manufacturing operations, property taxes typically account for about two percent of location-sensitive

costs. The lowest property tax costs for manufacturing operations are in North Bay, followed by Cedar Rapids,

Winnipeg, and Toronto.

Northern Ontario cities have some of the highest property tax costs among the 14 cities compared, with Sault

Ste. Marie ranking 11th, Sudbury 13th, and Thunder Bay 14th. While property values vary by city and also influence

property tax costs, among the Northern Ontario cities compared, North Bay’s property tax rate for light industry

is 3.175 percent while in Sudbury and Timmins the equivalent rate exceeds 5.0 percent, and in Sault Ste. Marie

and Thunder Bay the light industry tax rate is in excess of 5.5 percent.

Total Property Taxes

Services Sector1

(Leased Facilities)

Manufacturing

Sector2

US$ per

sq.ft.3 Rank

US$ per

sq.ft.3 Rank

Northern Ontario

North Bay, ON $0.00 1 $2.83 1

Sault Ste. Marie, ON $0.00 1 $5.60 11

Sudbury, ON $0.00 1 $6.23 13

Timmins, ON $0.00 1 $5.27 9

Thunder Bay, ON $0.00 1 $6.66 14

Other Jurisdictions

Cedar Rapids, IA $0.00 1 $3.78 2

Chatham-Kent, ON $0.00 1 $5.57 10

Minneapolis, MN $0.00 1 $4.02 6

Moncton, NB $0.00 1 $5.00 7

Montreal, QC $0.00 1 $5.71 12

Saginaw, MI $0.99 13 $5.21 8

Toronto, ON $0.00 1 $3.89 4

Vancouver, BC $0.00 1 $3.96 5

Winnipeg, MB $1.37 14 $3.82 3

1 Average for 7 services sector operations included in the overall results. Property taxes levied on the

landlord for leased multi-tenant office space are not included here, but are implicitly included in

gross rents, compared above under Facility Costs.

2 Average for 12 manufacturing sector operations included in the overall results. Includes all property

taxes related to leased industrial facilities.

3 Average US$ per square foot of building space. 1 sq.ft. = 0.09 m2; 10.76 sq.ft. = 1 m2.

20

Sundry Local Business Taxes

In addition to property taxes, which represent the most common form of local business tax, sundry local

business taxes are also included in the Competitive Alternatives analysis where required. Sundry local business

taxes, which can take a wide variety of forms, do not apply in any of the 14 cities compared in this report, but do

impact total cost calculations for approximately 20 cities included in the Competitive Alternatives 2014 study.

Capital tax

Capital taxes include all taxes levied on business financial capital, including long term debt, share capital,

and/or retained earnings/reserves. Capital taxes can include taxes levied annually, and/or one-time taxes levied

at the time debt or shares are issued.

Capital taxes no longer apply to general corporations in any jurisdiction in Canada, but do apply in certain

jurisdictions outside of Canada. In the United States, capital taxes apply (in various forms) in about 40 percent of

all locations examined in Competitive Alternatives 2014. Among the cities compared in this report, Minneapolis is

the only location where a capital tax applies, and the capital tax cost is capped at US $5,000 per year.

Sales and transaction taxes

Transaction taxes include gross receipts, non-refundable sales, and refundable value-added/sales (GST or VAT)

taxes.

Gross receipts taxes apply in a small number of US jurisdictions (but not in the three jurisdictions compared in

this report), either instead of, or in addition to, state or local income taxes. The United States also imposes an

industry-specific gross receipts tax on manufacturers of medical devices.

Non-refundable sales taxes apply in nearly all US states, and a minority of Canadian provinces (BC, SK, MB).

Where non-refundable sales taxes apply, exemptions are generally available for many of the costs incurred by a

manufacturer to avoid the compounding of taxes into the price of goods at each stage of production.

Among the 14 cities compared in this report, the sales tax burden typically varies from US $72,000 in Saginaw to

US $110,000 per annum in Cedar Rapids. Sales tax costs are significantly higher in Winnipeg, at US $216,000 per

annum, due to sales tax applying on manufacturing machinery and equipment. However, a provincial income

tax credit for new investment in manufacturing machinery more than offsets the amount of the sales tax paid,

and results in Winnipeg having the lowest provincial income tax burden among the 14 comparison cities.

Refundable value-added/sales taxes (GST or VAT) have been excluded from the analysis since their refundable

nature means there is no net cost to a business once input tax credits (refunds) have been claimed. These taxes

do impose a cost on companies in terms of administration and cash flow timing, but such costs are not material

to this study. Among the 14 comparison cities in this report, a GST-style tax is the only form of sales tax to apply

in Ontario, Quebec, and New Brunswick.

21

Income tax

Effective income tax rates are calculated to reflect combined corporate tax rates (federal, provincial/state, and

local), net of generally applicable tax credits, grants, and other government incentives. Effective tax rates may

vary by city within a state or province due to the existence of local corporate income taxes (e.g., in Saginaw) or

differences in business costs impacting the value of applicable incentives (e.g., R&D tax credits that vary based

on local wage levels for R&D staff). Effective income tax costs are compared by sector.

Effective Combined Corporate Income Tax Rate1

Services Sector Manufacturing

Sector4

Digital Services2

Research &

Development3

Corporate

Services2

% Rank % Rank % Rank % Rank

Northern Ontario

North Bay, ON 10.7% 7 1.2% 10 26.1% 5 17.9% 9

Sault Ste. Marie, ON 10.1% 5 0.9% 8 26.1% 8 17.6% 6

Sudbury, ON 10.1% 4 0.9% 7 26.1% 7 16.9% 5

Timmins, ON 10.4% 6 1.1% 9 26.1% 6 16.8% 4

Thunder Bay, ON 9.9% 3 0.8% 6 26.0% 3 16.4% 3

Other jurisdictions

Cedar Rapids, IA 32.7% 13 18.2% 13 35.7% 13 26.5% 14

Chatham-Kent, ON 11.0% 8 1.4% 11 26.0% 4 18.8% 11

Minneapolis, MN 31.6% 12 13.7% 12 35.6% 12 24.5% 12

Moncton, NB 20.8% 11 -21.3% 2 26.5% 10 15.4% 2

Montreal, QC 8.1% 2 -8.7% 3 19.3% 1 17.6% 7

Saginaw, MI 32.7% 14 20.5% 14 35.8% 14 25.9% 13

Toronto, ON 7.7% 1 0.2% 5 26.1% 9 18.4% 10

Vancouver, BC 17.9% 9 0.0% 4 20.9% 2 17.8% 8

Winnipeg, MB 18.8% 10 -30.9% 1 26.6% 11 11.9% 1

1 Net of government grants and incentives.

2 Average for two operations included in the overall results.

3 Average for three R&D operations included in the overall results. Most activities represent tax-eligible R&D activities. Negative effective income tax rates

are the result of R&D refundable income tax credits, grants or other incentive programs. These amounts may be substantial in some countries or locations.


Effective tax rates for digital services operations are partially influenced by tax incentives for R&D expenditures,

as well as incentives for digital media production offered in some Canadian and US jurisdictions. Among the 14

comparison cities for this sector, effective corporate income tax rates are lowest in Toronto and Montreal,

followed by the five northern Ontario cities ranked in third through seventh places. Ontario’s Interactive Digital

Media Tax Credit provides a significant advantage to all Ontario cities, causing them to have effective income

tax rates more than two thirds lower than in the three US cities compared.

22

For R&D services, both Canada and the US, and many of their provinces and states, offer R&D tax incentives.

These tax credits may be fully or partially refundable in certain situations, resulting in a “negative” tax cost (or

net government subsidy) for R&D operations in some jurisdictions. Winnipeg, Moncton, and Montreal all benefit

from refundable R&D tax credits, and thus have negative effective income tax rates in this subsector. While

effective tax rates for the northern Ontario cities are generally higher than for their Canadian counterparts, they

are still significantly lower than in each of the three US cities compared.

For general corporate services operations, effective tax rates tend to be relatively closer to a jurisdiction’s

nominal tax rate, due to fewer incentives applying in this subsector. Among the 14 comparison cities, effective

corporate income tax rates are lowest in Montreal and Vancouver, followed by all the Ontario cities. Effective tax

rates for Ontario in this subsector are about 10 percentage points lower than in the three US cities compared.

For manufacturing operations, effective corporate income tax rates are lowest in Winnipeg and Moncton due to

the applicability of investment tax credits in those jurisdictions. However, the northern Ontario cities also fare

well in this sector, with third place through sixth place all being filled by northern Ontario cities.

Nature of results

The results described here are sensitive to operating specifications, including revenue assumptions. Effective

tax rates will also vary for different operations, regions, and cities, and over time, due to changes in tax laws and

regulations. These results are of a general nature, and further detailed analysis is required to draw a conclusion

about comparative tax rates for a particular operation in alternate locations.

23

Appendix A –

Detailed Comparisons

OPERATION: OVERALL AVERAGE

(USD$'000)

City Chatham-Kent Moncton Montreal North Bay

Sault

Ste. Marie Sudbury Thunder Bay Timmins Toronto Vancouver Winnipeg Cedar Rapids Minneapolis Saginaw United States

Region ON NB QC ON ON ON ON ON ON BC MB IA MN MI Average

Country CA CA CA CA CA CA CA CA CA CA CA US US US

Included in national average

User-defined values applied

Exchange rate, per USD$ C$1.0900 C$1.0900 C$1.0900 C$1.0900 C$1.0900 C$1.0900 C$1.0900 C$1.0900 C$1.0900 C$1.0900 C$1.0900 $1.0000 $1.0000 $1.0000 $1.0000

Initial Investment

Cash 313 313 313 313 313 313 313 313 313 313 313 313 313 313 313

Inventory 2,208 2,208 2,208 2,208 2,208 2,208 2,208 2,208 2,208 2,208 2,208 2,208 2,208 2,208 2,208

Fixed assets 9,499 9,499 9,499 9,499 9,499 9,499 9,499 9,499 9,499 9,499 9,499 9,499 9,499 9,499 9,499

12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020

Initial Financing

Debt 5,275 5,275 5,275 5,275 5,275 5,275 5,275 5,275 5,275 5,275 5,275 5,275 5,275 5,275 5,275

Equity 6,745 6,745 6,745 6,745 6,745 6,745 6,745 6,745 6,745 6,745 6,745 6,745 6,745 6,745 6,745

12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020 12,020

10-Year Average Profit & Loss

Sales 23,934 23,788 24,131 23,961 24,016 23,996 23,994 23,982 24,257 24,230 23,968 24,129 24,521 24,285 24,771

Location-sensitive costs

Salary and wages 5,377 4,965 5,445 5,385 5,417 5,454 5,465 5,413 5,685 5,735 5,186 5,355 5,890 5,597 6,184

Statutory plans 438 315 610 439 440 442 442 441 452 319 425 484 614 494 576

Other benefits 1,452 1,268 1,402 1,454 1,462 1,473 1,475 1,462 1,535 1,458 1,286 1,838 2,022 2,156 2,256

Productivity adjustment – – – – – – – – – – – – – – –

Total labor 7,267 6,548 7,456 7,279 7,320 7,369 7,382 7,316 7,671 7,512 6,897 7,678 8,526 8,247 9,017

Rank, salary 4 1 8 5 7 9 10 6 12 13 2 3 14 11

Rank, total labor 3 1 9 4 6 7 8 5 11 10 2 12 14 13

Facility lease 292 457 537 492 433 518 397 528 568 664 504 312 588 272 550

Rank, facility lease 2 6 11 7 5 9 4 10 12 14 8 3 13 1

Surface freight 987 1,292 939 1,179 1,254 1,198 1,429 1,274 921 1,097 1,408 989 1,089 943 820

Air freight 249 271 228 265 270 265 287 276 226 281 277 243 243 258 236

Total transportation 1,236 1,563 1,168 1,444 1,524 1,463 1,716 1,550 1,147 1,378 1,685 1,232 1,331 1,201 1,056

Rank, transportation 5 12 2 8 10 9 14 11 1 7 13 4 6 3

Electricity 203 156 136 189 183 202 186 201 204 124 90 91 119 143 148

Gas 39 87 56 38 38 38 34 38 37 47 34 36 34 51 43

Total utilities 243 243 192 227 221 240 220 239 241 170 124 126 153 194 192

Rank, electricity 13 7 5 10 8 12 9 11 14 4 1 2 3 6

Rank, gas 10 14 13 6 6 6 2 6 5 11 3 4 1 12

Total operating costs 9,037 8,810 9,352 9,441 9,498 9,590 9,715 9,633 9,627 9,724 9,209 9,348 10,598 9,913 10,814

Rank, operating costs 2 1 5 6 7 8 11 10 9 12 3 4 14 13

COMPETITIVE ALTERNATIVES.COM COST MODEL

DETAILED COMPARISON REPORT

Page 1 of 10

Chatham-Kent Moncton Montreal North Bay

Sault


Interest 93 86 89 104 109 115 122 116 100 115 100 174 186 180 189

Depreciation 1,169 1,169 1,169 1,169 1,169 1,169 1,169 1,169 1,169 1,169 1,169 1,169 1,169 1,169 1,169

Total interest, depreciation 1,262 1,256 1,259 1,274 1,278 1,284 1,291 1,285 1,269 1,284 1,269 1,343 1,355 1,349 1,358

Sundry expenses – – – – – – – – – – – – – – –

Income tax, national 408 322 395 365 349 327 308 324 375 328 388 1,010 744 859 660

Income tax, regional 191 249 95 160 147 131 114 131 158 227 0 (15) (35) 10 87

Income tax, local – – – – – – – – – – – – – 2 4

Capital tax, national – – – – – – – – – – – – – – –

Capital tax, regional – – – – – – – – – – – – 5 – 3

Sales tax 1 – 1 1 1 1 1 1 1 104 216 110 82 72 148

Property tax 211 189 216 107 212 236 252 199 147 149 117 143 152 201 243

Gross receipts tax – – – – – – – – – – – 9 9 9 9

Business tax – – – – – – – – – – 44 – – – –

Tax rebates, grants, incentives – – – – – – – – – – – – – – (9)

Total taxes (net of grants) 810 760 706 634 708 695 675 655 680 809 766 1,257 956 1,153 1,144

Total location-sensitive costs 11,110 10,827 11,317 11,348 11,484 11,568 11,681 11,573 11,576 11,816 11,244 11,949 12,909 12,415 13,316

Location-insensitive costs

Materials 7,729 7,729 7,729 7,729 7,729 7,729 7,729 7,729 7,729 7,729 7,729 7,729 7,729 7,729 7,729

Other operating expenses 1,886 1,886 1,886 1,886 1,886 1,886 1,886 1,886 1,886 1,886 1,886 1,886 1,886 1,886 1,886

Total location-insensitive costs 9,615 9,615 9,615 9,615 9,615 9,615 9,615 9,615 9,615 9,615 9,615 9,615 9,615 9,615 9,615

Total costs 20,724 20,441 20,931 20,963 21,099 21,183 21,296 21,187 21,191 21,431 20,858 21,563 22,524 22,030 22,930

Net profit after tax 3,210 3,347 3,200 2,998 2,917 2,813 2,698 2,795 3,067 2,798 3,110 2,565 1,997 2,255 1,841

% of sales 13.4% 14.1% 13.3% 12.5% 12.1% 11.7% 11.2% 11.7% 12.6% 11.5% 13.0% 10.6% 8.1% 9.3% 7.4%

Overall cost rank 2 1 4 5 6 7 10 8 9 11 3 12 14 13

Overall cost index 90.4 89.1 91.3 91.4 92.0 92.4 92.9 92.4 92.4 93.5 91.0 94.0 98.2 96.1 100.0

Summary Measures

Net profit before income tax & grants 3,809 3,918 3,689 3,523 3,412 3,272 3,120 3,249 3,600 3,354 3,499 3,560 2,706 3,126 2,582

Regional apportionment factor 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 6.4% 6.4% 6.4% 65.9%

Effective income tax rate, net of grants 15.7% 14.6% 13.3% 14.9% 14.5% 14.0% 13.5% 14.0% 14.8% 16.6% 11.1% 28.0% 26.2% 27.9% 28.7%Rank 10 7 2 9 6 5 3 4 8 11 1 14 12 13

Property-based taxes per sq.ft. $2.78 $2.50 $2.86 $1.42 $2.80 $3.11 $3.33 $2.63 $1.94 $1.98 $2.59 $1.89 $2.01 $3.10 $3.49Rank 9 6 11 1 10 13 14 8 3 4 7 2 5 12

Capital tax, % of total assets 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.0% 0.0%Other taxes, % of sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 0.9% 0.6% 0.5% 0.4% 0.7%

Stat. plans as a % of wages 8.1% 6.3% 11.2% 8.2% 8.1% 8.1% 8.1% 8.1% 7.9% 5.6% 8.2% 9.0% 10.4% 8.8% 9.3%Rank 8 2 14 9 6 5 4 7 3 1 10 12 13 11

45.7% 41.2% 45.9% 45.7% 47.2% 48.1% 49.0% 47.8% 46.5% 48.0% 44.3% 58.3% 64.3% 62.8% 68.4%Rank 3 1 5 4 7 10 11 8 6 9 2 12 14 13

Factory lease, US$ per sq.ft $3.67 $5.28 $5.50 $7.98 $5.05 $8.26 $5.50 $8.62 $5.06 $7.34 $5.73 $4.13 $6.63 $3.41 $4.70Office lease, US$ per sq.ft. $11.93 $19.98 $25.55 $14.68 $18.80 $15.92 $14.68 $15.60 $29.31 $30.04 $22.29 $12.12 $26.23 $11.08 $28.97

Electricity, US¢ per kWh 11.98¢ 9.20¢ 8.02¢ 11.13¢ 10.80¢ 11.89¢ 10.94¢ 11.85¢ 12.01¢ 7.30¢ 5.28¢ 5.34¢ 7.03¢ 8.42¢ 8.74¢Gas, US$ per 100 cu.ft. $0.54 $1.19 $0.76 $0.52 $0.52 $0.52 $0.46 $0.52 $0.51 $0.64 $0.46 $0.49 $0.46 $0.69 $0.59

Interest rate, debt 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.06% 5.06% 5.06% 5.06%

Interest rate, cash 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% 1.10% 0.38% 0.38% 0.38% 0.38%

NPV discount rate 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.96% 5.06% 5.06% 5.06% 5.06%

NPV of cash flows (US$'M) $19.89 $20.88 $19.96 $18.26 $17.65 $16.84 $15.95 $16.68 $18.85 $16.82 $19.06 $16.18 $11.70 $13.75 $10.53Rank 3 1 2 6 7 8 12 10 5 9 4 11 14 13

Total incentives: US$ per job,after estimated tax effects $5,128 $6,945 $6,705 $5,110 $5,123 $5,121 $5,055 $5,092 $5,239 $4,075 $7,948 $2,607 $2,609 $2,231 $2,322

Tax & benefit burden, % of income before

taxes & benefits

Page 2 of 10

OPERATION: MANUFACTURING AVERAGE (12 operations)

(USD$'000)


Sault







Initial Investment

Cash 340 340 340 340 340 340 340 340 340 340 340 340 340 340 340

Inventory 4,417 4,417 4,417 4,417 4,417 4,417 4,417 4,417 4,417 4,417 4,417 4,417 4,417 4,417 4,417

Fixed assets 16,391 16,391 16,391 16,391 16,391 16,391 16,391 16,391 16,391 16,391 16,391 16,391 16,391 16,391 16,391

21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148

Initial Financing

Debt 10,294 10,294 10,294 10,294 10,294 10,294 10,294 10,294 10,294 10,294 10,294 10,294 10,294 10,294 10,294

Equity 10,854 10,854 10,854 10,854 10,854 10,854 10,854 10,854 10,854 10,854 10,854 10,854 10,854 10,854 10,854

21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148 21,148


Sales 34,840 34,840 34,840 34,840 34,840 34,840 34,840 34,840 34,840 34,840 34,840 34,840 34,840 34,840 34,840


Salary and wages 5,023 4,626 5,076 5,038 5,057 5,107 5,095 5,064 5,295 5,359 4,834 4,919 5,414 5,141 5,605

Statutory plans 479 346 645 481 481 485 483 483 495 359 450 477 639 494 580

Other benefits 1,419 1,236 1,367 1,423 1,428 1,443 1,439 1,430 1,495 1,425 1,254 1,922 2,115 2,254 2,331


Total labor 6,920 6,207 7,088 6,942 6,966 7,034 7,017 6,977 7,285 7,143 6,537 7,317 8,167 7,888 8,516

Rank, salary 4 1 8 5 6 10 9 7 12 13 2 3 14 11

Rank, total labor 3 1 9 4 5 8 7 6 11 10 2 12 14 13

Facility lease 279 402 419 608 384 629 419 656 385 559 436 314 505 260 358


Surface freight 1,973 2,585 1,879 2,358 2,508 2,396 2,859 2,548 1,843 2,194 2,816 1,978 2,177 1,886 1,640

Air freight 499 541 456 530 541 530 573 552 452 561 554 486 485 516 471

Total transportation 2,472 3,126 2,335 2,888 3,049 2,925 3,432 3,099 2,294 2,755 3,370 2,464 2,662 2,401 2,112


Electricity 334 248 224 308 299 330 305 330 334 205 142 140 192 227 236

Gas 79 175 111 76 76 76 68 76 74 93 68 72 67 101 86

Total utilities 413 422 335 384 376 406 373 406 408 298 210 212 259 329 322


Rank, gas 10 14 13 6 6 6 2 6 5 11 3 4 1 12





Page 3 of 10


Sault


Interest 307 300 300 329 336 348 362 351 312 335 323 369 388 377 389

Depreciation 1,972 1,972 1,972 1,972 1,972 1,972 1,972 1,972 1,972 1,972 1,972 1,972 1,972 1,972 1,972

Total interest, depreciation 2,278 2,271 2,272 2,300 2,308 2,319 2,333 2,323 2,284 2,307 2,295 2,341 2,359 2,349 2,360

Sundry expenses – – – – – – – – – – – – – – –

Income tax, national 503 311 485 420 394 352 316 341 474 403 462 1,151 757 951 726

Income tax, regional 361 393 310 304 287 257 225 250 342 295 5 (3) (14) 10 98

Income tax, local – – – – – – – – – – – – – – –



Sales tax – – – – – – – – – 109 319 102 73 63 176

Property tax 421 378 431 215 423 471 505 399 293 298 234 286 304 374 472

Gross receipts tax – – – – – – – – – – – 18 18 18 18

Business tax – – – – – – – – – – 54 – – – –

Tax rebates, grants, incentives – – – – – – – – – – – – – – –

Total taxes (net of grants) 1,285 1,082 1,226 939 1,105 1,080 1,045 990 1,110 1,105 1,073 1,554 1,144 1,416 1,494



Materials 15,457 15,457 15,457 15,457 15,457 15,457 15,457 15,457 15,457 15,457 15,457 15,457 15,457 15,457 15,457



Total costs 31,104 30,966 31,131 31,516 31,643 31,850 32,075 31,908 31,222 31,623 31,377 31,658 32,552 32,098 32,617


% of sales 10.7% 11.1% 10.6% 9.5% 9.2% 8.6% 7.9% 8.4% 10.4% 9.2% 9.9% 9.1% 6.6% 7.9% 6.4%



Summary Measures




Property-based taxes per sq.ft. $5.57 $5.00 $5.71 $2.83 $5.60 $6.23 $6.66 $5.27 $3.89 $3.96 $3.82 $3.78 $4.02 $5.21 $6.45Rank 10 7 12 1 11 13 14 9 4 5 3 2 6 8



46.0% 40.7% 46.6% 46.1% 48.5% 50.1% 51.8% 49.8% 46.1% 47.3% 44.5% 55.4% 63.0% 60.3% 66.5%Rank 3 1 6 4 8 10 11 9 5 7 2 12 14 13

Land, US$'000 per acre – – – – – – – – – – – – – – –Building, US$ per sq.ft. $3.67 $5.28 $5.50 $7.98 $5.05 $8.26 $5.50 $8.62 $5.06 $7.34 $5.73 $4.13 $6.63 $3.41 $4.70

Electricity, US¢ per kWh 12.04¢ 8.93¢ 8.06¢ 11.07¢ 10.78¢ 11.88¢ 10.98¢ 11.88¢ 12.02¢ 7.37¢ 5.11¢ 5.05¢ 6.91¢ 8.18¢ 8.49¢Gas, US$ per 100 cu.ft. $0.54 $1.19 $0.76 $0.52 $0.52 $0.52 $0.46 $0.52 $0.51 $0.64 $0.46 $0.49 $0.46 $0.69 $0.59







taxes & benefits

Page 4 of 10

OPERATION: R&D AVERAGE (3 operations)

(USD$'000)


Sault







Initial Investment

Cash 333 333 333 333 333 333 333 333 333 333 333 333 333 333 333

Inventory – – – – – – – – – – – – – – –

Fixed assets 3,383 3,383 3,383 3,383 3,383 3,383 3,383 3,383 3,383 3,383 3,383 3,383 3,383 3,383 3,383

3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717

Initial Financing

Debt 33 33 33 33 33 33 33 33 33 33 33 33 33 33 33

Equity 3,684 3,684 3,684 3,684 3,684 3,684 3,684 3,684 3,684 3,684 3,684 3,684 3,684 3,684 3,684

3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717 3,717


Sales 9,235 9,056 9,744 9,315 9,489 9,429 9,419 9,376 10,026 10,003 9,438 9,823 10,748 10,164 11,301


Salary and wages 4,287 3,989 4,350 4,286 4,324 4,357 4,381 4,310 4,528 4,568 4,158 4,347 4,725 4,549 5,005

Statutory plans 287 221 427 287 291 292 292 290 295 202 298 399 457 386 471

Other benefits 1,144 1,006 1,107 1,144 1,153 1,163 1,169 1,150 1,208 1,148 1,019 1,444 1,571 1,697 1,772


Total labor 5,719 5,216 5,883 5,717 5,767 5,811 5,842 5,750 6,031 5,918 5,475 6,191 6,753 6,631 7,248

Rank, salary 4 1 8 3 6 9 10 5 11 13 2 7 14 12

Rank, total labor 4 1 9 3 6 7 8 5 11 10 2 12 14 13

Facility lease 398 664 813 490 627 520 490 520 933 945 719 400 868 350 935


Surface freight – – – – – – – – – – – – – – –

Air freight – – – – – – – – – – – – – – –

Total transportation – – – – – – – – – – – – – – –


Electricity 76 67 49 74 70 77 70 76 77 45 39 42 48 61 63

Gas – – – – – – – – – – – – – – –

Total utilities 76 67 49 74 70 77 70 76 77 45 39 42 48 61 63


Rank, gas 1 1 1 1 1 1 1 1 1 1 1 1 1 1





Page 5 of 10


Sault


Interest (77) (96) (82) (76) (76) (76) (76) (76) (75) (76) (100) (23) (22) (21) (17)

Depreciation 458 458 458 458 458 458 458 458 458 458 458 458 458 458 458

Total interest, depreciation 381 361 375 381 382 382 382 381 383 382 358 435 435 436 441

Sundry expenses – – – – – – – – – – – – – – –

Income tax, national – – – – – – – – – – – 312 285 256 209

Income tax, regional 18 (305) (114) 16 12 11 11 14 2 – (431) (68) (115) 4 24

Income tax, local – – – – – – – – – – – – – – –



Sales tax 1 – 2 1 1 1 1 1 1 87 99 101 82 72 106

Property tax – – – – – – – – – – – – – 31 17

Gross receipts tax – – – – – – – – – – – – – – –

Business tax – – – – – – – – – – 42 – – – –


Total taxes (net of grants) 20 (305) (112) 17 13 13 12 15 4 87 (289) 345 254 363 357



Materials – – – – – – – – – – – – – – –



Total costs 7,907 7,319 8,324 7,994 8,174 8,118 8,110 8,058 8,743 8,692 7,615 8,727 9,673 9,156 10,358

Net profit after tax 1,327 1,737 1,420 1,321 1,315 1,311 1,309 1,318 1,283 1,311 1,823 1,096 1,075 1,008 943

% of sales 14.4% 19.2% 14.6% 14.2% 13.9% 13.9% 13.9% 14.1% 12.8% 13.1% 19.3% 11.2% 10.0% 9.9% 8.3%



Summary Measures



Effective income tax rate, net of grants 1.4% -21.3% -8.7% 1.2% 0.9% 0.9% 0.8% 1.1% 0.2% 0.0% -30.9% 18.2% 13.7% 20.5% 19.8%Rank 11 2 3 10 8 7 6 9 5 4 1 13 12 14

Property-based taxes per sq.ft. – – – – – – – – – – $1.28 – – $0.76 $0.40Rank 1 1 1 1 1 1 1 1 1 1 14 1 1 13



52.2% 34.7% 50.0% 52.3% 52.6% 52.8% 52.9% 52.5% 54.0% 52.3% 36.1% 66.6% 68.0% 70.8% 73.4%Rank 4 1 3 6 8 9 10 7 11 5 2 12 13 14


Electricity, US¢ per kWh 11.48¢ 10.21¢ 7.48¢ 11.23¢ 10.67¢ 11.73¢ 10.57¢ 11.53¢ 11.68¢ 6.78¢ 5.87¢ 6.42¢ 7.28¢ 9.25¢ 9.61¢Gas, US$ per 100 cu.ft. – – – – – – – – – – – – – – –







taxes & benefits

Page 6 of 10

OPERATION: DIGITAL AVERAGE (2 operations)

(USD$'000)


Sault







Initial Investment

Cash 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250

Inventory – – – – – – – – – – – – – – –

Fixed assets 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300 2,300

2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550

Initial Financing

Debt 850 850 850 850 850 850 850 850 850 850 850 850 850 850 850

Equity 1,700 1,700 1,700 1,700 1,700 1,700 1,700 1,700 1,700 1,700 1,700 1,700 1,700 1,700 1,700

2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550 2,550


Sales 20,075 20,075 20,075 20,075 20,075 20,075 20,075 20,075 20,075 20,075 20,075 20,075 20,075 20,075 20,075


Salary and wages 7,800 7,249 7,908 7,800 7,871 7,919 7,963 7,844 8,228 8,319 7,564 7,914 8,699 8,306 9,235

Statutory plans 521 356 752 521 522 523 524 521 530 351 519 645 779 665 742

Other benefits 1,993 1,752 1,928 1,993 2,011 2,024 2,034 2,005 2,102 2,001 1,775 2,289 2,516 2,696 2,843


Total labor 10,313 9,357 10,587 10,313 10,403 10,464 10,520 10,370 10,859 10,670 9,857 10,847 11,994 11,666 12,820

Rank, salary 3 1 7 3 6 9 10 5 11 13 2 8 14 12

Rank, total labor 3 1 9 3 6 7 8 5 12 10 2 11 14 13

Facility lease 255 422 514 314 402 334 314 334 600 608 461 257 557 225 598


Surface freight – – – – – – – – – – – – – – –

Air freight – – – – – – – – – – – – – – –



Electricity 83 74 56 80 77 84 76 83 85 49 43 47 53 66 69

Gas – – – – – – – – – – – – – – –

Total utilities 83 74 56 80 77 84 76 83 85 49 43 47 53 66 69


Rank, gas 1 1 1 1 1 1 1 1 1 1 1 1 1 1





Page 7 of 10


Sault


Interest (248) (243) (235) (246) (241) (241) (240) (244) (218) (190) (224) (20) (4) (11) 7

Depreciation 339 339 339 339 339 339 339 339 339 339 339 339 339 339 339


Sundry expenses – – – – – – – – – – – – – – –

Income tax, national 895 983 837 886 857 857 850 872 747 671 904 2,083 1,590 1,792 1,214

Income tax, regional (108) 675 (298) (122) (153) (156) (162) (137) (265) 467 471 (13) (49) 17 146

Income tax, local – – – – – – – – – – – – – – –



Sales tax 2 – 3 2 2 2 2 2 2 114 129 136 104 92 136

Property tax – – – – – – – – – – – – – 28 15


Business tax – – – – – – – – – – 28 – – – –

Tax rebates, grants, incentives – – – – – – – – – – – – – – (65)

Total taxes (net of grants) 789 1,657 542 766 706 703 690 737 485 1,251 1,531 2,205 1,649 1,928 1,447



Materials – – – – – – – – – – – – – – –



Total costs 13,677 13,751 13,948 13,710 13,832 13,828 13,844 13,764 14,295 14,873 14,153 15,820 16,733 16,359 17,424


% of sales 31.9% 31.5% 30.5% 31.7% 31.1% 31.1% 31.0% 31.4% 28.8% 25.9% 29.5% 21.2% 16.7% 18.5% 13.2%



Summary Measures







34.0% 37.3% 34.5% 34.0% 34.2% 34.2% 34.3% 34.1% 35.0% 40.9% 39.2% 54.7% 59.7% 58.7% 65.5%Rank 2 9 7 1 4 5 6 3 8 11 10 12 14 13









taxes & benefits

Page 8 of 10

OPERATION: CORPORATE SERVICES AVERAGE (2 operations)

(USD$'000)


Sault







Initial Investment

Cash 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250

Inventory – – – – – – – – – – – – – – –

Fixed assets 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750 1,750

2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000

Initial Financing

Debt – – – – – – – – – – – – – – –

Equity 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000

2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000


Sales 11,673 10,917 12,285 11,743 11,864 11,815 11,814 11,798 12,750 12,591 11,607 12,152 13,514 12,734 14,430


Salary and wages 5,827 5,332 5,915 5,836 5,864 5,848 5,888 5,860 6,242 6,218 5,586 5,835 6,495 6,057 6,930

Statutory plans 439 310 618 440 441 442 442 442 458 324 434 479 600 488 558

Other benefits 1,489 1,289 1,442 1,491 1,498 1,494 1,505 1,498 1,595 1,496 1,311 1,688 1,879 1,966 2,136


Total labor 7,754 6,930 7,975 7,767 7,803 7,784 7,834 7,799 8,295 8,037 7,330 8,001 8,974 8,511 9,623

Rank, salary 3 1 10 5 8 6 9 7 13 12 2 4 14 11

Rank, total labor 3 1 9 4 7 5 8 6 12 11 2 10 14 13

Facility lease 218 373 557 268 343 314 268 285 627 667 459 230 493 244 596


Surface freight – – – – – – – – – – – – – – –

Air freight – – – – – – – – – – – – – – –



Electricity 57 50 39 55 52 57 52 56 58 35 30 34 38 48 50

Gas – – – – – – – – – – – – – – –

Total utilities 57 50 39 55 52 57 52 56 58 35 30 33 38 48 50


Rank, gas 1 1 1 1 1 1 1 1 1 1 1 1 1 1





Page 9 of 10


Sault


Interest (60) (57) (68) (60) (61) (61) (61) (61) (65) (68) (60) (19) (21) (20) (22)

Depreciation 260 260 260 260 260 260 260 260 260 260 260 260 260 260 260


Sundry expenses – – – – – – – – – – – – – – –

Income tax, national 200 188 230 201 204 203 203 202 220 217 200 488 540 509 550

Income tax, regional 154 151 47 155 156 156 155 156 169 91 160 24 26 15 87

Income tax, local – – – – – – – – – – – – – 13 25



Sales tax 1 – 3 1 1 1 1 1 1 104 119 126 95 84 124

Property tax – – – – – – – – – – – – – 22 12


Business tax – – – – – – – – – – 28 – – – –


Total taxes (net of grants) 354 338 279 357 361 359 359 358 389 412 506 637 662 642 797



Materials – – – – – – – – – – – – – – –



Total costs 10,669 9,981 11,129 10,734 10,845 10,800 10,798 10,784 11,651 11,430 10,612 11,229 12,492 11,771 13,390

Net profit after tax 1,004 936 1,156 1,009 1,019 1,015 1,016 1,014 1,099 1,162 995 923 1,023 963 1,040

% of sales 8.6% 8.6% 9.4% 8.6% 8.6% 8.6% 8.6% 8.6% 8.6% 9.2% 8.6% 7.6% 7.6% 7.6% 7.2%



Summary Measures







69.4% 67.4% 66.9% 69.4% 69.3% 69.3% 69.4% 69.4% 69.0% 65.8% 69.3% 75.2% 75.4% 76.3% 77.0%Rank 11 3 2 9 5 6 10 8 4 1 7 12 13 14







Total incentives: US$ per job,after estimated tax effects – – $2,717 – – – – – – $1,356 – – – – ($7)


taxes & benefits

Page 10 of 10

Comparison of Business Costs for Northern Ontario Cities · 1 Introduction and methodology...

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