What's that about the loonie? Canada is still the cheapest place to do business among the word's top industrialized nations, according to a report released on Wednesday.
Despite a 20-per-cent spike in the value of the Canadian dollar in 2003, Canada ranked first among 11 nations surveyed by professional services firm KPMG.
However, the combination of a strong loonie and a weak greenback did erode the cost advantage between Canada and the U.S., KPMG said.
The cost of doing business in Canada was nine per cent cheaper than in the U.S. last year, down from 14.5 per cent in 2002.
Looking at individual cities, every major Canadian centre ranked as more affordable than U.S. cities, with the cost advantage ranging between four and 15 per cent. Looking at major international cities with metropolitan populations of more than two million, Montreal ranked as the most affordable city in the world in which to do business. Toronto placed third on the global stage.
Ottawa didn't rank among that list of major international cities since its metro population was only 1.129 million. However, on its own merits it ranks quite favourably against Montreal and Toronto with a cost advantage over the U.S. of eight per cent. Montreal's cost advantage was 9.4 per cent and Toronto's was 6.8 per cent.
The study ranked 11 major industrialized nations and 98 cities from North America, Europe and the Asia-Pacific region, using the U.S. as a baseline. Twenty-seven costs are taken into consideration, including labour, taxes and utilities.
Australia ranked second to Canada, with Melbourne ranking second between Montreal and Toronto.
Japan and Germany were the most expensive countries in which to do business. Japan's business costs were 24 per cent higher than those in the U.S. Yokohama and Frankfurt ranked as the most expensive cities. London and New York were also among the five most expensive in the world.
"The good news for Canada is that even if the Canadian dollar were to rise in value to more than 90 cents (U.S.), Canadian cities will continue to enjoy a significant cost advantage over their U.S. counterparts," Rob Brouwer, managing partner with KPMG in Toronto, said in the report.
Italy had the lowest salary and wage costs, followed by Canada, Britain and France.
Canada also boasted the lowest electricity costs and the lowest cost to payroll for statutory holidays.
The U.S. placed seventh on the list overall.
