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How Competitive Is Canadian Business? The Answer May Surprise You
Good morning!
Canadians may complain a lot about the global competitiveness of our businesses, but you shouldn’t be fooled by all the grumbling. In reality, the business environment here in Canada is among the best in the world.
According to the Economist Intelligence Unit, business information arm of The Economist Group, which in turn publishes The Economist magazine, Canada is actually ranked #4 in the list of countries with the most favourable business environments, after Denmark, Finland and Singapore.
By contrast, the U.S. is currently ranked #10, and there is little doubt it is about to tumble further down the list. Bogged down with enormous shortfalls at all levels of government, taxes in the U.S. are on their way up whether Americans like it or not. In what is just the most recent attempt to close a multi-billion dollar budget deficit, New York has leapt ahead of California in the dubious game of Who Has The Highest Taxes by announcing 88 new taxes . Expect to see many more stories like this from the U.S. in the months ahead.
My experience has been that there is relatively little red tape to running a business in Canada, and tax rates are lower here than they are for our friends South of the border. But don’t just take my word for it. According to the 2008 KPMG report Competitive Alternatives: KPMG’s Guide to International Business Location , Canada has the third lowest tax cost for businesses among 10 countries studied, with a total tax burden a whopping 21.2% lower than the U.S., which came in at #5 in this study. Moreover, under the industry category of Medical Devices, Canada ranks #2 in the overall cost index, trailing only Mexico.
Something to think about the next time you’re standing in a long line at Tim Hortons, or digging out after a winter storm in April.
Yours truly,
John