National results for Canada reflect the combined results
for two major cities: Montreal and Toronto.
Total business costs in these two cities are relatively
similar, within 0.5 percentage points of each other. The
cost gap between these two cities has diminished since
2014, with higher labor costs and reduced tax incentives
in Montreal eating away at the cost advantage it holds
over Toronto. Out west, Canada’s third major city,
Vancouver, has higher business costs than either
Toronto or Montreal, with high property costs being the
main distinguishing factor for Vancouver. However, costs
for all three cities are well below the US baseline.
Among the four study sectors, Canada consistently
ranks second among the 10 countries across all sectors.
Significant incentive support for R&D activities in
Canada, from both federal and provincial governments,
helps to position R&D services as the sector in which
Canada holds its greatest cost advantage, with total
costs 27.7 percent below the US baseline.
The rise in value of the US dollar relative to its Canadian
counterpart through 2015 is the main driver of improved
cost index results for Canada and its cities in 2016. As a
result, Canada has managed to increase its overall cost
advantage relative to the US to almost 15 percent, even
as the cost trends noted in the table lead to somewhat
higher local business costs in Canada.