New Study Confirms Canada Most Cost Effective Place to Do Business

Founder and Author of the Study in Chicago Feb. 21 -- Available to Detail

Findings and Share Insights

Feb 20, 2002, 00:00 ET from Canadian Consulate of Chicago

    CHICAGO, Feb. 20 /PRNewswire/ -- Companies in the Chicago area and across
 the United States have long sought ways to minimize the costs of doing
 business.  For some, this has meant examining opportunities within U.S.
 borders; for others, it has meant looking to America's neighbor to the north
 -- Canada -- for solutions.
     A new study of business costs by the international consultancy KPMG
 confirms Canada's cost competitiveness by ranking it the least expensive place
 to do business among nine major industrial countries.  The new study, the 2002
 G-7 edition of KPMG's Competitive Alternatives, examines business costs in
 86 medium and large size cities across the G-7 countries (Canada, France,
 Germany, Italy, Japan, the United Kingdom and the United States) plus Austria
 and the Netherlands.  It measures the combined impact of 27 different cost
 components that are likely to vary by location, including labor,
 transportation, health benefits, taxes, facility costs and currency values.
 The basis for comparison is the after-tax cost of startup and operation for
 12 specific types of business operations over a 10-year timeframe.  The study
 results are sensitive to currency exchange rates.
     Stuart MacKay, founder and author of KPMG's Competitive Alternatives
 study, will be in Chicago Thursday, February 21.  MacKay can detail the
 study's findings and share his insights into global trends that could have an
 impact on Chicago-area companies that operate in the various industry sectors
 analyzed in the study.  He also can highlight specific cost factors that have
 resulted in Canada's ranking as most cost competitive country among the nine
 major industrialized nations in the study.
     Canada, which maintains its top rank in the KPMG study, last conducted in
 1999, has the lowest costs among the nine countries in seven of the
 12 operations researched, including software, R&D, corporate services (account
 processing, call centers and IT support operations), and two types of
 manufacturing operations (electronic assembly and specialty chemicals).  On
 average, Canada's costs are 14.5 percent lower than U.S. costs, ranging from
 7.5 percent lower for food processing to 33.1 percent lower for electronic
 systems development and testing.
     According to the study, Japan is the most expensive country in which to do
 business, followed by Germany.  The United States is ranked as the third most
 expensive country among those surveyed.
     Among the cities studied, Chicago is ranked the 13th most cost competitive
 out of 26 industrial cities with populations of more than 2 million.  Chicago
 also has the lowest transportation costs among all cities in the Midwest
 region.  Montreal is the least costly city among the 26 heavily populated
 cities and, Edmonton, Canada, has the lowest business costs among all
 86 medium and large cities in the study.
     The study, which can be accessed online at , also features an interactive business cost
 model that allows companies to analyze industry-specific factors and evaluate
 real costs that vary depending on city and country.
     For example, an online comparison of pharmaceutical manufacturing
 operations in Chicago and Toronto reveals that total costs for the Toronto
 operation are approximately 7.5 percent lower than costs for the Chicago.
 Similarly, a business costs comparison of food processing operations in
 Chicago and Toronto reveals an approximate 6 percent total cost savings in
     There are more than 100 Chicago-based companies with existing operations
 in Canada.  They include: Abbott Laboratories, Allstate, Baxter International,
 Brunswick Corporation, R.R. Donnelley & Sons, FMC Corporation, W.W. Grainger,
 Illinois Tool Works, Kraft, McDonalds, Motorola Inc., Morton International,
 Navistar, Quaker Oats Company, Sara Lee Corporation, Sears, Smurfit-Stone
 Container, Tellabs, Tempel Steel and Wm. R. Wrigley Company.
     If you would like to set up an interview with Stuart McKay, please contact
 Gwen Biasi or Wendi Koziol at 312-558-1770.
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SOURCE Canadian Consulate of Chicago