Canada still an attractive market for investment

Despite recent problems including a slowdown in the automotive sector and a strong dollar that has negatively impacted Canadian exporters, Canada is still an attractive location for companies looking for a cost advantage.

In fact, according to the recent 2006 Competitive Alternatives study conducted by international consultants KPMG International, Canada leads the G-7 countries in terms of low business costs, with a cost advantage of 5.5% over the United States.

Moreover, the study found that Canada ranks second only to Singapore in terms of competitiveness.

“Canada has retained its top ranking among G-7 countries, although the size of its advantage has been reduced by the strong appreciation in value of the Canadian dollar relative to the U.S. dollar over the last two years,” the study notes.

The study measures the combined impact of 27 significant cost components and covers 17 industry operations in nine industrialized countries: Canada, France, Italy, Japan, Germany, the Netherlands, Singapore, the United Kingdom, and the United States.

The basis for comparison was the after-tax cost of startup and operation for representative business operations in 12 industries over a 10-year planning horizon.

Some of the cost components that the study evaluated included labor cost, facility costs, transportation costs, utility costs, and income tax.

In particular, Canada had a strong result in the area of cost differentials relating to research and development.

“Cost differentials are generally higher for research and development, due to differences in labor costs for scientific and technical employees, as well as differences in tax treatment of research and development costs. The Netherlands, Canada, France and Italy all have their strongest results in this sector,” the study states.

In the area of labor costs, comparisons were based on 42 job positions.

According to the study, for manufacturing operations, labor costs represent the largest group of location-sensitive costs. Typically, labor costs represent 55% to 73% of total location-sensitive costs.

When salary and wage costs, costs for statutory plans, and costs for other employee-sponsored benefits were combined, total labor costs were lowest in Singapore followed by Canada, Italy, and France.

Facility costs usually represent the second-largest group of location-sensitive costs. For manufacturing operations, facility ownership costs (including financing) range from 10% to 22% of location-sensitive costs.

“Land purchase and building constructions costs for a new industrial facility are lowest in Canada, followed by Italy, the United States, and France.

One aspect of the study that was somewhat surprising was in the area of corporate income taxes which typically represent between 3% to 10% of location-sensitive costs.

Historically, many industry observers have felt that Canada’s corporate tax rates have been a major impediment for companies looking to invest in Canada.

However, according to the study, “For manufacturing operations, Singapore offers the lowest effective tax income rate, followed by the United Kingdom, the Netherlands, and Canada.”

Jerry Cook
Editor, MPP
jcook@clbmedia.ca 

Try-the-Technology spotlights welding technology

A unique event that highlights and showcases welding technology recently drew over 200 attendees for hands-on demonstrations of welding and joining applications.

The event called, Try-the-Technology, was recently held at Conestoga College’s Guelph campus.

Try-the-Technology was sponsored by the Golden Triangle chapter of the Canadian Welding Association (CWA) in association with the CWA’s Hamilton and Toronto chapters.

“Try-the-Technology is designed strictly to put the welding equipment in people’s hands and make sparks,” says Adam Belyea, an executive on the board of directors of the CWA’s Golden Triangle chapter.

Continues Belyea, “Instead of just reading about the technology or taking a plant tour, what we are saying (with Try-the-Technology) is, ‘Have you ever actually seen the technology work?’ With Try-the-Technology, you can learn about the technology directly from an OEM’s representative and then you can sit down and actually try the technology yourself.”

In particular, Try-the-Technology is an ideal vehicle to introduce newcomers to the multi-faceted technology of welding.

“I get a lot of calls from people who say, ‘My son is thinking about taking welding is there someplace that he can go to see welding equipment being used and what is involved with it.’

“Try-the-Technology (provides a venue) that you can walk through in an hour, see different processes being used, and see what they are supposed to be used for,” according to Belyea.

Some of the demonstrations that took place at the event included robotic MIG welding, brazing, aluminum welding, plasma welding and more.

A number of welding equipment distributors took part in Try-the-Technology including the Lincoln Electric Company of Canada Ltd., ESAB Group Canada, Miller Electric Mfg. Co., J.W. Harris, Hypertherm, Panasonic Factory Solutions Company of America, SNC Industrial, Thermadyne, and Tregaskiss.

Above picture:
Over 200 visitors had the opportunity to view hands-on demonstrations of welding at Try-the-Technology.

Automotive Parts Manufacturers Association of Canada - This site is an information resource for Canadian OEM producers of parts, equipment, tools, supplies and services to the automotive industry. www.apma.ca

Canadian Machine Tool Distributors Association - A resource for Canadian machine tool distributors. www.cmtda.com

Canadian Welding Association - Information resource for the Canadian welding industry. www.cwa-acs.org

Miller Electric Manufacturing Company - The new web site offers information and resources on welding for end users and business owners. www.MillerWelds.com/Results

Wilson Tool International - New e-Business Center offers online tool orders, quotes, invoices, special tool drawings, and shipment tracking for fabricators. www.wilsontool.com