Transcript No Slide Title

Low Production Costs
Manufacturing Unit Labour Cost Index
$U.S. Basis
110
• Growing productivity, skilled
workers, and low labour costs
make businesses competitive.
Index 1992=100
- Canada's competitive
position vis-à-vis the U.S.
has improved substantially
since 1991.
100
90
80
70
60
80
“ Our records for safety and productivity place the TMMC
team among the industry’s best. And when it comes to
quality, vehicles built at our Cambridge facility are among
the highest rated vehicles in North America.”
82
84
86
88
90
92
94
96
98
2000
Source: U.S. Department of Labor, Bureau of Labor Statistics, August 2001
Takanori (Tak) Sakaue, President
Toyota Motor Manufacturing Canada Inc.
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Low Employee Benefits
Employee Benefits* as a % of wages
• Statutory and employer-sponsored
benefits are lower in Canada than in
the U.S. Total payments for statutory
benefits and Canadian employersponsored plans and time not worked
are 27.1% of salary and wages
compared to 41.7% in the U.S.*
G-7 Comparison
80
60
- Lower medical insurance premiums
are an important reason for this.
40
• Payroll taxes are lower in Canada than
20
anywhere else in the G-7.
0
*KPMG Management Consulting, 1999
Employer-Sponsored
Statutory
* Employer-paid statutory benefits and wage-based taxes include: premiums for
unemployment insurance plans; public medical plan premiums; public pension plan
contributions; premiums for workers' compensation insurance; and other payroll taxes.
Source: KPMG Management Consulting, 1999
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Quality Health Care at Low Cost
Employer-Sponsored Health Benefits
Canada and the U.S.
• Canada's health care system is
among the best and the cheapest
in the industrialized countries:
- Employer-paid health benefits
as a percentage of workers'
gross pay in Canada are about
22 percent of that in the U.S.
(2.1% compared with 9.6%).
Hospital, surgical, medical and
major medical insurance
premiums*
Short term disability, sickness
or accident insurance and long
term disability or wage
continuation
Dental insurance premiums
0.6
8.0
0.7
0.7
0.7
0.5
Other (vision care, physical
and mental fitness, etc.)
0.1
0.4
2.1
Total
“The federal government’s medium-term budget position
remains sound, even with full implementation of the major
reforms to income taxation and new spending initiatives in
priority areas such as health care and education that have
been enacted or announced over the past year.”
9.6
% of Gross Annual Payroll
* U.S. value includes payments for retired employees
Source: Employee Benefits, 1995, prepared by the Research Centre, Economic Policy
Division , The U.S. Chamber of Commerce and KMPG, Employee Benefits Cost Survey, 1996.
Adapted from KPMG report on Corporate Taxation and Employee Benefit Cost Guide for
Large Service Firms, prepared for the ICT Branch, Industry Canada, March 2000
Statement of the IMF Mission on Canada,
January 31, 2001
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Low Energy Costs and Rates
Average Electricity Costs
• Canada has abundant oil, gas, coal
and hydro-electric resources.
• Electricity costs for industrial users
are significantly lower in Canada than
in the U.S.
- According to a recent study, the
annual electrical costs for an
average manufacturer are 30%
lower in Canada than in the U.S.
G-7 Comparison
Canada
France
U.K.
Germany
U.S.
Italy
Japan
0
50
100
150
200
250
300
350
400
$US (12 operations)
Average Electricity Rates
G-7 Comparison
Canada
France
• Electricity rates in Canada are about
70% of those in the U.S.
U.K.
Germany
U.S.
Italy
Japan
0
2
4
6
8
10
12
14
US cents per kWh (12 operations)
Source: KPMG Management Consulting, 2002
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Low Costs for Construction, Land, Office Lease
• Building construction costs in
Canada are roughly 20% lower
than those in the U.S. even after
accounting for additional
materials for climatic
conditions.
G-7 Comparison,
Index: U.S. = 100
Italy
Canada
France
U.S.
U.K.
Germany
Japan
0
•Land costs in Canada are
generally comparable with those
in the U.S.
50
Construction Costs
100
G-7 Comparison,
Index: U.S. = 100
150
200
250
300
Land Costs
France
U.S.
Canada
Italy
U.K.
Germany
Japan
+1828
0
• Canadian office lease costs are
63% of those in the U.S.
Lease costs include office
space plus operating, utility, tax
and insurance costs.
350
100
200
G-7 Comparison,
Index: U.S. = 100
300
400
500
Office Lease Costs
Italy
France
U.K.
Germany
Canada
U.S.
Japan
0
50
100
150
200
Source: KPMG Management Consulting, 2002
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