Study Says Canada Among Top Countries in Cost of Doing Business
Tuesday, March 30th, 2010
Canada has been identified as one of the top countries in the world to do business in as far as cost competitiveness, according to a study by KPMG group.
Of the ten countries researched, only Mexico finished ahead of them in the category.
This is an improvement over the last study performed by KPMG with Canada's major competitor the United States, which in 2008 were about even in cost of doing business, but cutting taxes for corporations and changing exchange rates put Canada ahead of their southern neighbors by about 5 percent now.
One thing to take into consideration, which can change fairly quickly, is the exchange rates, which now are 4 cents less than when the study was released, as far as the Canadian dollar in relationship to the U.S. dollar. So this list could fluctuate pretty quickly as currency values change.
So even though Liberal Michael Ignatieff has tried to use this as an excuse to keep fight against implementing scheduled tax reductions, it shows ignorance and misunderstanding of the currency markets, which can, as mentioned change quickly, and make dramatic impact on the viability of doing business in any country. So corporate tax cuts are vital to a robust economy and economic growth, and should be slashed as low as possible.
Lowering taxes is something that can be controlled and implemented, and is good management. Currencies can't be controlled, other than being centrally controlled like in China, but that will change soon, as the Chinese understand they will have to float the yuan against other currencies.
So to prematurely call for the end of tax cuts is ridiculous and ill-advised. Canada will quickly lose its strong competitive position if they do that, as the currency looks like it has support at levels that make it harder to compete against their international competitors.
KPMG concurs with this saying Canada needs to keep on increasing ways to improve the cost of doing business in the country to remain competitive.
Article by Gary B
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
Tags: business friendly countries , canada business , cost leaders , cost of doing business
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