Location-sensitive costs are on average 15.7 percent lower in Canada than in the United States. The Canadian advantage ranges from 5.5 percent for telecommunication equipment to 10.5 percent for software production. Most individual cost components are favourable to Canada Canadian costs are lower, on average, than those in the US for every location-sensitive item except transportation and telecommunications. The study cautions that tax costs cannot be easily compared among jurisdictions. Although the total tax cost may be higher in some Canadian jurisdictions, this is partly because profits are higher, not necessarily because rates are higher.
Costs are also lower in Canada for industrial land, construction and electricity.
In mid-1996, interest charges in Canada were below those in the US and, because of lower initial investment in buildings, depreciation charges in Canada were less. As well, income tax credits for research and development currently favour Canadian locations. Canada's cost advantage is consistent across all cities All Canadian locations enjoy a cost advantage relative to the US average. In fact, every Canadian city studied has lower annual location-sensitive costs in each industry than every US city studied. The lowest-cost city in Canada is Charlottetown, with costs that are 8.4 percent below the US average.