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.
Exchange rates are key to Canada's cost advantage.
Indeed, much of Canada's increase in competitiveness is attributable to the strong value of the US dollar in Canada. The first provides an executive summary of the key findings. The second outlines the objectives and scope of the study, and includes a detailed description of the model used. The last section presents the results of the comparison of the cost factors. There is a section on each location-sensitive cost factor, supplemented by accompanying charts and tables.