Cost of Doing Business
Cost of Doing Business
What We Are Saying:
The cost of doing business in Saskatchewan is competitive with other provinces and other jurisdictions around the world.
What Others are Saying:
On March 27, 2008, KPMG released the latest edition of Competitive Alternatives: A Guide to International Business Costs. KPMG is an international accounting and consulting firm with clients all over the world. Competitive Alternatives compares the cost of doing business in 136 cities in ten countries (France, Germany, Italy, the Netherlands, the United Kingdom, Japan, the United States, Mexico, Australia and Canada). The survey included four Saskatchewan cities: Saskatoon, Regina, Prince Albert and Moose Jaw. KPMG bases its rankings on input costs for labour, taxation, facilities (land, construction, leasing rates), transportation, utilities, depreciation and financing (interest costs).
Saskatchewan passed with flying colors.
Total Location-Sensitive Costs All Industries
Source: KPMG 2008 Competitive Alternatives Executive Summary
The Fraser Institute released its Canadian Provincial Investment Climate Report on January 25, 2007. The purpose of the report is to "objectively evaluate the public policies that create and sustain a positive investment climate" and then rank the provinces accordingly. According to the Fraser Institute, Saskatchewan has the third best investment climate in Canada and is one of only three provinces in Canada to receive a passing grade. The institute concludes: "...three governments of different political orientation in the western provinces have all reduced the tax burden and implemented incentive-based tax relief and are now reaping the benefits of enhanced economic success."
According to Statistics Canada, over the past four years (2003 to 2006), Saskatchewan's composite economic growth rate was the third highest in Canada and above the national average. The outlook is positive for 2007 as well. The Canada West Foundation expects Saskatchewan's economic growth to be above the national average for the fifth consecutive year.
The April 2007 edition of Oilweek Magazine states: "There is a reason the province is racking up record land sales – it's a great place to do business."
According to Statistics Canada, Saskatchewan will set a new record for total investment for the third consecutive year in 2007. This will also be the second consecutive year Saskatchewan's total capital investment has exceeded $9 billion. Private investment is expected to be the second highest in Saskatchewan's history, behind only 2006.
University of Saskatchewan Economist Eric Howe states: " We're getting higher rates of economic growth because more businesses are locating here and more economic activity is locating here to take advantage of the lower tax rate." (CJWW Radio; January 25, 2007)
Here is the Proof:
In the first five months of 2007, urban housing starts increased 65% over the same period in 2006. Building permits increased 27.4% in the first four months of 2007, relative to the same period in 2006. Business (including farm) bankruptcies decreased 20.6% over the first four months of 2007, while new business incorporations grew 10.2% in 2006 relative to 2005.
Industrial land costs in Saskatchewan are among the lowest in Canada, and utility rates are competitive with the rest of the country.
Saskatchewan’s tax regime is competitive and getting better:
- A phased elimination of Saskatchewan's general Corporate Capital Tax (CCT) was announced in the 2006 Budget. CCT on new investment was eliminated on July 1, 2006, and general CCT on existing investment will be eliminated completely July 1, 2008. (CCT will continue to apply to provincial Crown corporations and financial institutions.)
- The Corporate Income Tax (CIT) rate for manufacturing and processing can be as low as 10% – one of the lowest in the country.
- The general CIT rate is undergoing a phased reduction from its current level to 12% by July 1, 2008.
- The CIT rate for small business is currently 4.5%, less than half the 1991 rate.
- There is no Payroll Tax and no Health Premium levied in Saskatchewan, unlike some other provinces.
- Saskatchewan’s top marginal rate for Personal Income Tax is the third lowest in Canada, and this is the only province in Canada to offer a universal child tax credit.
- At 5%, Saskatchewan's Provincial Sales Tax rate is the lowest of the nine provinces that charge PST.
Provincial Personal Income Tax
Top Marginal Rate
March 31, 2007
- Quebec, Nova Scotia, New Brunswick and Newfoundland fully harmonize their PST with the Federal Goods and Services Tax (GST).
- Quebec and Prince Edward Island apply their PST on top of the 7% Federal GST. This moves Quebec’s provincial rate of 7.5% to an effective rate of 8.025%, and PEI’s rate of 10% to an effective rate of 10.7%.
- Alberta has no PST, but it charges an Annual Health Premium of $1,056 per family. Although there is no statutory requirement, Alberta Finance estimates one-quarter of its health care premium revenue comes from business; from employers voluntarily paying all or part of premium costs for their employees. Saskatchewan has no health premium.