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#Written by David Tam, 1999.           #       
#davidkftam@netscape.net Copyright 1999#  
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From tamda@ecf.toronto.edu Mon Jul 12 18:30:52 1999
Date: Mon, 15 Mar 1999 21:46:32 -0500 (EST)
From: David Kar Fai Tam 
To: APS 424S 
Subject: #20-03/17/99-"Canada lowest of G7 in business costs"


The Globe and Mail, Thursday, March 11, 1999. B5.

    This article reports on research findings about the cost of 
doing business in different nations.  Surprisingly (at least to 
me), Canada is ranked the lowest amongst the industrial super-
power nations. Most importantly, it even beat the United States 
despite contrary popular belief. The cost of setting up and 
running a business for 10 years is 7.8 % lower in Canada than in 
the United States. Next in line was Britain, where costs are 5.2 
% lower than the states. The United States itself is third. Japan 
had the highest costs with 21.9 % more than the states. 

    The explanation according to analysts is the exchange rates 
and labour costs, including benefits. However, it should be noted 
that if the Canadian exchange should rise to above 79 cents US, 
our country would lose is competitive advantages.  One particular 
item to note is that labour costs are lower in Canada than the 
states.  However, this has the negative impact of meaning that 
highly skilled Canadians are heading south of the border due to 
the higher salaries offered in the states.  However, it should be 
noted that the higher labour costs in the states is also due to 
the payment of Medicare. The study also found that taxes had a 
neutral influence on competitiveness, again despite popular 
misconception.

    A very interesting note is that the study showed the lowest 
business costs in Canada to be in the high-technology industries. 
Areas such as software development, telecommunications equipment, 
pharmaceuticals, plastics, medical devices, electronics, and 
metal fabrication fall into this category.  In particular, the 
cost of running a software firm is very low in comparison to the 
United States. It is lower by 14 %.

    I think this study can serve as a very powerful and 
effective marketing tool both abroad and within Canada. When used 
abroad, Canada can attract new companies to set up full-blown 
research, development, and design centers in Canada, rather than 
just branch plants. It can serve as a tool for attracting foreign 
investments, lowering government interest rates, and benefiting 
all citizens.  There is also an extremely urgent need to market 
these findings domestically. It must be used to encourage 
Canadian companies from becoming U.S. success stories in Silicon 
Valley. By encouraging domestic high tech growth, it will 
hopefully lead to a reduction in the brain drain to the states.

    Source: geocities.com/siliconvalley/campus/9640/4thYear/Business

               ( geocities.com/siliconvalley/campus/9640/4thYear)                   ( geocities.com/siliconvalley/campus/9640)                   ( geocities.com/siliconvalley/campus)                   ( geocities.com/siliconvalley)