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Cost Savings, Higher Return on Investment

The cost of doing business in British Columbia can be significantly lower than in the United States. Labour, power and facility costs are generally lower; so is the effective corporate income tax rate.

Compared with the west coast of the United States, total annual operating cost savings of up to 25 per cent can be achieved in industries such as software development, biotechnology R&D, electronics design and manufacturing, and bio-products manufacturing.

Annual Operating Costs (Index Vancouver = 100)*
Exchange rate for cost comparisons: US$1 = CAD$1.22

  Advanced
Software		 Electronics
Assembly
Vancouver, British Columbia 100 100
San Diego, California 118 109
San Jose, California 126 114
Seattle, Washington 120 108
  Biomedical
R&D		 Medical
Devices
Vancouver, British Columbia 100 100
San Diego, California 118 108
San Jose, California 127 113
Seattle, Washington 116 109
*The index shows how much it would cost to operate in selected locations for every $100 of location-sensitive in Vancouver. Location-sensitive costs include: labour, power facilities, and taxes.
Source: KPMG Competitive Alternatives Cost Model; Ministry of Small Business, Technology & Economic Development, 2009

Effective Corporate Income Tax Rates*

  Advanced
Software		 Electronics
Assembly
Vancouver, British Columbia 22.4% 22.6%
San Diego, California 39.3% 39.8%
San Jose, California 36.4% 41.3%
Seattle, Washington 34.9% 33.3%
  Biomedical
R&D		 Medical
Devices
Vancouver, British Columbia **0.0% 21.7%
San Diego, California 35.0% 39.5%
San Jose, California 35.0% 41.4%
Seattle, Washington 35.1% 34.0%
*Income taxes, net of available tax credits, as a share of pre-tax income
**R&D tax credits eliminate all income tax liabilities
Source: KPMG Competitive Alternatives Cost Model; Ministry of Small Business, Technology & Economic Development, 2009

Business Cost Details

Annual Average Labour Costs per Employee*
Exchange rate for cost comparisons: US$1 = CAD$1.22

  Advanced
Software		 Electronics
Assembly		 Biomedical
R&D		 Medical
Devices
Vancouver,
British Columbia 		$86,055
 $58,990
 		 $72,303
 		 $58,590
San Diego,
California		 $104,809
 $68,570
 		 $86,030
 		 $68,220
San Jose,
California		 $119,127
 $78,200
 		 $98,030
 		 $77,810
Seattle,
Washington		 $109,464
 $72,370
 		 $89,970
 		 $72,720
*Salaries, payroll taxes and benefits
Source: KPMG Competitive Alternatives Cost Model; Ministry of Small Business, Technology & Economic Development, 2009

Industrial Electricity Costs (US ¢ per kWh, including taxes)
Exchange rate for cost comparisons: US$1 = CAD$1.22

  Medium User* Large User**
Vancouver, British Columbia 4.9 3.5
Portland, Oregon 4.6 3.6
San Francisco, California 10.8 7.4
Seattle, Washington 4.0 3.8
*1 MW demand (56% load factor)
**50,000 kW (85% load factor)
Source: 2008 Comparison of Electricity Prices in Major North American Cities, Hydro Quebec

Building Construction Costs
US$ per Square foot

  Light
Manufacturing
Vancouver, British Columbia $44
San Diego, California $51
San Francisco, California $59
Seattle, Washington $52
Source: Marshall and Swift, 2009

Gross Annual  Lease Rates
US$ per square foot
Exchange rate for cost comparisons: US$1 = CAD$1.22

  Class A Office
Suburban
Vancouver, British Columbia $25.40
San Diego, California $38.30
San Francisco, California $39.20
Seattle, Washington $27.70
Source: Colliers International, North American Office Highlights - Fourth Quarter 2008




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