: KPMG Report: Competitive Alternatives

Focus on Tax   
2009 Update for Ontario Ministry of Finance

November 2009
TAX

Appendix A – Detailed results by city

2008 results

The 17 cities examined in this study represent a subset of the 102 cities examined in the Competitive Alternatives 2008: Focus on Tax study. For the convenience of the reader and ease of comparison to the 2009 and 2011 results, this section provides a summary of the results and ranking for these 17 cities from the 2008 study. Cities are sorted in order of ascending TTI.

Overall (2008)
City Effective Tax Rates Ranks  TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA 23.6% 6.2% 12.5% 42.2% 3 5 2 1 69.3
Vancouver, CA 24.2% 9.5% 12.2% 45.8% 4 12 1 2 75.2
Monterrey, MX 28.4% 2.7% 14.9% 46.0% 8 1 3 3 75.4
Winnipeg, CA 19.3% 13.6% 16.1% 49.1% 1 17 6 4 80.5
Montreal, CA 22.7% 6.4% 21.6% 50.7% 2 6 17 5 83.2
Waterloo Region, CA 25.5% 10.3% 16.0% 51.7% 5 15 4 6 84.8
Toronto, CA 25.7% 10.0% 16.4% 52.0% 7 13 7 7 85.4
Ottawa, CA 25.7% 11.7% 16.1% 53.4% 6 16 5 8 87.6
Lexington, US 35.8% 3.9% 17.1% 56.7% 16 2 8 9 93.0
Atlanta, US 32.5% 7.2% 18.2% 57.9% 10 8 10 10 95.1
Youngstown, US 34.3% 5.8% 19.1% 59.2% 13 4 11 11 97.1
Detroit, US 32.4% 7.7% 20.0% 60.1% 9 10 15 12 98.6
Buffalo, US 33.6% 7.4% 19.4% 60.3% 12 9 13 13 98.9
Nashville, US 34.8% 8.4% 18.1% 61.3% 14 11 9 14 100.6
Philadelphia, US 35.8% 6.4% 19.9% 62.1% 15 7 14 15 101.9
Boston, US 38.2% 4.9% 19.1% 62.2% 17 3 11 16 102.1
Houston, US 32.9% 10.1% 20.5% 63.5% 11 14 16 17 104.1

Manufacturing (2008)
City  Effective Tax Rates Ranks  TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Monterrey, MX 28.1% 2.0% 10.3% 40.5% 8 1 1 1 71.6
Calgary, CA 24.7% 6.8% 11.3% 42.7% 2 5 3 2 75.6
Winnipeg, CA 19.3% 15.2% 13.6% 48.1% 1 17 6 3 85.1
Vancouver, CA 26.1% 11.2% 11.0% 48.3% 4 13 2 4 85.4
Lexington, US 34.1% 3.5% 13.5% 51.1% 16 2 4 5 90.3
Waterloo Region, CA 26.1% 12.3% 13.6% 52.0% 5 15 5 6 92.0
Toronto, CA 26.5% 11.9% 14.0% 52.4% 7 14 8 7 92.7
Montreal, CA 25.8% 9.2% 18.2% 53.2% 3 11 17 8 94.2
Atlanta, US 31.8% 7.9% 14.2% 53.8% 12 7 9 9 95.3
Ottawa, CA 26.4% 14.3% 13.7% 54.4% 6 16 7 10 96.3
Buffalo, US 31.4% 7.9% 15.5% 54.7% 9 8 12 11 96.9
Youngstown, US 33.5% 5.9% 16.1% 55.5% 14 4 14 12 98.1
Nashville, US 33.4% 7.9% 14.5% 55.8% 13 9 10 13 98.8
Philadelphia, US 33.5% 6.9% 15.8% 56.2% 15 6 13 14 99.5
Detroit, US 31.7% 8.8% 16.1% 56.6% 11 10 15 15 100.1
Boston, US 37.7% 5.1% 14.9% 57.7% 17 3 11 16 102.1
Houston, US 31.6% 11.0% 16.4% 59.1% 10 12 16 17 104.5

The following tables details the results for all 17 cities, sorted in order of ascending TTI. It is purely coincidental that for these sectors the TTI of 100.0 (which represents the U.S. average) also has a TETR of close to 100 percent.

Services (2008)
City  Effective Tax Rates  Ranks   TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA 26.5% 6.4% 40.3% 73.3% 1 2 2 1 72.2
Vancouver, CA 28.6% 9.6% 40.1% 78.2% 3 9 1 2 77.0
Monterrey, MX 30.8% 7.3% 45.9% 83.9% 8 3 3 3 82.6
Atlanta, US 35.4% 8.3% 50.5% 94.1% 9 6 7 4 92.7
Winnipeg, CA 28.7% 14.1% 51.6% 94.5% 4 16 8 5 93.0
Waterloo Region, CA 30.7% 11.5% 52.6% 94.8% 5 13 9 6 93.3
Ottawa, CA 30.7% 11.4% 53.0% 95.0% 5 11 11 7 93.6
Youngstown, US 37.3% 8.9% 49.0% 95.2% 11 8 6 8 93.8
Montreal, CA 28.5% 0.1% 67.4% 96.0% 2 1 17 9 94.5
Toronto, CA 30.7% 11.4% 54.2% 96.2% 5 11 13 10 94.8
Lexington, US 41.1% 7.6% 47.7% 96.4% 15 4 4 11 94.9
Detroit, US 35.4% 8.8% 55.5% 99.6% 9 7 14 12 98.1
Nashville, US 38.3% 14.1% 48.9% 101.4% 13 16 5 13 99.8
Houston, US 37.5% 12.9% 53.1% 103.5% 12 15 12 14 101.9
Buffalo, US 40.0% 11.7% 52.7% 104.4% 14 14 10 15 102.8
Boston, US 41.7% 7.9% 57.3% 106.8% 16 5 16 16 105.2
Philadelphia, US 42.0% 9.7% 55.7% 107.4% 17 10 15 17 105.8

Research & Development (2008)
City  Effective Tax Rates Ranks  TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Montreal, CA -21.0% 0.3% 44.9% 24.2% 1 1 9 1 24.3
Vancouver, CA 0.0% 14.9% 22.4% 37.4% 2 13 2 2 37.5
Calgary, CA 11.7% 14.9% 22.3% 48.9% 7 13 1 3 49.1
Waterloo Region, CA 9.6% 12.0% 31.7% 53.3% 5 6 3 4 53.4
Ottawa, CA 9.6% 12.0% 31.8% 53.4% 5 6 4 5 53.5
Toronto, CA 9.4% 12.0% 32.2% 53.7% 4 6 5 6 53.9
Winnipeg, CA 0.0% 27.2% 34.3% 61.4% 2 17 6 7 61.6
Monterrey, MX 32.0% 6.9% 41.7% 80.6% 8 2 7 8 80.8
Boston, US 36.6% 9.2% 48.0% 93.9% 11 4 12 9 94.2
Lexington, US 39.3% 12.1% 43.1% 94.4% 16 9 8 10 94.7
Youngstown, US 36.8% 14.0% 45.5% 96.3% 12 11 10 11 96.6
Detroit, US 35.0% 11.0% 50.4% 96.3% 9 5 14 12 96.6
Atlanta, US 35.0% 14.8% 49.6% 99.4% 9 12 13 13 99.7
Philadelphia, US 41.5% 8.9% 51.4% 101.8% 17 3 16 14 102.1
Buffalo, US 37.7% 13.3% 50.8% 101.9% 13 10 15 15 102.2
Nashville, US 38.6% 24.0% 46.8% 109.4% 15 16 11 16 109.8
Houston, US 38.0% 21.0% 57.0% 116.1% 14 15 17 17 116.4

2009 scenario, dollar at par

The following tables details the results for all 17 cities, sorted in order of ascending TTI.

Overall - 2009 Scenario (CDN$ at par)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA 18.8% 5.2% 12.3% 36.3% 2 3 2 1 59.6
Vancouver, CA 20.2% 7.1% 12.3% 39.6% 4 9 1 2 65.0
Montreal, CA 16.0% 6.1% 21.6% 43.8% 1 7 17 3 71.9
Monterrey, MX 28.6% 2.7% 14.9% 46.1% 8 1 3 4 75.7
Winnipeg, CA 19.5% 11.4% 16.3% 47.2% 3 17 5 5 77.5
Waterloo Region, CA 23.7% 9.6% 16.3% 49.6% 7 14 4 6 81.4
Toronto, CA 23.6% 9.9% 16.7% 50.3% 5 15 7 7 82.5
Ottawa, CA 23.7% 10.6% 16.4% 50.7% 6 16 6 8 83.2
Lexington, US 35.7% 3.9% 17.1% 56.8% 16 2 8 9 93.2
Atlanta, US 32.5% 7.0% 18.3% 57.8% 10 8 10 10 94.9
Youngstown, US 33.1% 6.0% 19.2% 58.3% 12 6 11 11 95.7
Detroit, US 32.4% 7.4% 20.1% 59.9% 9 11 15 12 98.4
Buffalo, US 33.5% 7.2% 19.4% 60.2% 13 10 13 13 98.8
Nashville, US 34.7% 8.4% 18.2% 61.3% 14 12 9 14 100.7
Philadelphia, US 35.7% 5.7% 20.0% 61.4% 15 5 14 15 100.9
Boston, US 37.4% 5.2% 19.4% 62.0% 17 4 12 16 101.8
Houston, US 32.8% 9.4% 20.6% 62.8% 11 13 16 17 103.1

Manufacturing - 2009 Scenario (CDN$ at par)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA 21.4% 5.7% 11.0% 38.0% 3 4 3 1 67.5
Vancouver, CA 21.3% 7.8% 10.9% 40.0% 2 9 2 2 71.0
Monterrey, MX 28.4% 2.0% 10.3% 40.7% 8 1 1 3 72.4
Winnipeg, CA 19.9% 12.5% 13.7% 46.1% 1 16 5 4 81.8
Montreal, CA 22.2% 8.8% 18.1% 49.2% 4 12 17 5 87.3
Waterloo Region, CA 24.0% 11.3% 13.9% 49.2% 7 14 6 6 87.3
Toronto, CA 23.9% 11.8% 14.3% 50.0% 5 15 8 7 88.8
Ottawa, CA 24.0% 12.7% 14.0% 50.7% 6 17 7 8 90.1
Lexington, US 34.0% 3.6% 13.5% 51.1% 16 2 4 9 90.8
Atlanta, US 31.7% 7.6% 14.3% 53.6% 12 7 9 10 95.2
Buffalo, US 31.3% 7.7% 15.5% 54.5% 9 8 12 11 96.8
Youngstown, US 32.3% 6.3% 16.1% 54.6% 13 5 14 12 97.0
Philadelphia, US 33.5% 6.3% 15.9% 55.7% 15 6 13 13 98.9
Nashville, US 33.3% 8.0% 14.5% 55.8% 14 10 10 14 99.1
Detroit, US 31.6% 8.5% 16.2% 56.2% 11 11 15 15 99.9
Boston, US 36.8% 5.6% 15.0% 57.4% 17 3 11 16 102.0
Houston, US 31.6% 10.0% 16.5% 58.0% 10 13 16 17 103.1

The following tables details the results for all 17 cities, sorted in order of ascending TTI. It is purely coincidental that for these sectors the TTI of 100.0 (which represents the U.S. average) also has a TETR of close to 100 percent.

Services - 2009 Scenario (CDN$ at par)
City  Effective Tax Rates Ranks  TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA 25.7% 5.4% 40.9% 72.0% 1 2 1 1 70.5
Vancouver, CA 25.8% 9.6% 41.1% 76.4% 2 10 2 2 74.8
Monterrey, MX 30.5% 7.3% 45.9% 83.7% 8 3 3 3 81.9
Winnipeg, CA 27.7% 13.1% 52.2% 93.1% 4 16 8 4 91.2
Atlanta, US 35.4% 8.2% 50.5% 94.0% 9 6 7 5 92.1
Youngstown, US 36.1% 8.9% 49.1% 94.1% 11 9 6 6 92.2
Waterloo Region, CA 29.8% 11.5% 53.4% 94.6% 5 13 11 7 92.6
Ottawa, CA 29.8% 11.4% 53.8% 94.9% 5 11 12 8 93.0
Montreal, CA 27.5% 0.1% 68.2% 95.9% 3 1 17 9 93.9
Toronto, CA 29.8% 11.4% 55.1% 96.2% 5 11 13 10 94.2
Lexington, US 41.1% 7.6% 47.8% 96.5% 16 4 4 11 94.5
Detroit, US 35.4% 8.6% 55.7% 99.7% 9 8 14 12 97.7
Nashville, US 38.3% 14.5% 49.0% 101.8% 13 17 5 13 99.7
Houston, US 37.5% 12.8% 53.3% 103.5% 12 15 10 14 101.3
Buffalo, US 40.0% 11.7% 52.8% 104.5% 14 14 9 15 102.3
Philadelphia, US 42.0% 8.2% 55.9% 106.1% 17 6 15 16 103.9
Boston, US 40.9% 8.1% 58.0% 107.0% 15 5 16 17 104.8

Research & Development - 2009 Scenario (CDN$ at par)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA -25.6% 12.6% 22.8% 9.8% 1 10 2 1 9.8
Montreal, CA -21.1% 0.2% 45.9% 24.9% 2 1 10 2 24.8
Vancouver, CA 0.0% 14.9% 22.7% 37.6% 3 14 1 3 37.5
Waterloo Region, CA 7.5% 12.0% 32.6% 52.1% 7 6 3 4 51.9
Ottawa, CA 7.4% 12.0% 32.7% 52.1% 6 6 4 5 52.0
Toronto, CA 7.3% 12.0% 33.1% 52.5% 5 6 5 6 52.3
Winnipeg, CA 0.0% 25.5% 34.8% 60.3% 3 17 6 7 60.1
Monterrey, MX 32.4% 6.9% 41.7% 81.0% 8 2 7 8 80.7
Boston, US 36.3% 9.6% 48.6% 94.4% 12 4 12 9 94.1
Lexington, US 39.3% 12.1% 43.2% 94.6% 16 9 8 10 94.3
Youngstown, US 35.6% 14.0% 45.6% 95.3% 11 12 9 11 95.0
Detroit, US 35.0% 10.8% 50.6% 96.4% 9 5 14 12 96.1
Atlanta, US 35.0% 14.7% 49.7% 99.4% 9 13 13 13 99.0
Buffalo, US 37.7% 13.3% 51.0% 102.0% 13 11 15 14 101.7
Philadelphia, US 41.5% 8.9% 51.8% 102.1% 17 3 16 15 101.8
Nashville, US 38.6% 24.0% 47.0% 109.6% 15 16 11 16 109.3
Houston, US 38.0% 20.6% 57.4% 116.0% 14 15 17 17 115.6

2009 scenario, dollar at 80 U.S. cents

The following tables details the results for all 17 cities, sorted in order of ascending TTI.

Overall - 2009 Scenario (CDN$ at 80¢)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA 19.7% 4.1% 9.9% 33.7% 2 3 2 1 55.3
Vancouver, CA 20.7% 6.6% 9.8% 37.2% 4 8 1 2 61.0
Montreal, CA 18.4% 4.9% 17.3% 40.6% 1 4 9 3 66.7
Monterrey, MX 28.3% 2.2% 11.9% 42.3% 8 1 3 4 69.5
Winnipeg, CA 20.3% 10.0% 13.1% 43.4% 3 17 5 5 71.2
Waterloo Region, CA 24.2% 8.3% 13.0% 45.5% 7 12 4 6 74.7
Toronto, CA 24.1% 8.6% 13.4% 46.0% 5 14 7 7 75.6
Ottawa, CA 24.1% 9.1% 13.1% 46.4% 6 15 6 8 76.1
Lexington, US 35.7% 3.9% 17.1% 56.8% 16 2 8 9 93.2
Atlanta, US 32.5% 7.0% 18.3% 57.8% 10 9 11 10 94.9
Youngstown, US 33.1% 6.0% 19.2% 58.3% 12 7 12 11 95.7
Detroit, US 32.4% 7.4% 20.1% 59.9% 9 11 16 12 98.4
Buffalo, US 33.5% 7.2% 19.4% 60.2% 13 10 14 13 98.8
Nashville, US 34.7% 8.4% 18.2% 61.3% 14 13 10 14 100.7
Philadelphia, US 35.7% 5.7% 20.0% 61.4% 15 6 15 15 100.9
Boston, US 37.4% 5.2% 19.4% 62.0% 17 5 13 16 101.8
Houston, US 32.8% 9.4% 20.6% 62.8% 11 16 17 17 103.1

Manufacturing - 2009 Scenario (CDN$ at 80¢)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA 21.8% 4.5% 8.8% 35.1% 3 3 3 1 62.4
Vancouver, CA 21.8% 7.1% 8.7% 37.6% 2 8 2 2 66.8
Monterrey, MX 28.2% 1.6% 8.2% 38.0% 8 1 1 3 67.5
Winnipeg, CA 20.6% 10.8% 11.0% 42.4% 1 17 4 4 75.4
Montreal, CA 22.7% 7.1% 14.4% 44.2% 4 7 10 5 78.6
Waterloo Region, CA 24.4% 9.5% 11.1% 45.0% 7 13 5 6 79.8
Toronto, CA 24.3% 9.9% 11.4% 45.6% 5 14 7 7 81.0
Ottawa, CA 24.4% 10.7% 11.2% 46.2% 6 16 6 8 82.0
Lexington, US 34.0% 3.6% 13.5% 51.1% 16 2 8 9 90.8
Atlanta, US 31.7% 7.6% 14.3% 53.6% 12 9 9 10 95.2
Buffalo, US 31.3% 7.7% 15.5% 54.5% 9 10 13 11 96.8
Youngstown, US 32.3% 6.3% 16.1% 54.6% 13 5 15 12 97.0
Philadelphia, US 33.5% 6.3% 15.9% 55.7% 15 6 14 13 98.9
Nashville, US 33.3% 8.0% 14.5% 55.8% 14 11 11 14 99.1
Detroit, US 31.6% 8.5% 16.2% 56.2% 11 12 16 15 99.9
Boston, US 36.8% 5.6% 15.0% 57.4% 17 4 12 16 102.0
Houston, US 31.6% 10.0% 16.5% 58.0% 10 15 17 17 103.1

The following tables details the results for all 17 cities, sorted in order of ascending TTI. It is purely coincidental that for these sectors the TTI of 100.0 (which represents the U.S. average) also has a TETR of close to 100 percent.

Services - 2009 Scenario (CDN$ at 80¢)
City Effective Tax Rates  Ranks TTI 
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA 25.7% 4.3% 32.7% 62.7% 1 2 1 1 61.4
Vancouver, CA 25.8% 9.2% 32.9% 67.8% 2 10 2 2 66.4
Monterrey, MX 29.3% 5.8% 36.7% 71.8% 5 3 3 3 70.3
Winnipeg, CA 27.7% 12.1% 41.8% 81.6% 4 15 4 4 79.9
Montreal, CA 27.5% 0.1% 54.5% 82.2% 3 1 14 5 80.5
Waterloo Region, CA 29.8% 10.9% 42.7% 83.4% 6 11 5 6 81.7
Ottawa, CA 29.8% 10.9% 43.1% 83.7% 6 11 6 7 82.0
Toronto, CA 29.8% 10.9% 44.1% 84.8% 6 11 7 8 83.0
Atlanta, US 35.4% 8.2% 50.5% 94.0% 9 6 11 9 92.1
Youngstown, US 36.1% 8.9% 49.1% 94.1% 11 9 10 10 92.2
Lexington, US 41.1% 7.6% 47.8% 96.5% 16 4 8 11 94.5
Detroit, US 35.4% 8.6% 55.7% 99.7% 9 8 15 12 97.7
Nashville, US 38.3% 14.5% 49.0% 101.8% 13 17 9 13 99.7
Houston, US 37.5% 12.8% 53.3% 103.5% 12 16 13 14 101.3
Buffalo, US 40.0% 11.7% 52.8% 104.5% 14 14 12 15 102.3
Philadelphia, US 42.0% 8.2% 55.9% 106.1% 17 6 16 16 103.9
Boston, US 40.9% 8.1% 58.0% 107.0% 15 5 17 17 104.8

Research & Development - 2009 Scenario (CDN$ at 80¢)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA -18.6% 10.0% 18.2% 9.6% 1 5 1 1 9.6
Montreal, CA -14.1% 0.2% 36.7% 22.7% 2 1 8 2 22.7
Vancouver, CA 0.0% 14.8% 18.2% 33.0% 3 14 1 3 32.9
Waterloo Region, CA 8.4% 11.8% 26.0% 46.3% 7 7 3 4 46.1
Ottawa, CA 8.4% 11.8% 26.1% 46.4% 6 7 4 5 46.2
Toronto, CA 8.3% 11.8% 26.5% 46.6% 5 7 5 6 46.4
Winnipeg, CA 0.0% 23.6% 27.9% 51.5% 3 16 6 7 51.4
Monterrey, MX 31.5% 5.5% 33.4% 70.4% 8 2 7 8 70.2
Boston, US 36.3% 9.6% 48.6% 94.4% 12 4 12 9 94.1
Lexington, US 39.3% 12.1% 43.2% 94.6% 16 10 9 10 94.3
Youngstown, US 35.6% 14.0% 45.6% 95.3% 11 12 10 11 95.0
Detroit, US 35.0% 10.8% 50.6% 96.4% 9 6 14 12 96.1
Atlanta, US 35.0% 14.7% 49.7% 99.4% 9 13 13 13 99.0
Buffalo, US 37.7% 13.3% 51.0% 102.0% 13 11 15 14 101.7
Philadelphia, US 41.5% 8.9% 51.8% 102.1% 17 3 16 15 101.8
Nashville, US 38.6% 24.0% 47.0% 109.6% 15 17 11 16 109.3
Houston, US 38.0% 20.6% 57.4% 116.0% 14 15 17 17 115.6

2011 scenario, dollar at par

The following tables details the results for all 17 cities, sorted in order of ascending TTI.

Overall - 2011 Scenario (CDN$ at par)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Vancouver, CA 19.8% 3.7% 12.3% 35.8% 4 2 1 1 58.8
Calgary, CA 18.5% 5.2% 12.3% 36.0% 2 4 2 2 59.2
Montreal, CA 15.7% 6.1% 21.6% 43.4% 1 8 17 3 71.4
Waterloo Region, CA 20.9% 6.8% 16.3% 44.0% 7 9 4 4 72.3
Toronto, CA 20.8% 7.2% 16.7% 44.7% 5 11 7 5 73.5
Ottawa, CA 20.8% 7.8% 16.4% 45.1% 6 14 6 6 74.1
Monterrey, MX 28.6% 2.7% 14.9% 46.1% 8 1 3 7 75.8
Winnipeg, CA 19.3% 11.4% 16.3% 47.0% 3 17 5 8 77.2
Lexington, US 35.7% 3.9% 17.1% 56.7% 16 3 8 9 93.2
Atlanta, US 32.4% 7.0% 18.3% 57.7% 10 10 10 10 94.9
Youngstown, US 33.0% 6.0% 19.2% 58.2% 12 7 11 11 95.6
Detroit, US 32.3% 7.4% 20.1% 59.9% 9 13 15 12 98.4
Buffalo, US 33.5% 7.2% 19.4% 60.1% 13 12 13 13 98.8
Nashville, US 34.7% 8.4% 18.2% 61.3% 14 15 9 14 100.7
Philadelphia, US 35.6% 5.7% 20.0% 61.3% 15 5 14 15 100.8
Boston, US 37.2% 5.7% 19.4% 62.3% 17 6 12 16 102.3
Houston, US 32.8% 9.4% 20.6% 62.7% 11 16 16 17 103.1

Manufacturing - 2011 Scenario (CDN$ at par)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Vancouver, CA 21.1% 5.2% 10.9% 37.2% 2 3 2 1 66.2
Calgary, CA 21.2% 5.7% 11.0% 37.8% 3 4 3 2 67.2
Monterrey, MX 28.4% 2.0% 10.3% 40.7% 8 1 1 3 72.5
Waterloo Region, CA 21.8% 9.7% 13.9% 45.3% 6 13 6 4 80.7
Winnipeg, CA 19.7% 12.5% 13.7% 45.9% 1 17 5 5 81.7
Toronto, CA 21.7% 10.2% 14.3% 46.2% 4 15 8 6 82.2
Ottawa, CA 21.8% 11.1% 14.0% 46.9% 5 16 7 7 83.4
Montreal, CA 22.0% 8.8% 18.1% 48.9% 7 12 17 8 87.1
Lexington, US 33.9% 3.6% 13.5% 51.0% 16 2 4 9 90.7
Atlanta, US 31.6% 7.6% 14.3% 53.5% 12 8 9 10 95.2
Buffalo, US 31.2% 7.7% 15.5% 54.4% 9 9 12 11 96.8
Youngstown, US 32.1% 6.3% 16.1% 54.5% 13 6 14 12 97.0
Philadelphia, US 33.4% 6.3% 15.9% 55.6% 15 7 13 13 98.9
Nashville, US 33.2% 8.0% 14.5% 55.7% 14 10 10 14 99.2
Detroit, US 31.5% 8.5% 16.2% 56.1% 11 11 15 15 99.9
Boston, US 36.6% 5.9% 15.0% 57.5% 17 5 11 16 102.3
Houston, US 31.5% 10.0% 16.5% 57.9% 10 14 16 17 103.1

The following tables details the results for all 17 cities, sorted in order of ascending TTI. It is purely coincidental that for these sectors the TTI of 100.0 (which represents the U.S. average) also has a TETR of close to 100 percent.

Services - 2011 Scenario (CDN$ at par)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Vancouver, CA 25.3% 1.0% 41.1% 67.4% 1 2 2 1 66.0
Calgary, CA 25.3% 5.4% 40.9% 71.5% 1 6 1 2 70.1
Waterloo Region, CA 25.4% 1.6% 53.4% 80.3% 3 5 11 3 78.7
Ottawa, CA 25.4% 1.5% 53.8% 80.7% 3 3 12 4 79.0
Toronto, CA 25.4% 1.5% 55.1% 82.0% 3 3 13 5 80.3
Monterrey, MX 30.5% 7.3% 45.9% 83.7% 8 7 3 6 81.9
Winnipeg, CA 27.3% 13.1% 52.2% 92.7% 7 16 8 7 90.7
Atlanta, US 35.4% 8.2% 50.5% 94.0% 9 10 7 8 92.1
Youngstown, US 36.0% 8.9% 49.1% 94.0% 11 12 6 8 92.1
Montreal, CA 27.2% 0.0% 68.2% 95.3% 6 1 17 10 93.3
Lexington, US 41.1% 7.6% 47.8% 96.5% 16 8 4 11 94.5
Detroit, US 35.4% 8.6% 55.7% 99.7% 9 11 14 12 97.7
Nashville, US 38.3% 14.5% 49.0% 101.8% 13 17 5 13 99.7
Houston, US 37.5% 12.8% 53.3% 103.5% 12 15 10 14 101.3
Buffalo, US 40.0% 11.7% 52.8% 104.5% 14 14 9 15 102.3
Philadelphia, US 42.0% 8.0% 55.9% 105.9% 17 9 15 16 103.7
Boston, US 40.6% 9.7% 58.0% 108.4% 15 13 16 17 106.1

Research & Development - 2011 Scenario (CDN$ at par)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA -25.6% 12.6% 22.8% 9.8% 1 11 2 1 9.8
Vancouver, CA 0.0% 0.3% 22.7% 23.0% 3 2 1 2 22.9
Montreal, CA -21.2% 0.0% 45.9% 24.7% 2 1 10 3 24.6
Waterloo Region, CA 3.3% 0.5% 32.6% 36.3% 6 3 3 4 36.2
Ottawa, CA 3.3% 0.6% 32.7% 36.6% 6 4 4 5 36.5
Toronto, CA 3.1% 0.6% 33.1% 36.9% 5 5 5 6 36.8
Winnipeg, CA 0.0% 25.5% 34.8% 60.3% 3 17 6 7 60.1
Monterrey, MX 32.4% 6.9% 41.7% 81.0% 8 6 7 8 80.7
Lexington, US 39.3% 12.1% 43.2% 94.6% 16 10 8 9 94.3
Youngstown, US 35.6% 14.0% 45.6% 95.3% 11 13 9 10 95.0
Boston, US 36.2% 11.3% 48.6% 96.0% 12 9 12 11 95.7
Detroit, US 35.0% 10.8% 50.6% 96.4% 9 8 14 12 96.1
Atlanta, US 35.0% 14.7% 49.7% 99.4% 9 14 13 13 99.0
Buffalo, US 37.7% 13.3% 51.0% 102.0% 13 12 15 14 101.7
Philadelphia, US 41.5% 8.9% 51.8% 102.1% 17 7 16 15 101.8
Nashville, US 38.6% 24.0% 47.0% 109.6% 15 16 11 16 109.3
Houston, US 38.0% 20.6% 57.4% 116.0% 14 15 17 17 115.6

2011 scenario, dollar at 80 U.S. cents

The following tables details the results for all 17 cities, sorted in order of ascending TTI.

Overall - 2011 Scenariio (CDN$ at 80¢)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA 19.4% 4.1% 9.9% 33.4% 2 4 2 1 54.9
Vancouver, CA 20.3% 3.3% 9.8% 33.4% 4 2 1 2 54.9
Waterloo Region, CA 21.3% 5.5% 13.0% 39.8% 7 6 4 3 65.4
Montreal, CA 18.1% 4.9% 17.3% 40.3% 1 5 9 4 66.2
Toronto, CA 21.2% 5.8% 13.4% 40.4% 5 9 7 5 66.3
Ottawa, CA 21.3% 6.3% 13.1% 40.7% 6 11 6 6 66.9
Monterrey, MX 28.3% 2.2% 11.9% 42.3% 8 1 3 7 69.6
Winnipeg, CA 20.1% 10.0% 13.1% 43.1% 3 17 5 8 70.9
Lexington, US 35.7% 3.9% 17.1% 56.7% 16 3 8 9 93.2
Atlanta, US 32.4% 7.0% 18.3% 57.7% 10 12 11 10 94.9
Youngstown, US 33.0% 6.0% 19.2% 58.2% 12 10 12 11 95.6
Detroit, US 32.3% 7.4% 20.1% 59.9% 9 14 16 12 98.4
Buffalo, US 33.5% 7.2% 19.4% 60.1% 13 13 14 13 98.8
Nashville, US 34.7% 8.4% 18.2% 61.3% 14 15 10 14 100.7
Philadelphia, US 35.6% 5.7% 20.0% 61.3% 15 7 15 15 100.8
Boston, US 37.2% 5.7% 19.4% 62.3% 17 8 13 16 102.3
Houston, US 32.8% 9.4% 20.6% 62.7% 11 16 17 17 103.1

Manufacturing - 2011 Scenario (CDN$ at 80¢)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Vancouver, CA 21.5% 4.6% 8.7% 34.8% 2 4 2 1 62.0
Calgary, CA 21.6% 4.5% 8.8% 34.9% 3 3 3 2 62.1
Monterrey, MX 28.2% 1.6% 8.2% 38.0% 8 1 1 3 67.6
Waterloo Region, CA 22.1% 7.8% 11.1% 41.0% 5 11 5 4 72.9
Toronto, CA 22.1% 8.2% 11.4% 41.7% 4 13 7 5 74.1
Ottawa, CA 22.1% 8.9% 11.2% 42.2% 6 15 6 6 75.1
Winnipeg, CA 20.5% 10.8% 11.0% 42.3% 1 17 4 7 75.3
Montreal, CA 22.5% 7.1% 14.4% 44.0% 7 8 10 8 78.3
Lexington, US 33.9% 3.6% 13.5% 51.0% 16 2 8 9 90.7
Atlanta, US 31.6% 7.6% 14.3% 53.5% 12 9 9 10 95.2
Buffalo, US 31.2% 7.7% 15.5% 54.4% 9 10 13 11 96.8
Youngstown, US 32.1% 6.3% 16.1% 54.5% 13 6 15 12 97.0
Philadelphia, US 33.4% 6.3% 15.9% 55.6% 15 7 14 13 98.9
Nashville, US 33.2% 8.0% 14.5% 55.7% 14 12 11 14 99.2
Detroit, US 31.5% 8.5% 16.2% 56.1% 11 14 16 15 99.9
Boston, US 36.6% 5.9% 15.0% 57.5% 17 5 12 16 102.3
Houston, US 31.5% 10.0% 16.5% 57.9% 10 16 17 17 103.1

The following tables details the results for all 17 cities, sorted in order of ascending TTI. It is purely coincidental that for these sectors the TTI of 100.0 (which represents the U.S. average) also has a TETR of close to 100 percent.

Services - 2011 Scenario (CDN$ at 80¢)
City Effective Tax Rates Ranks TTI 
CIT OCT SLC TETR CIT OCT SLC TETR
Vancouver, CA 25.3% 0.8% 32.9% 59.0% 1 2 2 1 57.7
Calgary, CA 25.3% 4.3% 32.7% 62.3% 1 6 1 2 61.0
Waterloo Region, CA 25.4% 1.2% 42.7% 69.3% 3 3 5 3 67.9
Ottawa, CA 25.4% 1.2% 43.1% 69.7% 3 3 6 4 68.3
Toronto, CA 25.4% 1.2% 44.1% 70.7% 3 3 7 5 69.2
Monterrey, MX 29.3% 5.8% 36.7% 71.8% 8 7 3 6 70.3
Winnipeg, CA 27.3% 12.1% 41.8% 81.2% 7 15 4 7 79.5
Montreal, CA 27.2% 0.0% 54.5% 81.6% 6 1 14 8 79.9
Atlanta, US 35.4% 8.2% 50.5% 94.0% 9 10 11 9 92.1
Youngstown, US 36.0% 8.9% 49.1% 94.0% 11 12 10 9 92.1
Lexington, US 41.1% 7.6% 47.8% 96.5% 16 8 8 11 94.5
Detroit, US 35.4% 8.6% 55.7% 99.7% 9 11 15 12 97.7
Nashville, US 38.3% 14.5% 49.0% 101.8% 13 17 9 13 99.7
Houston, US 37.5% 12.8% 53.3% 103.5% 12 16 13 14 101.3
Buffalo, US 40.0% 11.7% 52.8% 104.5% 14 14 12 15 102.3
Philadelphia, US 42.0% 8.0% 55.9% 105.9% 17 9 16 16 103.7
Boston, US 40.6% 9.7% 58.0% 108.4% 15 13 17 17 106.1

Research & Development - 2011 Scenario (CDN$ at 80¢)
City Effective Tax Rates Ranks TTI
CIT OCT SLC TETR CIT OCT SLC TETR
Calgary, CA -18.7% 10.0% 18.2% 9.6% 1 8 1 1 9.5
Vancouver, CA 0.0% 0.3% 18.2% 18.4% 3 2 1 2 18.4
Montreal, CA -14.2% 0.0% 36.7% 22.5% 2 1 8 3 22.4
Waterloo Region, CA 4.3% 0.4% 26.0% 30.7% 7 3 3 4 30.6
Ottawa, CA 4.2% 0.4% 26.1% 30.8% 6 3 4 5 30.7
Toronto, CA 4.1% 0.5% 26.5% 31.0% 5 5 5 6 30.9
Winnipeg, CA 0.0% 23.6% 27.9% 51.5% 3 16 6 7 51.4
Monterrey, MX 31.5% 5.5% 33.4% 70.4% 8 6 7 8 70.2
Lexington, US 39.3% 12.1% 43.2% 94.6% 16 11 9 9 94.3
Youngstown, US 35.6% 14.0% 45.6% 95.3% 11 13 10 10 95.0
Boston, US 36.2% 11.3% 48.6% 96.0% 12 10 12 11 95.7
Detroit, US 35.0% 10.8% 50.6% 96.4% 9 9 14 12 96.1
Atlanta, US 35.0% 14.7% 49.7% 99.4% 9 14 13 13 99.0
Buffalo, US 37.7% 13.3% 51.0% 102.0% 13 12 15 14 101.7
Philadelphia, US 41.5% 8.9% 51.8% 102.1% 17 7 16 15 101.8
Nashville, US 38.6% 24.0% 47.0% 109.6% 15 17 11 16 109.3
Houston, US 38.0% 20.6% 57.4% 116.0% 14 15 17 17 115.6

Appendix B – 2009 results by manufacturing industry

The following tables details the results of the 2009 Scenario (dollar at par) for individual manufacturing industries. This represents the 2009 equivalent of the table shown on page 11 of this report. For the Ontario cities, the table below highlights in green where the ranking for a specific industry equals or betters that city’s ranking in the manufacturing average, while blue highlights industries where the city’s ranking is below the manufacturing average.

Total Tax Index Comparison, By Manufacturing Industry, 2009 Scenario
(Canadian dollar at par)
City Total Tax Index & (Rank)
Mfg
Avg
Aero space Auto
parts
Chem Products Elect ronics Food Process. Metal Machine Pharma Plastic Products Precision Comp. Telecom Equip.
Calgary 67.5
(1)
64.9
(1)
68.2
(1)
56.8
(1)
66.7
(2)
70.3
(2)
77.8
(2)
61.7
(1)
77.0
(3)
62.4
(1)
48.0
(1)
Montreal 87.3
(5)
93.9
(9)
91.6
(5)
74.9
(4)
86.8
(6)
87.5
(8)
100.4
(13)
76.1
(5)
99.6
(10)
92.3
(8)
69.1
(4)
Ottawa 90.1
(8)
91.1
(7)
96.6
(10)
80.2
(7)
89.7
(8)
87.2
(7)
101.1
(14)
86.4
(8)
100.9
(13)
85.6
(7)
77.8
(8)
Toronto 88.8
(7)
89.9
(6)
94.9
(9)
78.8
(6)
88.7
(7)
86.2
(6)
99.6
(10)
84.8
(7)
99.8
(11)
84.2
(6)
76.3
(7)
Vancouver 71.0
(2)
67.8
(2)
73.4
(3)
63.3
(2)
66.6
(1)
76.2
(3)
83.3
(3)
65.9
(2)
76.8
(2)
64.9
(2)
59.6
(2)
Waterloo Region 87.3
(6)
88.0
(5)
93.1
(7)
78.2
(5)
86.6
(5)
85.1
(5)
98.0
(8)
83.6
(6)
97.5
(7)
82.9
(5)
75.7
(6)
Winnipeg 81.8
(4)
79.8
(4)
80.7
(4)
73.7
(3)
79.2
(4)
84.9
(4)
93.2
(5)
74.8
(4)
90.0
(5)
77.8
(4)
68.5
(3)
Monterrey 72.4
(3)
70.5
(3)
68.5
(2)
86.3
(8)
75.6
(3)
65.3
(1)
68.6
(1)
71.4
(3)
67.5
(1)
68.5
(3)
70.5
(5)
Atlanta 95.2
(10)
94.8
(10)
97.4
(11)
96.0
(13)
94.4
(11)
96.0
(12)
95.3
(6)
93.7
(10)
95.3
(6)
96.4
(10)
96.2
(10)
Boston 102.0
(16)
104.2
(17)
104.9
(16)
99.1
(15)
104.8
(17)
97.6
(13)
103.9
(17)
102.4
(16)
104.0
(17)
102.8
(16)
99.2
(15)
Buffalo 96.8
(11)
98.2
(13)
108.2
(17)
91.9
(11)
96.7
(12)
91.9
(10)
100.1
(11)
100.2
(14)
99.8
(11)
98.7
(13)
98.6
(14)
Detroit 99.9
(15)
101.3
(14)
103.4
(14)
97.4
(14)
101.8
(15)
98.6
(15)
101.3
(15)
98.0
(13)
101.7
(15)
101.4
(14)
98.2
(12)
Houston 103.1
(17)
103.8
(16)
100.3
(13)
105.0
(17)
104.7
(16)
103.2
(16)
100.3
(12)
101.8
(15)
101.5
(14)
106.0
(17)
104.3
(16)
Lexington 90.8
(9)
92.6
(8)
92.8
(6)
89.8
(10)
91.5
(9)
89.2
(9)
90.1
(4)
91.7
(9)
89.8
(4)
95.4
(9)
94.2
(9)
Nashville 99.1
(14)
97.8
(12)
98.4
(12)
99.1
(15)
100.3
(13)
97.9
(14)
97.7
(7)
102.5
(17)
97.9
(8)
96.8
(11)
106.4
(17)
Philadelphia 98.9
(13)
101.5
(15)
104.6
(15)
94.3
(12)
100.6
(14)
94.9
(11)
103.0
(16)
97.5
(12)
102.2
(16)
102.3
(15)
98.4
(13)
Youngstown 97.0
(12)
96.2
(11)
93.9
(8)
88.9
(9)
92.1
(10)
109.3
(17)
98.6
(9)
94.3
(11)
99.1
(9)
98.6
(12)
96.2
(11)

Appendix C – Our approach

Calculation of total tax costs

This report uses two separate measures for total tax costs, with both measures incorporating all manner of taxes levied on corporations – broadly speaking income taxes, capital taxes, sales taxes, property taxes, miscellaneous local business taxes, and statutory labour costs (that is, statutory plan costs and other wage-based taxes).

This total tax cost is compared between cities using a Total Tax Index (TTI) for each location. The TTI is a measure of the total taxes paid by similar corporations in a particular location and industry, calculated as a percentage of total taxes paid by similar corporations in the United States using the following formula:

Total taxes paid by corporations
in this location and industry
——————————————————
Total taxes paid by similar
corporations in the United States

To further examine the results of the TTI, and to explore the specific tax components that drive these results, this study defines a second measure of total taxes, which expresses tax costs as an effective rate, rather than as an index of taxes actually paid. This measure is the Total Effective Tax Rate (TETR), which is calculated as follows:

Total taxes paid by corporations
——————————————————
Standardized net income
before income tax

In calculating taxes, the study includes income taxes levied by all levels of government (national, regional and/or local), reflecting specific tax income rules for each jurisdiction (as discussed in Chapter 4). Other taxes are also calculated according to specific local rules. Labour taxes and other taxes not based on income are calculated to reflect actual business costs in each location, using data on wage rates, real property values, and other relevant business cost factors from KPMG’s 2008 comparison of international business costs, Competitive Alternatives.

In the TETR formula, the denominator is a fixed-dollar (U.S.) amount in all locations – standardized net income before income taxes. This allows income taxes paid to be compared in both absolute dollar terms, using the TTI, and in percentage terms, using the TETR. As explained in Chapter 4, the TETR is the sum of the effective corporate income tax rate (net of incentives), the effective rate of other corporate taxes, and the effective rate of other statutory labour costs. This formula produces the Total Effective Tax Rate, which allows other corporate taxes and statutory labour costs (which are not calculated based on income) to be compared in percentage terms. Rankings obtained using TETR are same as those obtained using the TTI.

Using the formula for TETR, it is possible for TETR to exceed 100 percent, particularly for service and R&D operations. As the table on page 26 shows, this does not mean that government taxes are forcing a company into a net loss situation. Because only income taxes are excluded from net income in the denominator, TETR can exceed 100 percent while the company still maintains a positive net income after tax.

For example, in Houston, the total tax cost for R&D operations is U.S.$1.087,000 per year as compared to net income before income tax of U.S.$937,000, for a TETR of 116.0 percent. However, the company’s net after-tax profit is still U.S.$581,000. This table also illustrates the calculation of the TTI, with the total tax cost in the United States ($940,000) being indexed to 100.0, while the total tax cost in Houston (U.S.$1,087,000) is 15.6 percent higher, with a TTI of 115.6.

This example also shows that, for some operations, it is possible for the TTI and the TETR to be quite close numerically (TTI of 115.6 versus TETR of 116.0 percent). This outcome is an entirely coincidental, resulting from the combination of net income assumptions and calculated tax costs in particular industries. For other industry scenarios, TTI and TETR are numerically very different. However, in all circumstances, rankings obtained using TETR are same as those obtained using the TTI.

Example Calculation of Total Tax Index and Total Effective Tax Rate
Based on R&D sector results1
    USD$'000 per annum
Houston United States
Total revenue2 10,600 10,376
All non-tax operating expenses 8,932 8,836
Statutory labour costs SLC 538 444
Other corporate taxes OCT 193 159
Net income before income tax (standardized)3 NIBIT 937 937
Corporate income taxes CIT 356 337
Net profit after tax 581 600
Total tax cost TTC=SLC+OCT+CIT 1,087 940
Total Tax Index TTI=TTCX/TTCUS x 100 115.6 100.0
Effective rates for:    
Corporate income taxes (net of incentives) =CIT/NIBIT 38.0% 36.0%
Other corporate taxes =OCT/NIBIT 20.6% 17.0%
Statutory labor costs =SLC/NIBIT 57.4% 47.4%
Total Effective Tax Rate TETR=TTC/NIBIT 116.0% 100.3%
1: 2009 Scenario, R&D sector results.
2: Is assumed to vary by location to maintain standard net income before income tax.
This reflects companies being able to charge higher prices for goods and services when located in higher-cost regions. This assumption can be found in some real-world situations, such as higher prices in London, England, and/or premium prices that can be obtained for German-made goods.
3: Standardized for all locations to provide a common denominator for measuring taxes not based on income.

Additional background on the KPMG Competitive Alternatives study

Competitive Alternatives is KPMG’s guide to comparing business locations in North America, Europe, and Asia Pacific. With a primary focus on international business costs, the Competitive Alternatives report measures the combined impact of 27 significant cost components that are most likely to vary by location, as applied to specific industries and business operations. Competitive Alternatives also includes secondary comparisons of other factors that influence the location competitiveness.

The six-month research program for Competitive Alternatives (July 2007 to January 2008) covered 136 cities in ten countries, and included all cities covered in this report. More than 2,000 individual business scenarios were examined, analyzing more than 50,000 items of data. The basis for the business cost comparisons is the after-tax cost of start-up and operation for representative business operations in 12 industries, over a 10-year planning horizon.

A tax supplement, Competitive Alternatives 2008: Focus on Tax, complemented the main report, expanding the coverage of taxation issues. That study and this limited-scope partial update share much of the same methodology, modeling assumptions, and data sources developed for Competitive Alternatives.

Full details of the specific tax rates applied for corporate income tax and other corporate taxes in each jurisdiction are set out in Appendix D of this report.

Further information on study methodology and scope, including key modeling assumptions, can be found in Chapter 1 of Competitive Alternatives 2008.

Full details of data sources used for tax information and the broader business cost factors (such as local wages and property values) that impact this study can be found in Appendix F of the Competitive Alternatives 2008 Volume II report.

These documents are available from: www.CompetitiveAlternatives.com/download

Appendix D – Tax assumptions, comparisons

This appendix presents the tax rate assumptions used in the comparative analysis, along with summary measures of tax burden resulting from the analysis.

In this study, income taxes have been calculated on the “tax payable” basis. Deferred income tax balances (both positive and negative) have been excluded, since these accounting book entries are generally not relevant for location decision making.

All tax rates listed here are current as at January 1, 2009, based on latest information available as at March 25, 2009. Later changes in tax rates announced between March 26, 2009 and July 31, 2009 are referenced in footnotes and incorporated into the analysis of the 2011 Scenario in this report. Taxes are grouped based on substance rather than legal form, and legislated names of specific taxes in certain jurisdictions differ from the generic titles used in this study.

Given the broad scope of this assignment, a number of simplifying assumptions have been made with respect to specific taxes. These simplifying assumptions are consistent with the business model assumptions used in this study.

Land transfer taxes have been incorporated into all land values used in this study, but are not presented in this table. Payroll taxes have been incorporated into statutory benefit costs shown in this report, and are also not presented in this table.

While care has been taken in performing this analysis and developing the findings, the resulting comparisons are of a general nature. All factors examined in this study are subject to change over time. The results of this study should not be used to draw conclusions regarding particular jurisdictions with respect to particular elements of taxation, or regarding the merits of locating any specific facility in one jurisdiction over another. In all circumstances, professional advice should be sought to address any specific taxation or facility location issues.

KPMG shall have no liability or responsibility to any third party who may use or place any reliance on this report.

Canada
Federal, regional, and local tax rates 2009, in percent
   Calgary
AB
Montreal
QC
Ottawa
ON
Toronto
ON
Vancouver
BC
Waterloo
Region
ON
Winnipeg
MB
Corporate Income Tax a
Federal 19.00o 19.00o 19.00o 19.00o 19.00o 19.00o 19.00o
Regional 10.00 11.90 14.00p 14.00p 11.00q 14.00p 13.00r
Local - - - - - - -
Combined Income Tax Rate 29.00 30.90 33.00 33.00 30.00 33.00 32.00
Manufacturing tax rate reduction b    
Federal - - - - - - -
Regional - - 2.00s 2.00s - 2.00s -
Combined Manufacturing Tax Rate 29.00 30.90 31.00 31.00 30.00 31.00 32.00
Effective income tax rate,
12-operation average c
18.81 16.05 23.68 23.61 20.20 23.72 19.54
Capital Tax d
Federal Tax Based On:    
Capital stock - - - - - - -
Net equity - - - - - - -
Total assets - - - - - - -
Regional Tax Based On:    
Capital stock - - - - - - -
Net equity - - - - - - -
Total assets - 0.240t 0.225u 0.225u - 0.225u 0.300v
Sales Tax e
Refundable GST/VAT    
Federal f 5.00 5.00 5.00 5.00 5.00 5.00 5.00
Regional f - 7.50y - - - - -
Non-Refundable Sales Tax    
Regional f - - 8.00w 8.00w 7.00x 8.00w 7.00
Local f - - - - - - -
Property Tax g
Land h 1.80z 3.91 4.23 3.00 1.54 4.81 3.86z
Buildings h 1.80z 3.91 4.23 3.00 1.54 4.81 3.86z
Machinery & equipment i - - - - - - -
Inventory j - - - - - - -
Total property-based taxes: k
7-operation (mfg.) average $2.54 $3.94 $4.70 $4.22 $2.11 $4.02 $3.43
5-operation (non-mfg) average $2.62 - - - - - $1.70
Local Business Taxes
Taxes Based On:    
Gross Receipts l - - - - - - -
Salaries m - - - - - - -
Employees n - - - - - - -
Footnotes:
a Percentage of taxable income. Minor adjustments required in the calculation of taxable income in each jurisdiction are not individually disclosed. Tax rates shown in this exhibit are for the size of entity examined in this study. Many jurisdictions offer lower income tax rates for small businesses.
b Manufacturing tax rate reductions reduce on a pro-rata basis where a significant component of a company’s payroll or capital assets are not devoted to manufacturing or processing operations.
c The 12-operation average effective income tax rates for this study vary from the combined nominal income tax rates in each location due to the impact of adjustments to taxable income and income tax credits.
d Percentage of taxable capital, determined on the general basis indicated. In many jurisdictions, the general tax base indicated here is subject to minor adjustment.
e Percentage of sales price.
f General rate. Other rates may apply to specified articles.
g The Property Tax category includes all property-based taxes, including the property-based component of multi-base local business taxes. Property tax rates relate to the suburban or urban areas identified in the real estate research for this study as offering sites suitable for the types of operation being examined.
h Percentage of current market value, incorporating current tax rates, assessment factors, base-year price equalization and rental yields (estimated where required).
i Percentage of depreciated value.
j Percentage of cost.
k Total property-based taxes in US $ per square foot of building space.
l Percentage of gross sales.
m Percentage of gross payroll.
n Tax per employee.
o Federal tax rate is scheduled to decrease to 18.0% in 2010, 16.5% in 2011, and 15% in 2012 and thereafter.
p Ontario’s 2009 budget (released March 26, 2009) announced plans to decrease the provincial corporate income tax rate to 12.0% on July 1 2010, to 11.5% on July 1 2011, to 11.0% on July 1 2012, and to 10.0% on July 1 2013.
q British Columbia’s tax rate is scheduled to decrease to 10.5% in 2010, and to 10.0% in 2011.
r Manitoba’s tax rate decreased to 12.0% on July 1, 2009.
s Ontario’s 2009 budget (released March 26, 2009) announced plans to decrease the manufacturing tax rate reduction to 1.5% on July 1 2011, to 1.0% on July 1 2012, and to eliminate the reduction from July 1 2013. This rate reduction is being eliminated because the general corporate income tax rate is being reduced such that by July 1, 2013, the income tax rate for both general corporations and manufacturing and processing corporations will be 10%.
t Quebec Capital Tax applies once taxable capital exceeds CDN $1 million. This exemption is reduced by one dollar for every three dollars by which taxable capital exceeds this amount. Manufacturers are exempt. The tax rate is scheduled to decrease to 0.120% in 2010 and to be eliminated in 2011.
u Ontario Capital Tax applies to taxable capital in excess of CDN $15 million. Manufacturers are exempt. The tax rate is scheduled to decrease to 0.150% on January 1 2010, and to be eliminated as of July 1 2010.
v Manitoba Capital Tax applies once taxable capital exceeds CDN $10 million. Manufacturers are exempt. For 2010, the rate will reduce to 0.2% and will apply only to capital in excess of CDN $20 million. The tax will be eliminated for 2011 and later years.
w Ontario’s 2009 budget (released March 26, 2009) announced plans to convert the 8% provincial non-refundable sales tax to an 8% refundable sales tax, harmonized with the federal GST, from July 1, 2010. Businesses with taxable sales in excess of CDN $10 million will not be able to claim input tax credits in respect of provincial taxes paid on energy, certain telecommunication services, road vehicles, food, beverages, and entertainment for five years, and then input tax credits for these items will be phased in over the following three years.
x In July 2009, British Columbia announced plans to convert the 7% provincial non-refundable sales tax to a 7% refundable sales tax, harmonized with the federal GST, from July 1, 2010. Businesses with taxable sales in excess of CDN $10 million will not be able to claim input tax credits in respect of provincial taxes paid on energy, certain telecommunication services, road vehicles, food, beverages, and entertainment for five years, and then input tax credits for these items will be phased in over the following three years.
y Quebec Sales Tax applies to the price of the goods, plus any federal GST applicable on the sale. The 2009 Quebec budget announced plans to increase the Quebec Sales Tax to 8.5% in 2011.
z Incorporates both property tax and property-based business/occupancy tax rates.

Mexico
Federal, regional, and local tax rates 2009, in percent
   Monterrey
Corporate Income Tax a
Federal 28.00
Regional -
Local -
Combined Income Tax Rate 28.00
Manufacturing tax rate reduction b 
Federal -
Regional -
Combined Manufacturing Tax Rate 28.00
Effective income tax rate,
12-operation average c
28.58o
Capital Tax d
Federal Tax Based On: 
Capital stock -
Net equity -
Total assets -
Regional Tax Based On: 
Capital stock -
Net equity -
Total assets -
Sales Tax e
Refundable GST/VAT 
Federal f 15.00
Regional f -
Non-Refundable Sales Tax 
Regional f -
Local f -
Property Tax g
Land h 0.30
Buildings h 0.30
Machinery & equipment i -
Inventory j -
Total property-based taxes: k
7-operation (mfg.) average $0.17
5-operation (non-mfg) average -
Local Business Taxes
Taxes Based On: 
Gross Receipts l -
Salaries m 2.00p
Employees n -
Footnotes:
a Percentage of taxable income. Minor adjustments required in the calculation of taxable income in each jurisdiction are not individually disclosed. Tax rates shown in this exhibit are for the size of entity examined in this study. Many jurisdictions offer lower income tax rates for small businesses.
b Manufacturing tax rate reductions reduce on a pro-rata basis where a significant component of a company’s payroll or capital assets are not devoted to manufacturing or processing operations.
c The 12-operation average effective income tax rates for this study vary from the combined nominal income tax rates in each location due to the impact of adjustments to taxable income and income tax credits.
d Percentage of taxable capital, determined on the general basis indicated. In many jurisdictions, the general tax base indicated here is subject to minor adjustment.
e Percentage of sales price.
f General rate. Other rates may apply to specified articles.
g The Property Tax category includes all property-based taxes, including the property-based component of multi-base local business taxes. Property tax rates relate to the suburban or urban areas identified in the real estate research for this study as offering sites suitable for the types of operation being examined.
Percentage of current market value, incorporating current tax rates, assessment factors, base-year price equalization factors and rental yields (estimated where required).
i Percentage of depreciated value. Special depreciation rates may apply for property tax purposes.
j Percentage of cost.
k Total property-based taxes in US $ per square foot of building space.
l Percentage of gross sales.
m Percentage of gross payroll.
n Tax per employee.
o Effective income tax rates for Mexico incorporate the impact of the Flat Business Tax (IETU) minimum tax regime, which took effect as of January 1, 2008.
p Half exemption applies for new companies for the first year of operation.

United States
Federal, regional, and local tax rates 2009, in percent
   Atlanta
GA
Boston
MA
Buffalo
NY
Detroit
MI
Houston
TX
Lexington
KY
Nashville
TN
Philadelphia
PA
Youngstown
OH
Corporate Income Tax a
Federal 34.00o 34.00o 34.00o 34.00o 34.00o 34.00o 34.00o 34.00o 34.00o
Regional 6.00q 9.50aa 7.10q,r 6.04q,v 1.00q,u 6.00q,s 6.50q 9.99q 1.70q,t
Local - - - - - 2.75 - - 1.00
Combined Income Tax Rate 37.60w,x 40.27w 38.69w 37.99w 34.66w 39.78w 38.29w 40.59w 35.74w,x,y
Manufacturing tax rate reduction b   
Federal 2.04p 2.04p 1.90p 1.92p 2.04p 1.92p 2.04p 1.84p 2.01p
Regional - - 1.03p 0.36p - 0.36p - 0.60p 0.10p
Combined Manufacturing Tax Rate 35.56 38.23 35.76 35.71 32.62 37.5 36.25 38.16 33.63
Effective income tax rate,12-operation average c 32.47 37.36 33.54 32.38 32.84 35.75 34.78 35.71 33.05
Capital Tax d
Federal Tax Based On:      
Capital stock - - - - - - - - -
Net equity - - - - - - - - -
Total assets - - - - - - - - -
Regional Tax Based On:       
Capital stock - - - - - - - 0.189ac -
Net equity 0.030z - 0.150r - - - - - 0.400t
Total assets - 0.260ab - - - - 0.250ad - -
Sales Tax e
Refundable GST/VAT      
Federal f - - - - - - - - -
Regional f - - - - - - - - -
Non-Refundable Sales Tax     
Regional f 4.00 5.00ae 4.00 6.00 6.25 6.00 7.00 6.00 5.50
Local f 2.50 - 4.75 - 1.67 - 2.50 - 1.00
Property Tax g
Land h 1.27 1.99 3.91 2.88 2.60 1.01 1.43 2.43 1.81
Buildings h 1.27 1.99 3.91 2.88 2.60 1.01 1.43 2.43 1.81
Machinery & equipment i 1.27 1.99af - 2.28ag 2.60 0.15 1.07 - -
Inventory j - - - - - 0.42 - - -
Total property-based taxes: k
7-operation (mfg.) average $1.85 $1.76 $2.10 $3.29 $3.58 $0.90 $1.85 $1.87 $1.12
5-operation (non-mfg) average $0.46 $0.72 - $0.82 $0.93 $0.07 $0.38 - -
Local Business Taxes
Taxes Based On:      
Gross Receipts l - - - 0.98q,v - - - - 0.26t
Salaries m - - - - - - - - -
Employees n - - - - - - - - -
Footnotes:
a Percentage of taxable income. Minor adjustments required in the calculation of taxable income in each jurisdiction are not individually disclosed. Tax rates shown in this exhibit are for the size of entity examined in this study. Many jurisdictions offer lower income tax rates for small businesses.
b Manufacturing tax rate reductions reduce on a pro-rata basis where a significant component of a company’s payroll or capital assets are not devoted to manufacturing or processing operations.
c The 12-operation average effective income tax rates for this study vary from the combined nominal income tax rates in each location due to the impact of adjustments to taxable income and income tax credits.
d Percentage of taxable capital, determined on the general basis indicated. In many jurisdictions, the general tax base indicated here is subject to minor adjustment.
e Percentage of sales price.
f General rate. Other rates may apply to specified articles.
g The Property Tax category includes all property-based taxes, including the property-based component of multi-base local business taxes. Property tax rates relate to the suburban or urban areas identified in the real estate research for this study as offering sites suitable for the types of operation being examined.
h Percentage of current market value, incorporating current tax rates, assessment factors, base-year price equalization factors and rental yields (estimated where required).
i Percentage of depreciated value. Special depreciation rates may apply for property tax purposes.
j Percentage of cost.
k Total property-based taxes in US $ per square foot of building space.
l Percentage of gross sales.
m Percentage of gross payroll.
n Tax per employee.
o Marginal tax rate applies if earnings exceed US $335,000 and are less than US $10 million. All US taxable income in excess of US $75,000 is taxed at marginal rates of 34% to 39%. Lower marginal rates (15% to 25%) apply to the first US $75,000 of taxable income.
p Effective impact of 6% tax deduction for Qualified Production Activities Income (QPAI). This deduction is scheduled to increase to 9% from 2010 (giving an effective impact approximately equal to a 3% tax rate reduction for manufacturers from 2010). Benefit at the federal level is reduced where a state also permits the QPAI deduction, as this reduces the federal deduction for state income tax paid. However, in these instances, the effective value of the saving at the state level is also shown, resulting in a higher total rate reduction than in states that do not permit the QPAI deduction. Effective rates shown are further adjusted to reflect the impact of state deductibility of federal and/or state taxes as relevant, to be consistent with the presentation of Combined Income Tax Rate.
q Interstate and export sales from this state are not attributed back to the state-of-origin for the purpose of allocating income between states (no “sales throwback”). For companies with a single main location for operations (as is assumed in this study), this may result in a portion of taxable income not being subject to state income tax. The extent of this benefit depends on the weighting given to the sales factor in each state’s interstate income apportionment formula.
r New York State Franchise Tax is calculated as the greater of 7.1% of taxable income (6.5% for manufacturers) or 0.15% of taxable capital.  Where tax is based on capital, maximum annual tax is US $350,000.
s Top marginal tax rate. Lower rates of tax apply to the first US $5,000 to US $1,000,000 of income, depending on the state. Tax calculations in this study reflected the benefit of lower marginal tax rates as appropriate.
t Corporations pay the greater of Ohio Corporate Income Tax or Ohio Business Franchise Tax (0.4% of net equity). These taxes are being phased out progressively between 2006 and 2010 in favour of a Commercial Activity Tax (gross receipts tax). The Commercial Activity Tax is being progressively phased in between 2005 and 2009. All sales to customers located outside of Ohio are exempt from the Commercial Activity Tax. The rate shown represents weighted average effective rate in effect throughout 2009.
u Texas Franchise Tax based on new “net margin” tax base for 2009 and later years.
v Michigan Business Tax includes both income tax (standard rate of 4.95%) and modified gross receipts tax (standard rate of 0.8%). Rates shown for both portions of this tax include the 21.99% temporary surcharge that applies on top of the standard rate through to 2017.
w In calculating the combined tax rate, the regional and local tax rates have been reduced by (1-Federal tax rate) to recognize the deduction permitted at the federal level for regional/local income taxes paid.
x In calculating the combined tax rate, the regional tax rate has been reduced by (1-Regional tax rate) to recognize the deduction permitted at the regional level for regional taxes paid.
y In calculating the combined tax rate, the local tax rate has been reduced by (1-Regional tax rate) to recognize the deduction permitted at the regional level for local income taxes paid.
z Approximate rate for firms with US $1 million to US $20 million of taxable capital. Actual rates vary based on amount of taxable capital. Maximum annual tax is US $5,000.
aa Massachusetts corporate income tax rate is scheduled to decrease to 8.75 for 2010, 8.25% for 2011, and 8.00% for 2012 and later years.
ab Massachusetts Excise Tax on Capital effectively applies only to inventory and supplies, not total assets. For manufacturing firms, excise tax also applies to machinery and equipment, in lieu of local property tax.
ac Pennsylvania Capital Stock Tax applies to the average of 75% of capital stock and average book profits for the previous five years. The first US $125,000 of taxable value is exempt. Manufacturing and research firms are both exempt from Capital Stock Tax. This tax is scheduled to be reduced to 0.089% for 2010 and be eliminated for 2011 and later years.
ad Tax base is the greater of net worth or real and tangible property.

ae The Massachusetts 2010 Budget (signed June 29, 2009) includes an increase in the state sales tax rate to 6.25% effective August 1, 2009.
af In Massachusetts, machinery and equipment of manufacturing and processing firms are exempt from local property tax.
ag This study incorporates the impact of a Michigan state exemption and refundable tax credit for a portion of property tax paid on manufacturing machinery and equipment.

Appendix E – Disclaimer

This report (“Report”) was commissioned by the Ontario Ministry of Finance pursuant to a consulting services agreement.

Because of its special nature, this report is not suited for any purpose other than to assist the Ontario Ministry of Finance with its understanding of the potential impact of the major tax changes announced in the 2009 Ontario Budget on the tax competitiveness of Ontario as compared to key competing North American jurisdictions and, as such and as agreed in the consulting services agreement, is based on specific scenarios provided by the Ontario Ministry of Finance.  Accordingly, KPMG does not accept any liability or responsibility to any third party who may use or place any reliance on our report.

If this report is received by anyone other than Ontario Ministry of Finance, the recipient is placed on notice that the attached report has been prepared solely for our client for its own use and this report and its contents may not be shared with or disclosed to anyone by the recipient without the express written consent of Ontario Ministry of Finance.  KPMG LLP does accept any liability or responsibility to any third party who may use or place any relevant on our report.  In all circumstance, professional advice should be sought to address any specific taxation issues in any jurisdiction or facility location issues.

This report is based on information collected primarily in August and September 2009 and incorporates changes announced up to July 31, 2009 that take effect in 2009 or at specified later dates. Tax rates and other tax-related information are subject to further change as a result of new legislation, judicial decisions, and administrative pronouncements (not incorporated in this analysis). Exchange rates and other cost factors will change over time.

While care has been taken in performing this analysis and developing the findings, the results are of a general nature, are subject to the disclaimers in this report, and should not be used to draw conclusions regarding particular jurisdictions with respect to particular elements of taxation , or regarding the merits of locating any specific facility in one jurisdiction over another. In all circumstances, professional advice should be sought to address any specific taxation issues in any jurisdiction or facility location issues.

KPMG Report