Why Source From Canada?

Competitive labor costs

KPMG’s 2002 business cost study found that Canada’s average labor rates were significantly lower than comparable American rates, and the favorable exchange rate makes them more appealing. For example, positions paying in the range of US$75,000 in the United States are on average more than 30 percent lower in Canada. In addition, surveys show that Canada has North America’s most impressive record for workplace stability and company loyalty. Canadian labor turnover rates are half those of the U.S., which alone translate into labor cost savings of 7%-10%.

Superior workforce and management

On a per capita basis, more Canadians have a university or college education than the citizens of any other country. Not only did the Global Competitiveness Report 2000 rank Canada first in the world at developing knowledge workers but according to a 2001 survey by the Financial Times (UK), eight Canadian business schools are ranked among the top 100 management schools in the world.

Low geopolitical risk

Offering a peaceful and stable political environment, Canada is one of the safest places in the world to live. This has helped Canada create an unmatched business environment.

Cultural compatibility

Canada and the United States share many core values, business practices, and attitudes toward hierarchy, collaboration and risk avoidance. In many cases offshoring requires cultural training of employees, however, Canada’s unique cultural compatibility with the United States eliminates the need for costly and time-consuming cultural training.

Strong quality focus

Numerous Canadian companies are ISO certified and/or have a Software Engineering Institute Capability Maturity Model (CMM) certification.

Substantial government support

The signing of the North American Free Trade Agreement (NAFTA) Integrated the Canadian and U.S. economies for nearly all business purposes. In addition to eliminating tariffs, NAFTA provides procedures for border facilitation and personnel movement. Companies interested in having American staff brought to Canada as part of outsourcing deals will not be encumbered by onerous visa requirements. The Canadian government also provides tax breaks for IT related exports and for businesses setting up processing centers.

Excellent infrastructure

Canada offers cheap power, telecom and real estate. According to the KPMG 2002 study, electricity and natural gas rates average between 31 percent and 36 percent lower in Canada than in the United States. Canada’s competitive deregulated telecommunication framework allows access to high-speed digital communications that enables both IT and BPO offshoring. In fact, Canada’s technological infrastructure is second only to the U.S. among the G-7. Canadian office lease costs are 63% of those in the U.S.

Lower overall business costs

KPMG’s 2002 business cost study clearly demonstrated that Canada’s business costs are the lowest among the G-7. Canada’s after-tax cost advantage ranges from 10 percent for manufacturing to more than 30 percent for R&D. Major Canadian cities – Toronto, Montreal and Vancouver – have lower business costs than any other city of comparable size in North America.

Geographical proximity

Many Canadian production hubs are actually closer to target U.S. markets than American production sites – of Canada’s 20 largest cities, 17 are within an hour and a half’s drive of the United States. Geographic proximity typically eliminates concerns about time zones. This is especially good for outsourcing initiatives that demand lots of interaction with the actual workers or end users. Travel and communication costs as well as travel time are lower than they would be in comparison to more distant countries. Direct air service between major cities in Canada and the U.S. has nearly doubled over the last six years.