business 41
Key Stats Second highest small business concentration of major cities in Canada. - Statistics Canada, 2016 Among the lowest business bankruptcy rates per capita of major cities in Canada. - Office of the Superintendent of Bankruptcy Canada, 2016 Highest head office concentration of major cities in Canada. - FP500 Database, 2017 In 2015, Calgary had the highest research and development expenditures among its Canadian peers: $826 per capita. - Deloitte, Benchmarking Calgary s Competitiveness, 2015 42
Canada s Competitive Business Climate Canada ranks 1 st in Business Environment in the G7 and G20 The Economist Intelligence Unit, September 2017 Canada is ranks 2 nd in business and 2 nd overall in ease of starting a business in the G20 and 1 st in the G7 for lowest number of procedures and time required to establish a business Forbes, December 2016; Doing Business in 2017, The World Bank Group, 2016 Canada offers the lowest total effective tax rate* of the G7 *Sum of profit taxes, labour taxes and other taxes, PriceWaterhouseCoopers, Paying Taxes 2017 Canada ranks 1 st in potential for investment and growth in its economic infrastructure Global Infrastructure Investment Index, ARCADIS NV Consulting, May 2016 Canada ranks 1 st in Soundness of Banks in the G7 and 2 nd in the world Soundness of Banks World Rank, Global Competitiveness Report, 2017-2018 Canada ranks 1 st on the Global Opportunity Index in the G7 and G20 for economic and institutional factors in attracting FDI Milken Institute, September 2016 Canada ranks 2 nd in Entrepreneurship of the G7 Global Entrepreneurship Index 2017, The Global Entrepreneurship and Development Institute, November 13, 2016 Canada s talent pool is the most highly educated among OECD countries Education at a Glance, OECD, September 2017 Canada ranks 1 st in the G7 in quality of life OECD, June 2016 Invest in Canada, October2017 43
Investment into Calgary De Beers Canada HQ Relocation Hainan Airlines Dominion Diamond HQ Relocation Company News Releases 44
FDI Investment into Calgary 14 FDI Projects in 2016 744 Jobs Created $339m Total Capital Investment Top 10 Companies with FDI Capital Projects ($million) Industry Sector Project Date Datto $104.67 Communications August 2016 DHL Express $69.24 Transportation June 2016 doterra $43.32 Consumer Products June 2016 Bank of Tokyo-Mitsubishi (Canada) $22.04 Financial Services June 2015 Freepoint Commodities $22.04 Financial Services February 2015 PECO Pallet $20.16 Wood Products June 2015 IKEA $15.00 Retail June 2016 Woodside Petroleum (Woodside Energy) $13.52 Coal, Oil and Natural Gas January 2015 VeriClaim $8.14 Financial Services September 2016 ALE Roll-Lift $7.51 Industrial Machinery, Equipment & Tools April 2015 fdi Markets, January 2015 to December 2016; Company News Releases 45
Calgary CMA Businesses by Industry Real estate and rental and leasing, 2,405, 4.2% Professional, scientific and technical services, 11,767, 20.4% Management of companies and enterprises, 435, 0.8% All Industries: Finance and insurance, 1,880, 3.3% Information and cultural industries, 473, 0.8% Administrative and support, waste management and remediation services, 2,666, 4.6% 57,646 Transportation and warehousing, 2,260, 3.9% Educational services, 694, 1.2% Retail trade, 4,936, 8.6% Health care and social assistance, 4,475, 7.8% Arts, entertainment and recreation, 547, 0.9% Wholesale trade, 2,511, 4.4% Accommodation and food services, 3,324, 5.8% Manufacturing, 1,615, 2.8% Other services, 4,093, 7.1% Construction, 6,844, 11.9% Utilities, 97, 0.2% Mining, quarrying, and oil and gas extraction, 1,231, 2.1% Agriculture, forestry, fishing and hunting, 277, 0.5% Public administration, 79, 0.1% Unclassified, 5,037, 8.7% Source: Total with Employees, All Industries 58,780, Statistics Canada, June 2017 46
Calgary CMA Business Establishments by Number of Employees 5-9 Employees 8,817 15.0% 10-19 Employees 5,940 10.1% 1-4 Employees 37,077 63.1% 20-49 Employees 4,138 7.0% 50-99 Employees 1,537 2.6% 100-199 Employees 705 1.2% 500+ Employees 188 0.3% 200-499 Employees 378 0.6% Source: Total with Employees, All Industries 58,780, Statistics Canada, December 2016 47
45.0 40.0 38.9 Small Businesses per Capita Across Canada 37.4 Second highest small business concentration 35.0 34.9 35.1 33.1 30.0 28.9 27.9 25.0 24.5 20.0 15.0 10.0 5.0 0.0 Vancouver Edmonton Calgary Saskatoon Toronto Ottawa Montreal Canada Source: Statistics Canada, CMA Population, 2016 and Canadian Business Counts, June 2017 Less Than 50 Employees (Per 1,000 Population) 48
Number of Self-Employed per Capita (per 1,000 population) Self-Employed per Capita and 10-Year Growth 100 40% 90 80 70 60 50 40 30 20 10 88.2 3.9% 37.8% 73.9 86.6 11.1% 87.9 20.7% 66.1 2.1% 69.7 8.7% 87.6 10.6% 76.3 6.6% 35% 30% 25% 20% 15% 10% 5% 10-Year Growth in Total Number of Self-Employed 0 Vancouver Edmonton Calgary Toronto Ottawa Montreal Alberta Canada 0% Source: Statistics Canada, 2016, per 1,000 Population 49
4,800 (2.7%) 2,100 (2.3%) 3,600 (2.2%) 10,900 (2.1%) 3,000 (4.1%) 6,700 (2.5%) 31,200 (14.4%) 24,000 (10.3%) 20,100 (17.6%) 27,900 (25.0%) 24,600 (24.0%) 19,000 (21.5%) 9,200 (9.6%) 19,800 (14.8%) 13,700 (13.3%) 50,700 (23.6%) 32,500 (24.2%) 32,500 (28.2%) 27,900 (21.9%) 10,900 (8.7%) 17,200 (22.8%) 24,000 (29.0%) 22,100 (21.0%) 9,200 (9.7%) 60,100 (30.9%) 54,100 (18.0%) 46,500 (14.4%) 27,500 (10.3%) 51,400 (10.1%) 82,000 (14.2%) 67,400 (22.9%) 74,500 (26.8%) 62,700 (23.0%) 137,900 (21.2%) 141,300 (27.6%) 125,300 (24.8%) Number of Self-Employed by Age Group 200,000 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Vancouver Edmonton Calgary Toronto Ottawa Montreal Ages: 15-24 Ages: 25-34 Ages: 35-44 Ages: 45-54 Ages 55-64 Ages 65+ Source: Statistics Canada, 2016 50
City of Calgary Business Openings and Closures 4,500 4,000 3,842 3,795 3,500 3,000 2,500 2,674 2,444 2,435 2,000 1,978 1,500 1,000 500 0 Business Closures 5-Year Average (2012-2016) 2016 2017 Note: Exclusive of moves/relocations. Source: The City of Calgary Corporate Economics, October 2017 51
Calgary CMA Number of Business Bankruptcies 450 400 419 350 300 267 250 200 190 176 150 147 100 50 116 95 86 74 41 38 53 45 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD Source: Office of the Superintendent of Bankruptcy Canada, Q3 2017 52
Business Bankruptcy Rates Across Canada 3.5 3.0 3.2 Low business bankruptcy rates 2.5 2.0 1.92 1.86 1.5 1.6 1.26 1.2 1.0 0.8 0.7 0.85 0.82 0.74 0.5 0.5 0.22 0.3 0.25 0.3 0.28 0.24 0.21 0.21 0.41 0.43 0.54 0.41 0.0 Vancouver Edmonton Calgary Saskatoon Toronto Ottawa Montreal Canada 2014 2015 2016 Source: Office of the Superintendent of Bankruptcy Canada, 2016, (Per 1,000 Businesses) 53
Head Offices per Capita (per 100,000 population) Head Offices per Capita Across Canada 14 28.6% 28.6% 35% Highest HQ Concentration in Canada 12 10 8 6 4 2 3.9 1.4-24.0% 15.9% 8.4 4.6-8.3% -11.1% 2.6-7.7% 3.0-4.3% 4.3 1.3-10.8% 1.8 25% 15% 5% -5% -15% 10-Year Growth Rate in Number of Head Offices 0 Vancouver Edmonton Calgary Regina Saskatoon Winnipeg Toronto Ottawa Montreal 2017 Head Offices per Capita 10-Year Growth Rate (2008-2017) -25% Source: FP500 2017 Database, FP500 2008 Database, Statistics Canada, 2016 54
Number of Head Offices Across Canada 300 278 264266 250 200 150 134 124 100 77 92 99 107 83 73 74 50 25 20 19 12 11 11 9 9 8 26 24 24 14 18 18 0 Vancouver Edmonton Calgary Regina Saskatoon Winnipeg Toronto Ottawa Montreal 2008 Number of Head Offices 2016 Number of Head Offices 2017 Number of Head Offices Source: FP500 2017 Database, FP500 2008 Database 55
Taxes Across Canada Competitive Tax Environment No payroll tax, no health care premiums and no PST. Vancouver / British Columbia Edmonton / Alberta Calgary / Alberta Saskatoon / Saskatchewan Winnipeg / Manitoba Toronto / Ontario Ottawa / Ontario Montreal / Quebec 2016 Total Effective Tax Rates (City Level) 35.3% 29.3% 30.1% 31.9% 36.3% 34.1% 37.7% 41.3% Provincial Sales Tax 7% 0% 0% 6%** 8% 8% 8% 9.975% 2016 Provincial Personal Income Tax 5.06% - 14.7% 10% - 15% 10% - 15% 11% - 15% 10.8% - 17.4% 5.05% - 13.16% 5.05% - 13.16% 16% - 25.75% 2017 Provincial Corporate Income Tax (General) 11.0% 12.0% 12.0% 12%** 12.0% 11.5% 11.5% 11.8% 2017 Provincial Corporate Income Tax (Small Business) 2.0%** 2.0% 2.0% 2.0% 0.0% 3.5% 3.5% 8.0% 2016 Provincial Payroll Tax (Employer Health Premiums) 0% 0% 0% 0% 2.15% to 4.3% 0.98% - 1.95% 0.98% - 1.95% 2.7% - 4.26% 2016 Land Transfer Tax 1% - 2% 0% 0% 0% - 0.3% 0% - 2% 0.5% - 2% 0.5% - 2% 0.5% - 3.5% 2016 Local, Provincial & Federal Gasoline Tax 42.17 /L 23 /L 23 /L 25 /L 24 /L 24.7 /L 24.7 /L 33.2 /L 2017 Carbon Pricing* (per tonne of emissions) $30 $20 $20 $18 $18 $18 2016 Health Care Premiums (Annual) $0 - $900 $0 $0 $0 $0 $0 - $900 $0 - $900 $0 - $660 *Ontario and Quebec have cap and trade systems. Source: Trevor Tombe, UCSPP & Maclean's, December 2016 **As per Government of British Columbia Budget, April 1, 2017; Government of Saskatchewan, October 25, 2017; Government of Ontario, November 15, 2017. Sources: Revenue Canada, Government of Alberta, Government of British Columbia, Government of Ontario, Government of Quebec, Government of Saskatchewan, 2016 KPMG Competitive Alternatives: Focus on Tax Report; pwc Tax Facts and Figures, Canada 2016 56
45.0% Calgary's Tax Advantage 41.3% 40.0% 37.7% 35.0% 30.0% 29.3% 30.1% 31.9% 34.1% 35.3% 10.8% 23.0% 25.0% 10.8% 10.9% 11.1% 15.5% 23.6% 20.0% 10.2% 15.0% 4.3% 5.2% 8.8% 6.7% 10.2% 10.0% 5.9% 5.0% 14.2% 14.0% 12.0% 11.9% 14.3% 8.2% 8.1% 0.0% Edmonton Calgary Saskatoon Toronto Vancouver Gatineau (National Capital Region) Corporate Income Taxes Other Corporate Taxes Statutory Labour Costs Montreal Source: KPMG Competitive Alternatives: Focus on Tax Report, 2016 57
Estimated Commercial Property Taxes per $40.00 $35.00 $1,000 of Assessment FIGURES IN THIS CHART ARE CALCULATED BY MULTIPLYING THE COMMERCIAL TAX RATE BY 1000 TO GIVE THE TAXES PAID PER $1,000 OF ASSESSMENT. WHERE MILL RATES ARE APPLICABLE, THE MILL RATE IS MULTIPLIED BY THE MILL RATE FACTOR BEFORE CALCULATING THE RATIO. $37.75 Low commercial property taxes $30.00 $28.63 $26.40 $25.00 $20.00 $19.13 $18.45 $15.00 $13.86 $15.93 $10.00 $5.00 $0.00 Vancouver Edmonton Calgary Saskatoon Toronto Ottawa Montreal It should be noted that The City of Calgary is consolidating the business tax (0.0427) with the non -residential property tax. This is an incremental process, culminating with the elimination of the business tax by 2019. Source: REALpac, 2016 58