#KPMGIgnite Join the conversation Competitive Alternatives Jason Boland Bruce Weatherdon Welcome Jason Boland Partner, Corporate Tax Bruce Weatherdon Partner, Corporate Tax © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Agenda Competitive Alternatives – Overview – Sectors and cost factors – Key findings – The world we live in – What to consider © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Competitive Alternatives: An overview KPMG’s Competitive Alternatives study provides a comparative analysis of the cost of doing business in locations around the world. The strength of this study is the effort that has gone into identifying measurable components that are comparable in all the regions profiled, and allowing the authors to make objective comparisons. Competitive Alternatives 2016 compares business costs in more than 100 cities in 10 countries, including Australia, Canada, France, Germany, Italy, Japan, Mexico, the Netherlands, the United Kingdom and the United States, and determines where businesses might find the most cost effective place to locate. © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Overview Business costs represent one important factor considered in virtually all corporate location decisions. Since 1996, Competitive Alternatives has been providing insight into business location costs in cities and countries around the world, with special focus on North America and leading mature market economies in Europe and Asia-Pacific. The report is designed to provide valuable information to business executives, economic developers and policy makers. This 2016 edition of Competitive Alternatives compares business costs for: – Locations: More than 100 individual cities in 10 countries – Sectors: 19 distinct business operations in the manufacturing and the business to business service sectors – Cost factors: 26 location-sensitive cost factors © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Sectors - services © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Sectors - manufacturing © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Cost factors © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Key findings © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Trends © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Trends © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Labor costs © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Facility costs © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Transportation costs © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Canadian city results Digital 73.2 Services R&D 63.1 Corporate 65.6 83.3 73.1 62.8 65.5 89.9 Charlottetown, PE 83.9 74.8 65.5 64.5 90.2 Quebec City, QC 83.9 70.7 66.2 68.7 90.2 Barrie, ON 84.2 72.9 68.2 69.6 89.9 Halifax, NS 84.5 75.4 66.6 67.5 90.5 Winnipeg, MB 84.9 75.8 66.6 69.9 90.6 Sault Ste. Marie, ON 85.0 72.6 68.2 68.8 91.3 Montreal, QC 85.2 73.3 71.8 73.3 90.3 St. John's, NL 85.4 74.4 69.7 70.8 91.1 Kelowna, BC 85.5 76.2 68.5 69.4 91.2 Toronto, ON 85.6 74.7 72.8 74.5 90.4 Gatineau (National Capital Region), QC 85.8 73.7 70.9 74.0 91.1 Saskatoon, SK 85.9 76.3 69.6 71.7 81.3 Vancouver, BC 86.2 77.6 72.9 73.3 91.0 Edmonton, AB 86.4 77.9 71.3 74.6 91.2 Calgary, AB 87.0 79.3 72.9 76.4 91.4 Overall Result 83.3 Moncton, NB Fredericton, NB Manufacturing 89.7 © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Costs in context © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Site selection factors © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Focus on Tax Measuring tax costs – Total Tax Index – Total Effective Tax Rate Tax Components – Corporate income taxes – Other corporate taxes (property, capital, sales, etc.) – Statutory labour costs (employer portion of pension, unemployment, medical etc.) © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Focus on Tax © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Focus on tax Total Tax Index (TTI) – The United States is considered the benchmark and has a total tax index of 100 – Among the countries studied, Canada has the lowest Total Tax Index (52.4 or 47.6 % lower than the US) – France has the highest Total Tax Index (136.6 or 36.6% higher than the US) – The rankings in 2016 are largely consistent with the 2014 rankings Canadian cities – St. Johns, Newfoundland has the lowest Total Tax Index – Montreal has the highest Total Tax Index – Calgary ranks 5th of major Canadian cities © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. The world we live in – Attitudes and approaches to tax are fundamentally changing – no longer just an expense to be managed – Tax and the issue of paying your fair share is one of the most prominent areas being scrutinized by governments, the general public and, to a great extent, the media – Expectations of transparency are increasing – Tax systems have not kept up with changes in business models and practices © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Our new reality 1. Increase in changes in regulation 2. Increase in transparency amongst tax authorities ‒ Rulings will be shared 3. Increase in reporting requirements on multinational corporations ‒ Public disclosure? 4. Significant rise in tax disputes 5. Continued pressure (especially in Europe) to end “harmful tax practices” © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Regulation BEPS – Eliminate non-double taxation – Revisit Transfer pricing rules, including for digital economy – Increased transparency – disclosure of aggressive tax planning arrangements Domestic laws – Canada – Country By country Reporting, Common Reporting Standard – Australia - 2016 budget introduces new tax integrity measures – US – Inversion Regulations and Proposed Earnings Stripping Regulations – EU – State Aid © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. What to consider 1. 2. Review effective tax rate to peers and statutory rate Review existing tax planning 3. 4. 5. ‒ Consider how it is operating Monitor relationship with the tax authorities Internal controls over tax, including future planning Be ready to tell your story ‒ Public Relations © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Contact us Jason Boland Partner, Corporate Tax T: 403 691-8112 E: jboland@kpmg.ca Bruce Weatherdon Partner, Corporate Tax T: 403 691-7965 E: bweatherdon@kpmg.ca © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. Thank you Download this presentation at: kpmg.ca/ignite kpmg.ca © 2016 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademarks or trademarks of KPMG International. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.