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MAANNUUFFAACCTTUURRIINNG
A proposition to
PORTALANZA ING.
August 2004
www.investquebec.com
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>
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loans
loan guarantees
working capital.
TABLE OF CONTENTS
A PRO-BUSINESS ENVIRONMENT
AN OPEN ECONOMY
A domestic
market of more
than 410 million
consumers
With the North American Free Trade Agreement (NAFTA), Qubec has
access to a vast domestic market of more than 410 million consumers
representing a GDP (2003) of over US$11.4 trillion.
Close to 85% of Qubecs international exports are shipped to the United
States.
88.9
Ontario
92.1
Canada
91.0
Australia
91.5
United Kingdom
97.6
Italy
98.7
Luxembourg
99.1
France
99.1
United States
100.0
Iceland
103.3
Netherlands
104.0
Germany
Japan
113.9
123.8
Note: The model takes into consideration labor, electricity, transportation and telecommunication costs, interest, depreciation
and taxes.
Source: KPMG 2004, The CEOs Guide to International Business Costs, G7 Edition.
LABOR COSTS
According to KPMG (2004), labor costs in Qubec are, on average, 21% lower
than in the United States. This is due to lower salaries offered in Qubec.
Employers obligations
A fair working
environment
8 days
Annual vacation
Vacation pay
Employment insurance
Manpower training
Labor standards 3
Occupational health and safety
1
2
Minimum wage
Overtime
For businesses with payrolls of $1 million or less, the rate is 2.7%. For
businesses with payrolls of more than $1 million and less than $5 million, the
rate varies between 2.7% and 4.26%. For businesses with payrolls exceeding $5
million, the rate is 4.26%.
ENERGY COST
In Qubec, all forms of energy are plentiful, reliable and available at
competitive price.
Electricity
Eliminado: <sp>
Hydro-Qubecs rates are not subject to the variability of oil and gas prices.
Hence, Qubec electricity rates are among the most competitive and stable in
North America. Currently, Hydro-Qubec has more than 10.4 TWh of power
available for industrial projects. Qubec electricity is a great value.
Electricity rates
are among the
lowest in the
world
68.2
82.9
77.7
81.3
France
89.1
Australia
89.3
United Kingdom
91.7
Luxembourg
93.3
Unites States
Germany
Italy
100.0
127.0
132.0
Japan
Netherlands
173.5
194.4
Source: KPMG 2004, The CEO's Guide to International Business Costs, G7 Edition.
6 kW
750 kWh
17%
14 kW
2,000 kWh
20%
Montral, QC
6,50
5,79
40 kW
100 kW
100 kW
10,000 kWh 14,000 kWh 25,000 kWh
35%
19%
35%
5,46
7,38
6,17
Toronto, ON
8,13
6,99
6,44
10,78
8,51
Boston, MA
15,69
16,01
14,47
19,99
14,47
Source: Hydro-Qubec Comparison of Electricity Prices in Major North American Cities. May 2003.
Exchange rate: CAN$1.00 = US$0.73.
Natural Gas
A competitive
and reliable
source of
energy
Qubec
3,17*
0,11
4,44
0,16
Massachusetts
7,01*
0,25
11,01
0,39
* 2002 averages.
Exchange rate : 2003: US$1.00 = CAN$1.4015; 2002: US$1.00 = CAN$1.5704
Sources: Institut de la Statistique du Qubec, Lcostat, March 2004, and US Energy Information
Administration, Natural Gas Monthly February 2004.
Warehouse
Montral, QC
22.12
3.21
2.85
Toronto, ON
33.25
3.78
3.57
Boston, MA
38.40
5.50
4.80
Source:
Colliers International. North American Industrial Real Estate Highlights and Global Office
Market Survey. April 2004.
Manufacturing
CORPORATE TAXATION
Competitive
corporate tax
rates
The Qubec corporate tax system is one of the most favorable in North
America, low income tax rates work to the advantage of manufacturing
businesses.
Qubecs system is also very competitive concerning job creation and capital
investment.
COMPARISON OF INCOME TAX RATES 2003
Qubec, Other Provinces and American States
Manufacturing Corporations
Effective Tax Rate (%)
Federal
3
4
Qubec
22.12
Ontario
22.12
Provincial/
State
8.90 2
11.00
3
Massachusetts
31.68
9.50
New York
28.74
7.50 4
City/Some
states
TOTAL
Outside city
of reference
--
31.02
--
--
33.12
--
--
41.18
--
46.62
39.88
10.38 5
In Canada, the Federal tax rate is 13.12% for Canadian controlled private
corporations with taxable income below CAN$200,000. Reduced rates may also
apply in certain provinces for small businesses. In the United States, the general
rate of 35% varies according to the revenue of the corporation.
The rate of 8.9% is effective as of March 15, 2003. The former rate of 9.04%
included the contribution to the Youth Fund representing 1.6% of the income tax
payable.
The rate includes 14% surtax.
Corporations are liable for tax on the greater of four bases. The tax on income is
levied at a rate of 7.5%.
New York City. In addition to the city tax of 8.85%, a surtax of 17% of the state tax
(9%) is applicable for business activity in the Metropolitan Commuter
Transportation District. Please note that all corporations will not be subject to all
three taxes.
Corporate Taxation
Remote resource regions consist of the territory in the following administrative
regions:
{
Bas-Saint-Laurent
Saguenay-Lac-Saint-Jean
In Mauricie
Abitibi-Tmiscamingue
Cte-Nord
Nord-du-Qubec
Gaspsie-les-de-la-Madeleine.
COMMODITY TAXES
The Canadian Goods and Services Tax (GST)
The Canadian GST is similar to the value-added tax (VAT), in European Union
member countries. Under this system, a company collects the GST from its
customers, 7% of the selling price for the product or service. However, companies generally receive a refund or credit for GST paid on the purchase of
goods or services used in their business activities. This credit (referred to as
an input tax credit) is available to each person in the production and distribution chain except the final non-business consumer of the good or service.
The total amount of tax collected by a business on sales in a given period,
less the input tax credits for that period, is remitted to the government. If, in
any given period, the input tax credit exceeds the tax collected on sales, a
business will be entitled to a refund equal to the difference.
Qubec Sales Tax (QST)
The QST (7.5%) applies to selling prices, GST included. As with the GST,
firms can usually get a refund for QST paid on their purchases.
To simplify the administration of the consumption taxes, Qubec was the first
province to coordinate its sales tax with the federal GST. Qubec companies
need only deal with only one level of government when it comes to
consumption taxes.
>
>
PASI
A new Strategic-investment support program has been announced by the
Quebec Government on April 1st, 2004. One of the objectives of this program
will be to financially support investment projects that could not otherwise be
carried out. Details should be available shortly.
INVESTISSEMENT QUBEC
(www.invest-quebec.com)
Your one-stop
reference
center to
explore
Qubecs
many features
Investissement Qubec will provide your company with all the advantages of
locating in Qubec and create a made-to-measure package that meets all
your specific needs: financial assistance, workforce training, energy and utilityrelated issues and more. It will even help you find a local partner, if need be.
Jacques Glinas
Project Manager
Investissement Qubec
393 Saint-Jacques Street, Suite 500
Montral (Qubec) H2Y 1N9
Tel.: (514) 873-0439/1-800-461-2433
Fax: (514) 873-4503)
(jacques.gelinas@invest-quebec.com)
10
11
12
2 semanas despus de 1 ao
3 semanas despus de 5 aos
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El COSTE ENERGTICO
En Qubec, todas las formas de energa est abundante, confiable y
disponible en el precio competitivo. Las tarifas Hidra'ulicas-Qubec?s de la
electricidad no estn conforme a la
Electricity rates
are among the
lowest in North
America
6 kW
750 kWh
17%
14 kW
2,000 kWh
20%
40 kW
100 kW
100 kW
10,000 kWh 14,000 kWh 25,000 kWh
35%
19%
35%
Montral, QC
6,50
5,79
5,46
7,38
6,17
Toronto, ON
8,13
6,99
6,44
10,78
8,51
Boston, MA
15,69
16,01
14,47
19,99
14,47
Source: Hydro-Qubec Comparison of Electricity Prices in Major North American Cities. May 2003.
Exchange rate: CAN$1.00 = US$0.73.
Natural Gas
El gas natural la calidad y la confiabilidad del sistema del transporte y de la distribucin del gas
natural de Qubec?s ha hecho esta fuente de energa fcilmente disponible y atractiva. Por lo
tanto, el
14
Empresas
Cosa Exteriores
Dermatus
Portalanza Ingenieres
Sural
Filiales quebequenses
Towertax
Dermatus
Portalanza Metal
Intral
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