The old dipsy doodle

My father used to say that Guy Lafleur was a great dipsy doodler (he also talked about the Savard ‘spinorama’ to describe Serge Savard’s legendary fake a slapshot, spin around and shoot again). In those days, I understood dipsy doodling to be a skill akin to being about the skate delicately around an issue.

So get ready for some dipsy doodling next Tuesday. That’s when KPMG releases their 2006 version of the Canadian government funded study showing the lowest costs to do business in the G-7 (I think they leave ‘8’ – Russia – out of the mix). The Feds pay hundreds of thousands and KPMG conveniently shows that Canada has the lowest costs in the G-7. The problem is that in the 2004 version, KPMG boldly stated that Canada’s cost advantage against the US would hold all the way to a $0.74 CDN = $1.00 US conversion rate – at the time that would be quite a feat. Of course, I found their methodology to be quite flawed and in many cased based on bad source data.

Anyhoo, we are now at $0.82 CDN = $1.00 US. You have to appreciate that Canada has been the lowest cost location in the world in this study since the mid 1990s when it was started. Governments in Canada have paid millions to prove this.

Will the study on Tuesday confirm Canada’s cost advantage? Will we see Lafleur-esque dipsy doodling? Will the reknowned KPMG still find Canada the cheapest in light of their bold statement in 2004? Will Brad return to Jennifer?

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0 Responses to The old dipsy doodle

  1. Anonymous says:

    Can you show in what way their methodology is flawed? I don’t find this suprising at all, think about it.

    Corporate income tax is now lower in Canada at the federal level, most provinces are lower than state levels as well. Energy is still highly subsidized, and health insurance for employers is non existent. Capital costs for resource extractors have been decreasing-especially in forestry (which makes the current ‘crisis’ somewhat suspicious-who wants to bet they just got too much opposition to their plans so had to pull out the old ‘pay up or we’re leaving’ blackmail).

    Labour costs have always been lower in Canada, its well known that canadians work for less money, and also according to stats canada they work far more hours than americans.

    So OF COURSE its far cheaper, the above doesn’t even take into account the huge subsidies that levels of government will simply hand over to companies who are well connected, or considered ‘essential’ (forestry in NB, automaking in Ontario).

    The other G-7 have far higher levels of taxation, and still have the old bureaucratic red tape from when governments used to actually do something. So Canada is easily the cheapest, trouble is, apart from Alberta, how come every province is literally walking a tightrope?