Benchmarking Calgary s Competitiveness. December 2015

Transcription

1 Benchmarking Calgary s Competitiveness December 2015

2 Table of Contents Overview Economic Strength Human Capital Innovation and Entrepreneurship Cost of Doing Business Livability Conclusion and Recommendations Executive Summary Introduction Definition Benchmarking Performance Definition Benchmarking Performance Definition Benchmarking Performance Definition Benchmarking Performance Definition Benchmarking Performance Conclusion and recommendations Methodology Competitiveness Framework Selection of Metrics Selection of Peer Cities Economic Power Economic Growth Population Population Growth Unemployment Labour Participation Diversity Research and Development Businesses Single Worker Income Income Tax Commercial Real Estate Rent Industrial Land Price Housing Affordability LEED buildings Health Care Crime Global Access Education Commercial Property Tax Corporate Tax

3 1. Overview

4 1.1 Executive Summary (1/2) For the past several years, cities in Alberta have led economic growth in Canada. Indeed, Calgary s real GDP grew by 32.4 per cent from At the same time, Calgary s population grew by 29.4% resulting in Calgary being home to one of the youngest, most educated and diverse populations in Canada. On a global scale, Calgary punches above it s weight, as seen in the fact that Calgary is the second smallest of the 10 comparator cities selected for this study. While Calgary also scores well in a number of business and quality of life rankings, the city is competing against other cities from around the world in a number of industry sectors. While it is clear that Calgary excels in a number of areas, however, there are other areas that need focused efforts in order to record improvement. The economic downturn that began with a slide in global oil prices in mid-2014 has placed an increased emphasis on diversification in Calgary. Now, more than ever, Calgary needs to clearly understand how we stack up against other city regions, what our strengths are and what we can do to improve to be even more competitive. How Calgary grows and evolves will be determined by policy changes and action plans. The Economic Strategy for Calgary provides a framework for purposeful diversification, shared prosperity and building strong communities. The Strategy places a spotlight on entrepreneurship and innovation and targets transportation and logistics, financial services, energy, clean technologies, renewable energy, agri-food, creative industries and tourism as areas of opportunity. To understand Calgary s competitiveness is to understand, the the condition created when government, industry and Calgarians work together to pursue prosperity. In a globalized world, as Calgary diversifies its economy, the city is increasingly competing with major cities around the world. In August 2015, Calgary Economic Development (CED) engaged Monitor Deloitte to benchmark Calgary against peer cities and using metrics supported by secondary research. The analysis and information presented will be used to develop value propositions in specific sectors, develop general business cases and support specific investment pursuits. 4

5 1.1 Executive Summary (2/2) The five main benchmarking areas of the project, as well as the results from the assessment are economic strength, human capital, innovation and entrepreneurship, cost of doing business and livability. In forming a value proposition for the city, it is clear Calgary performs very well in the areas economic strength and human capital. In the study Calgary ranks first in education, population growth, labour participation and industrial land price and second in GDP per capita and GDP growth. Calgary also scores well in diversity, research and development expenditures per capita and businesses per capita. However, Calgary ranks middle of the pack in other areas, commercial real estate rent, commercial property tax, corporate tax, single worker income, housing affordability, crime and health care. Calgary is among the poorest in the peer group with respect to number of LEED buildings and number of international flights. The Economic Strategy for Calgary has several actions that build on the strengths and address the weaknesses raised in this study. Other areas will require further intervention at various levels of government. The five main benchmarking areas of the project, as well as the results from the assessment are outlined below. Economic Strength Human Capital Innovation and Entrepreneurship Cost of Doing Business Livability Calgary has a superior performance in the two metrics used to assess economic strength Economic Power: 2 nd /11 in GDP per capita (PPP) Economic Growth: 2 nd /11 in GDP growth Despite having a relatively small population, Calgary has a superior performance in most metrics used in the human capital assessment Population: 10 th /11 in total population Population Growth: 1 st /11 in annual population growth rate Unemployment: 5 th /11 in unemployment rate Labour Participation: 1 st /8 in labour participation rate Diversity: 3 rd /9 in percentage of immigrant population Education: 1 st /8 in highest education achieved Overall, Calgary has a good performance in the two metrics when compared to its peer cities in innovation and entrepreneurship Research and Development: 3 rd /8 in annual research and development expenditures per capita Businesses: 3 rd / 10 in number of businesses per 100 people Overall, Calgary has an average performance in most metrics used in the cost of doing business assessment Single Worker Income: 6 th /11 in annual median single worker income Income Tax : 9 th /11 in annual income tax rate Commercial Real Estate Rent: 4 th /9 in commercial real estate rent per square foot Industrial Land Price: 1 st /9 in average industrial land price per square foot Commercial Property Tax : 4 th /8 in commercial property tax rate Corporate Tax: 5 th /11 in annual corporate tax rate Overall, Calgary has an average performance in most metrics when compared to its peer cities in livability Housing Affordability: 5 th /9 in housing median multiple LEED Buildings: 8 th /11 in number of LEED buildings Health Care: 5 th /9 in number of hospital beds per 100K people Crime: 4 th /9 in number of crimes per 100k people Global Access: 6 th /11 in number of international departure flights 5

6 1.2 Introduction Calgary Economic Development (CED) is the lead regional economic development agency with the goal of advancing opportunities for smart growth, leading to high and rising standard of living for Calgarians. CED is leading many of the initiatives from Calgary s 10-year Economic Strategy to to build on our global reputation and foster purposeful diversification of our economy. In August 2015, Calgary Economic Development (CED) engaged Monitor Deloitte to benchmark Calgary against peer cities using metrics supported by secondary research. This benchmarking assessment supports CED s goal to increase foreign investor awareness that will eventually translate into direct investment into the city. In addition, this competitiveness benchmarking assessment will serve CED as a reference to enhance core activities and metrics to further refine Foreign Direct Investment (FDI) strategy. As Calgary s economy diversifies, the city will be participating in more industry sectors that will introduce further competitiveness. As a result, Calgary will continue to compete with cities that have a high energy focus but will increasingly become a contender for cities focusing in other industries. In this assessment, Calgary is being benchmarked against 10 peer cities in the areas of economic growth, human capital, innovation and entrepreneurship, cost of doing business and livability. The analysis and information presented will be used to develop value propositions in specific sectors, develop general business cases and support specific investment pursuits. 6

7 1.3 Methodology Calgary Economic Development (CED) and Monitor Deloitte collectively agreed on the methodology for this study. Through a series of meetings, the list of peer cities and metrics were refined. A team of Deloitte researchers was engaged to perform detailed secondary research to include source of data, date of data and actual data. Only data from reputable sources was included in the analysis, mainly from governmental institutions and statistical agencies. For some metrics, calculations and conversions were performed for a more accurate comparison across cities. A ranking of Calgary s performance and commentary on selected peer cities were provided for each metric. Data was gathered primarily from governmental sources For a metric to be included in the assessment, data must be available for Calgary and at least 6 peer cities A ranking was generated for each metric Additional commentary was provided for selected peer cities for each metric 7

8 1.4 Competitiveness Framework The definition of what constitutes competitiveness slightly differs depending on the topic of comparison. For a company, competitiveness is generally defined as increasing revenue, lowering costs and gaining market share. Given the broad responsibilities that a city has with its citizens and other stakeholders, the definition for competitiveness is subject to many interpretations. Inspired on the definition provided by the Alberta Economic Development Authority, Calgary s competitiveness will be defined for this report as the condition created when government, industry and Calgarians work together to pursue prosperity. The definition of what constitutes prosperity for a city is best understood in terms of economic strength and standard of living (livability). Typically, cities that are considered prosperous will be top performers in both aspects. In order to achieve both economic growth and a higher standard of living, there are key factors that are considered as main drivers. In essence, prosperity is increased by labour effort, that is the number of effective man-hours in an economy, or by innovation. A key factor that goes hand by hand with innovation is entrepreneurship. In terms of Calgary s competitiveness framework, the dynamics of competitiveness are described below. The outcomes of prosperity Economic Strength: Sustained economic growth in the city Livability: Quality of life for the communities in the city The drivers of prosperity Cost of doing business: Cost factors that shape the business environment Human Capital: Intangible collective resources possessed by the individuals in the city Innovation and entrepreneurship: The cultural factors that generate new and improved products and services 8

9 1.5 Selection of Metrics The final list of metrics was confirmed after careful consideration of the themes in the benchmarking. Each selected metric must support the key outcomes and drivers of prosperity. The secondary research involved the summary, collation and/or synthesis of existing and publicly available data. If data for a particular metric was unavailable for Calgary and for at least six peer cities, then the metric was deemed insufficient for comparison and was removed. The following list contains all themes identified with their corresponding metrics. Theme Metrics Economic Strength GDP per capita (PPP) Real GDP growth rate (PPP) Human Capital Population & population growth Unemployment rate Labour participation rate Highest education achieved Percentage of Immigrant population Innovation & Entrepreneurship Total R&D expenditure Number of businesses per 100 people Cost of Doing Business Commercial property tax rate Income tax rate Corporate tax rate Commercial real estate rent Median single worker income Average industrial land price Livability Housing affordability LEED buildings Number of hospital beds per 100k people Number of international departure flights Crime rate 9

10 1.6 Selection of Peer Cities In a globalized world with an increasingly diversified economy, Calgary s competitors are no longer restricted to neighbouring cities or oil and gas economies in the United States. Investors now compare Calgary to many major cities around the world. Quality of life and prosperity rankings often include Calgary in the top performers with cities in Europe, America and Australia. In addition, Calgary s academic and research institutions are increasingly competing for private funding and making alliances in innovative areas with their counterparts in major cities world wide. The criteria for the selection of peer cities was generated at the beginning of the engagement. First, the list included cities that are considered leaders in the areas of focus as outlined in Building on our Energy update to 10 year Economic Strategy. Second, cities with a focus in the energy sector and a view towards diversification were added to the list. Third, cities that are often compared to Calgary in terms of highly skilled immigration were considered as well. Competitors in key economic sectors in which Calgary has had an increasing participation were also added to the list. The list was then further refined to make sure the cities were comparable to Calgary in reported efforts to improve economic strength and quality of life. The final list of peer cities includes: 1. Houston, USA 2. Pittsburgh, USA 3. Brisbane, Australia 4. Rio de Janeiro, Brazil 5. Vancouver, Canada 6. Singapore, Singapore 7. Chicago, USA 8. Atlanta, USA 9. Aberdeen, UK 10. Rotterdam, The Netherlands 10

11 2. Economic Strength

12 2.1 Definition Understanding the economic strength of a city is a key step to generate a clear picture of a city s prosperity and business opportunities. Rankings of the world s best places to live, work and do business are typically always backed up by an analysis of the city s economic strength. The key metric used to measure economic strength is Gross Domestic Product (GDP). GDP is one of the key measures used by policy-makers financial and business institutions to evaluate the economic health of a region. Measuring GDP provides a reflection of the total economic activity of a country, region or city. An increase is GDP is seen as a sign that the economy is doing well, while a decrease would indicate that economy is not working at full capacity. Two dimensions and their corresponding metrics were used to benchmark Calgary s economic strength. Economic power Economic growth GDP per capita GDP growth 12

13 2.2 Benchmarking Performance Calgary has a superior performance in the two metrics used to assess economic strength. Economic power: Calgary ranks as one of the leaders in this area by having the second highest GDP per capita; Calgary s GDP per capita is significantly above the average and the median in the assessment Economic growth: Calgary has demonstrated a significant economic growth by having the second highest GDP growth in the ranking, with a GDP growth that is higher than average and higher than the median in the assessment Economic power Economic growth 2 nd /11 in GDP per capita 2 nd /11 in GDP growth 13

14 GDP per Capita (PPP)(CAD) Economic Power The economic power of a city is the key driver for growth and prosperity. However, economic power must be analyzed by taking into account the population of a city. For this assessment, GDP per capita (PPP) has been used to rank the economic power of the cities being assessed. Of the eleven cities in this ranking, Houston has the highest GDP per capita with 99,762 CAD. Calgary comes second with 92,086 CAD of GDP per capita, followed by Singapore with 88,158 CAD. At the bottom of the list we see Rio de Janeiro with 18,854 CAD per capita. Second last in the list is Aberdeen with a GDP per capita of 52,351 CAD. GDP per capita is calculated by dividing gross GDP by the city s overall population. For international comparisons, GDP is then converted to international dollars using a Purchasing Power Parity (PPP) rate. Purchasing power parity is a rate used to convert currency in a way that eliminates the differences in price levels between economies to equalize the purchasing power of a currency. Calgary is currently ranked as Canada s richest city -The Globe and Mail $120,000 $100,000 $80,000 GDP per capita (PPP) $99,762 $92,086 $88,158 $77,958 $77,608 $69,970 Houston, has for long been considered a leader in economic power with an economy that is highly dependent on the oil and gas market. However, the biomedical research and aerospace industry also constitute significant sectors of the economy. Given the low oil-prices of year 2015, many jobs in the energy sector have been lost. Nevertheless, diversification in the city will be the driver for job creation in the short term. The second leader in the list, Calgary also had job losses in the past year due to the oil price decline. As a result, efficiency, innovation and diversification as key drivers of growth are currently the main topics of conversation in the industry. $60,000 $60,202 $58,449 $55,997 $52,351 $40,000 $20,000 $18,854 $0 Houston Calgary Singapore Pittsburgh Chicago Atlanta Rotterdam Vancouver Brisbane Aberdeen Rio de Janeiro Sources: Aberdeen: Aberdeen City, Stats All Other Cities: Brookings, Global Metro Monitor 2014 Note: Currencies converted into CAD on September 4,

15 GDP growth Economic Growth The economic growth of a city is the key metric used to measure the success of a city s economic goals. Investors will pay special attention and consideration to the economic growth of the a city in terms of GDP growth. Annual GDP growth is calculated as the average of year over year percentage changes in GDP. GDP growth is considered among the most critical indicators that are analyzed in city rankings as it indicates the growth in economic output. Of the 11 cities ranked, Vancouver leads the list with 3.70% of GDP per capita growth. Second, comes Calgary with 3.10% in 2014, compared to At the bottom of the list we see Brisbane and Rio de Janeiro with a GDP per capita decline of -0.40% and -0.20%, respectively. Vancouver experienced a remarkable growth in 2014, as a result of achieving gains across most economic sectors. The manufacturing sector experienced a notable growth, particularly in the shipbuilding industry. According to the Conference Board, Vancouver is expected to grow by 3.1 % in % of Alberta s GDP comes from industries other than the energy industry - CBC news GDP growth 4.00% 3.70% 3.50% 3.00% 2.50% 3.10% 2.50% 2.00% 1.50% 1.80% 1.60% 1.50% 1.00% 0.50% 0.00% 0.70% 0.30% 0% -0.20% -0.40% -0.50% -1.00% Vancouver Calgary Aberdeen Singapore Houston Atlanta Chicago Rotterdam Pittsburgh Rio de Janeiro Brisbane Sources: Aberdeen: Aberdeen City, Stats All Other Cities: Brookings, Global Metro Monitor

16 3. Human Capital

17 3.1 Definition The term human capital is used to refer to the intangible collective resources possessed by the individuals of a given population. These collective resources include all the skills, talents, abilities, education, judgement, wisdom and knowledge possessed by the individuals. These resources represent a form of wealth available to each particular city to accomplish their goals. A direct goal that is associated to the human capital is the generation of material wealth for the economy. A detailed view of the human capital is critical for the management of a city s productivity goals. While natural resources play a key role in the economic growth and stability of a city, no economic goal can be achieved without competent human capital. In addition, human capital is becoming increasingly important as it is seen as the key factor that links innovation, growth and competitiveness in a globalized world. A clear perspective of the present human capital characteristics can help the government of a particular region take the needed measures to further develop its population. In the same way, multinational corporations and international investors require this information in order to make investment decisions involving the human capital of a location as a resource or as the target market. There are numerous data points used to assess the human capital of a city; most analysis will be focused on the particular characteristics needed by the interested parties. For instance, IT outsourcing companies will be mostly interested on the technology skills and education of the population. There are however, key metrics that most interested companies and individuals will look for and they have been included in this assessment. Six dimensions and their corresponding metrics were used to benchmark Calgary s human capital. Population Population growth Unemployment Labour participation Diversity Education Total population Annual population growth rate Unemployment Rate Labour Participation Rate Percentage of immigrant population Highest education achieved 17

18 3.2 Benchmarking Performance Despite having a relatively small population, Calgary has a superior performance in most metrics used in the human capital assessment. Population: Calgary has the second smallest population of the list of cities ranked with a population of 1.4 million compared to an average of 5 million per city in the list Population growth: Calgary is the top performer in population growth as its economy has for long been considered a preferred destination for immigrants looking for high-paying jobs Unemployment: Calgary s unemployment rate is below the average and below the median for all peer cities ranked Labour participation: Calgary is the top performers, with a high labour participation rate that is above the average and the median Diversity: Calgary is one of the top performers, with a high percentage of immigrant population that is above the average and the median Education: Calgary is the top performer, with a high percentage of its population holding at least one bachelor s degree, with a rate above the average and the median Population Population growth Unemployment Labour participation Diversity Education 10 th / 11 in total population 1 st / 11 in annual population growth rate 5 th /11 in unemployment rate 1 st /8 in labour participation rate 3 rd /9 in percentage of immigrant population 1 st /8 in highest education achieved 18

19 Population (Millions) Population The population size of the a city is one of the key indicators for any human capital assessment. Generating a comparable population view across the cities requires the delineation of population limits in advance, since the results depend very much on the criteria used. For this assessment, the population limits were placed around the Census Metropolitan Area (CMA). By definition, a CMA is formed by one or more adjacent municipalities centred on a population centre. For a municipality to be included in the CMA, it must have a high degree of integration with the core. There are several ways to measure this integration, a key one is by measuring commuting flows derived from place of work data. Understanding population size will enable a further understanding of several key population factors such as population growth fluctuations, market opportunities, required infrastructure and public services Total CMA population 12.5 M 9.6 M Of the eleven cities in this ranking, Rio de Janeiro is the most populous with 12.5 million people. Closely, in second place we find Chicago with 9.6 million people. The smallest cities in the list are Aberdeen with 228,990 people in Calgary is found as the second smallest city in the ranking with 1.4 million people. The top city in this ranking, Rio de Janeiro is considered one of the world s mega-cities with a population exceeding 10 million people. With a population density of 16,100 people per square mile (6,200 per square kilometer), Rio de Janeiro is one of the most densely populated areas in the Latin America and the world. Rio is more than twice as dense as Toronto and Los Angeles, the most dense Canadian and US urban areas. Calgary is the 4 th most populous CMA in Canada M 6.4 M 5.6 M 5.5 M M 2.4 M 2.3 M 1.4 M 0.2 M Rio de Janeiro Chicago Rotterdam Houston Atlanta Singapore Vancouver Pittsburgh Brisbane Calgary Aberdeen Sources: Aberdeen: Aberdeen City, 2014 Population All Other Cities: Brookings, Global Metro Monitor

20 Population growth rate Population Growth Population growth is measured by using the annual population growth rate of each city. This rate is the percent increase in a year as a fraction of the initial population. The factors that affect the population growth rate of a city are mainly three: birth rate, death rate and net migration. Birth rate is defined as the number of live births per thousand of population annually. Death rate is then the number of deaths per one thousand people per year. Lastly, net migration is calculated as the total number of immigrants less the annual number of emigrants. Calgary leads this ranking with a population growth rate of 3.6% annually in Singapore and Houston come next with a rate of 2.9% and 2.8%, respectively. On the other side of the spectrum, Pittsburgh is found with a negative growth of -0.4%, indicating a slight population decline. Calgary s population growth is directly related to its positive net migration as it constitutes almost 2/3 of the entire population increase. Except for year 2010, the key driver for population growth in the past decade has been the influx of immigrants into the city. This figure has been directly related to an increased market demand through the creation of more jobs. In 2014, Calgary was ranked the fastest growing city in Canada - Forbes 4.0% 3.5% 3.0% 2.5% Population growth rate 3.6% 2.9% 2.8% 2.3% 2.0% 1.5% 1.0% 0.5% 1.7% 1.3% 1.2% 1.0% 0.7% 0.5% -0.4% 0.0% -0.5% -1.0% Calgary Singapore Houston Aberdeen Brisbane Vancouver Rio de Janeiro Rotterdam Chicago Atlanta Pittsburgh Sources: Calgary and Vancouver: Statistics Canada Singapore: Singapore National Population and Talent Division, 2014 Population in brief Houston, Chicago, Atlanta: CityMayors Statistics, Fastest growing US cities Aberdeen: Aberdeen City, 2013/14 Economic Output Brisbane: Business Insider Australia Rio de Janeiro: Forbes / Washington, World s fastest growing Megacities Rotterdam: Statistics Netherlands, Population growth rate Pittsburgh: Pittsburgh Post-Gazette, Census Estimate 20

21 Unemployment rate Unemployment The unemployment rate of a city is calculated as a percentage by dividing the number of unemployed individuals and are looking for a paid job by all individuals currently in the labor force. When an economy is in recession, a rise in the unemployment rate is expected. Typically, high unemployment hurts economic growth in terms of GDP and labour productivity. As a result, it is linked to high poverty rates, income inequality, crime, homelessness and poor health conditions. The leader in this ranking is the city of Aberdeen, Scotland with an unemployment rate of 1.8%. Singapore follows closely with rate of 2.0%. Calgary is found on the fifth place with an rate of 5%. At the bottom of the ranking, we find Rotterdam with a high unemployment rate of 14%. The low unemployment rate in the city of Aberdeen is a direct result of the jobs generated by the oil and gas industry. The city of Aberdeen also has the highest concentration of millionaires in the United Kingdom. At the same time, Aberdeen is the top city for wage inequality in the United Kingdom. Compared to other cities in the Netherlands, Rotterdam is composed by a young population of migrants. A high percentage of this population is low-skilled and given the characteristics of the job market in the Netherlands, they experience a hard time finding a job. In the past years, the government has made efforts to reduce this unemployment rate by providing the youth with an education that combines training and practical learning forms. 16.0% 14.0% Unemployment rate 14% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 1.8% 2.00% 4.20% 4.50% 5.00% 5.20% 5.40% 6.00% 6.00% 6.00% 0.0% Aberdeen Singapore Brisbane Houston Calgary Rio de Janeiro Pittsburgh Vancouver Chicago Atlanta Rotterdam Sources: : Aberdeen: Aberdeen City, 2013/14 Economic Output Singapore: Singapore Government, Singapore Unemployment Rate Brisbane: Australian Government, Department of Employment, Queensland Unemployment Houston, Pittsburgh, Chicago, Atlanta: United States Department of Labor, Unemployment Rates for Metropolitan Areas Calgary and Vancouver: Employment and Social Development Canada Rio de Janeiro: Valor Economico Vancouver: Government of Canada, Employment and Social Development Rotterdam: I AM EXPAT, Where is Dutch unemployment the highest 21

22 Labour participation rate Labour Participation Labour participation is measured by calculating the labour participation rate which represents the percentage of working-age individuals that are currently employed or unemployed but looking for a job. Workingage individuals are typically defined as those between the ages of 15 and 64. For a particular city, understanding labour participation is important as it shows the city s production capability and job market trends. Leading this ranking we find Calgary with a 75.2% labour participation rate. Very closely, in second place, we have Brisbane with a rate of 74.7%. At the bottom of the ranking, we have Vancouver with rate of 64.9%. 76% 74% Labour participation rate 75.20% 74.70% The high participation rate of Calgary and Brisbane is explained by a strong labour market that not only has low unemployment but that encourages people to keep on looking for job if they are not working. The labour participation rate generally falls when market conditions discourage unemployed working-age individuals to look for a job. Vancouver and Chicago s lower participation rate could be explained by this fact. In addition, both cities have the same unemployment rate which is relatively higher than that of most cities in this assessment. Calgary has the largest labour participation rate of all CMAs in Canada - Statistics Canada 72% 70% 68% 66% 68.00% 67.50% 67.30% 66.10% 65.60% 64.90% 64% 62% 60% 58% Calgary Brisbane Singapore Houston Atlanta Pittsburgh Chicago Vancouver Sources: Calgary and Vancouver: Government of Canada, Statistics Canada, Employment and Unemployment Brisbane: Australian Government, Department of Employment, Participation Rate Singapore: The World Bank, Labor force participation rate Houston, Atlanta, Pittsburgh, Chicago: United States Department of Labor, Laborforce participation rates 22

23 % of immigrant population Diversity Diversity in this assessment is defined as diversity of national origin, taking into account the implications that this has in ethnic background, religion, languages and other cultural aspects. In the past decade, higher attention has been given to the benefits of a diverse economy and workplace. In essence, diversity influences productivity as it combines different sets of skills and abilities. Studies have shown that a culturally diverse workforce improves work teams productivity, workplace equality and ultimately the bottom line. As a reflection of this diversity, the percentage of immigrant population across peer cities was compared. This percentage of immigrant population indicates the total population that was born in a foreign country but that resides in the city under different circumstances. Singapore leads this ranking with 43% of its population born abroad. Vancouver follows in second place with 40% of immigrant population. Calgary is in third place with 26% of immigrant population. At the bottom of the ranking, we find Pittsburgh with only 7% and Atlanta with 14%. Singapore has been traditionally closely intertwined with migration, given its location and historical background. In more recent years, however, Singapore has had an increasing percentage of foreign born residents. This is a direct consequence of governmental policies to attract and rely on foreign manpower as a strategy to overcome limitations of local human capital. Most immigrants come from Malaysia, China, Hong Kong and other Asian countries. 50% 45% 40% 35% Percentage of immigrant population 43% 40% 25% of Calgary s population speak a foreign language as a mother tongue with Punjabi, Chinese and Spanish as the most spoken -Statistics Canada 30% 25% 26% 24% 23% 20% 15% 16% 16% 14% 10% 5% 0% Singapore Vancouver Calgary Brisbane Houston Chicago Aberdeen Atlanta Pittsburgh 7% Sources: Singapore: United Nations, Department of Economic and Social Affairs, Population Division Vancouver and Calgary: Statistics Canada Brisbane:.id, Immigration in the last 5 years Houston: Migration Policy Institute, A Profile of Immigrants in Houston Chicago, Atlanta: Atlanta Regional Commission, Regional Snapshot, March 2013 Aberdeen: Work Permit.com, Scotland's immigrant population doubles in a decade Pittsburgh: Pittsburgh Post-Gazette, Pittsburgh looking to increase immigrant population 23

24 Percentage with bachelor's degree Education In the 1990s, special attention was given to the macroeconomic implications that investment in education represented. Studies indicated that education is the main driver for labour productivity and levels of technological maturity in a country. As a result, education is a key component of human capital. There are different indicators that can be compared to understand the position of a city in the area of education. Since the universities and academic institutions in all the countries compared in this study grant bachelor s degree, the percentage of population (25 years old and older) with bachelor s degree was used as the comparable metric. While the percentage across cities is not as dramatically different as other metrics, Calgary tops this ranking with 34.8% of population with a bachelor s degree. Atlanta and Chicago follow closely with 34.5% and 34.2%, respectively. Pittsburgh, on the other hand, reflects a lower level of education with only 19.8% of its population with a bachelor s degree. Data for Rio de Janeiro, Aberdeen and Rotterdam was not available. Of all major Canadian cities, Calgary has the second highest level of educational attainment. Calgary is home to five public post-secondary institutions, including two major Universities. A key characteristic among these institutions is the high degree of collaboration and mutual support with the city s professional, business, technology and non-profit communities. 40% 35% 30% Bachelor s degree (percentage of population) 34.80% 34.50% 34.20% 34.10% 30.90% Calgary is home to internationally recognized MBA and Engineering programs -Financial Post 27.70% 25% 20% 20.00% 19.80% 15% 10% 5% 0% Calgary Atlanta Chicago Vancouver Houston Singapore Brisbane Pittsburgh Sources: Calgary, Vancouver : Government of Canada, Statistics Canada, Education in Canada Atlanta : Atlanta Regional Commission, Regional Snapshot Chicago : United States Census Bureau, Quick Facts Houston : Greater Houston Partnership, Education Attainment Singapore : Department of Statistics Singapore, Census of Population Brisbane : Visit Brisbane, Brisbane's Demographics Pittsburgh : Pittsburgh Today, Education Attainment 24

25 4. Innovation and Entrepreneurship

26 4.1 Definition Innovation and entrepreneurship are drivers of prosperity and growth in any economy. As competition in the globalized world becomes increasingly tougher for new entrants, success is highly dependent on their ability to innovate. Many believe that entrepreneurship is a personality trait; however, entrepreneurship can be better defined as a desire to take risks, establish, organize and manage a business venture in a globalized marketplace that is constantly evolving. This desire to take risks combined with an innovative business idea is essential for the growth of a business, and correspondingly an economy. A good understanding of innovation entrepreneurship in an economy provides a clearer view of the potential for an economy to prosper. Given the dynamism of the two concepts, there are no standard metrics used to measure them. Nevertheless, there are metrics that provide some insight into how these two concepts are being established and promoted in an economy. Two dimensions and their corresponding metrics were used to benchmark Calgary s innovation and entrepreneurship. Research and Development Number of Businesses Annual research and development expenditures per capita Number of businesses per 100 people 26

27 4.2 Benchmarking Performance Overall, Calgary has a good performance in the two metrics when compared to its peer cities. Research and Development: Calgary has a good performance in annual R&D spending per capita with a number that is higher than the average and the median compared to its peers Businesses: Calgary has a good performance is above the median among its peers when compared by number of businesses per 100 people Research and Development Number of Businesses 3 rd / 8 in annual research and development expenditures per capita 3 rd / 10 in number of businesses per 100 people 27

28 R&D per capita ( CAD) Research and Development (R&D) In an economy, innovation is expected to be proportional to the amount invested in research and development (R&D) combined with strategic alignment and a culture that supports and drives innovation. Research and development expenditure sources can be categorized into either public (government spending) or private (corporate spending). The recipients of R&D are generally companies and institutions in association or individually. In order to gather R&D data, national statistical offices generally survey the private and public sectors at the state or provincial level. For this study, data for both private and public sectors were aggregated and converted into per capita amounts. Singapore tops the ranking with an annual R&D spending of 1,389 CAD per capita. Chicago appears in second place with an amount of 935 CAD per capita. Calgary is in third place with 826 CAD per capita. Atlanta is found at the bottom of the list with 380 CAD of R&D expenditure per capita. According to the National Survey in Research and Development in Singapore, R&D investment from both public and private entities has had a rapid growth as a result of an increasing focus to undertake R&D to grow competitive businesses and as reflection of the growing innovation capacity of the local enterprises. $1,600 $1,400 Total reported annual R&D spending per capita $1,389 $1,200 $1,000 $800 $600 $935 $826 $821 $760 $635 $568 $400 $380 $200 $- Singapore Chicago Calgary Brisbane Pittsburgh Vancouver Houston Atlanta Sources: Singapore: Agency for Science, Technology and Research Singapore, National Survey of R&D in Singapore 2013 Chicago, Pittsburgh, Houston, Atlanta: National Science Foundation, Domestic R&D Calgary, Vancouver: Statistics Canada, Domestic spending on research and development (GERD) Brisbane: Australian Government Department of Industry and Science, Focusing Australia's Publicly Funded Research Review. Note: Currencies converted into CAD on September 4,

29 Businesses per 100 people Businesses When a culture fosters innovation and entrepreneurship, people will be more likely to establish and manage their own business. In the same way, business growth will encourage further entrepreneurship and attract further investment. In order to understand the effects of a culture of innovation and entrepreneurship, the number of businesses per capita was calculated across cities. Some statistical agencies will report the number of businesses per capita on an annual or quarterly bases. However, most cities will provide the total number of registered businesses. To calculate this number, the total reported businesses, including large companies and small businesses was divided by the population of the CMA. The per capita number was then scaled up to 100 people. The top contender in this ranking is Houston with 5.9 businesses per 100 people. Rotterdam comes in second place with a rate of 5.2 businesses per 100 people. Calgary is found in third place and is above the median of this ranking with 4.2 business per 100 people. The cities with the lowest numbers are Pittsburgh and Brisbane with 2.5 and 2.1 businesses per 100 people, respectively. 7.0 Number of businesses per 100 people Houston Rotterdam Calgary Aberdeen Vancouver Atlanta Singapore Chicago Pittsburgh Brisbane Sources: Houston: United States Census Bureau, 2013 MSA Business Patterns Rotterdam: Statistics Netherlands, Local units by municipalities Calgary, Vancouver: Statistics Canada Aberdeen: Scottish Government National Statistics, Businesses in Scotland 2013 Atlanta: Info USA, Business Counts Singapore: Department of Statistics Singapore, Profile Of Enterprises In Singapore Chicago: City of Chicago, Existing Businesses Pittsburgh: United States Census Bureau, QuickFacts Brisbane: CCIQ, Brisbane Local Government Area Business Analysis 29

30 5. Cost of Doing Business

31 5.1 Definition The costs of doing business in a city can be defined as the aggregate costs incurred as part of setting up and/or operating a business. Examples can include expenditures associated with employing a workforce, procuring office space, and navigating tax environments. The extent of these costs (and their affordability to businesses) helps to indicate the business friendliness of a city and can change based on political, economical or social factors. For instance, competitive tax rates and reduced operating costs are important levers that cities can use to incentivize businesses to relocate, expand or start in a city. For this reason, particular importance is given to these costs set by public entities with the goals to promote investment in a particular city or region. When assessing the particular affordability of establishing a business in a city, organizations will most likely focus on general as well as specific costs that are generally incur by the industry in which they operate. These not only include salaries for workers in the particular industry but also materials and services needed for the operations of that type of business. Nevertheless, there are key metrics that the industry as whole will take into account when making investment decisions. Six dimensions and their corresponding metrics were used to benchmark how Calgary compares to its peer cities with respect to the cost of doing business. Single Worker Income Income Tax Commercial Real Estate Rent Industrial Land Price Commercial Property Tax Corporate Tax Annual median single worker income Annual income tax rate based on median single worker income Commercial real estate rent per square foot Average industrial land price per square foot Commercial property tax rate per $100 Annual corporate tax rate 31

32 5.2 Benchmarking Performance Overall, Calgary has an average performance in the majority of the six metrics when compared to its peer cities. Single Worker Income: Calgary boasts one of the highest median income levels in the country. From a business point of view, this translates to a high employee cost. Compared to the peer cities, Calgary is slightly below the average in median single worker income Income Tax: Calgary s income tax rate is higher than most of that of its peers Commercial Real Estate Rent: Calgary has relatively affordable commercial real estate rent and is on the low-end when compared to its peers Industrial Land Price: Calgary has the most affordable industrial land price when compared to its peers Commercial Property Tax : Calgary is fairly competitive with respect to commercial property tax rate per $100 of assessed value Corporate Tax: Calgary s corporate tax rate is slightly lower than the average and is below the mean compared to its peers Single Worker Income Income Tax Commercial Real Estate Rent Industrial Land Price Commercial Property Tax Corporate Tax 6 th / 11 in annual median single worker income 9 th / 11 in annual income tax rate based on median single worker income 4 th / 9 in commercial real estate rent per square foot 1 st / 9 in average industrial land price per square foot 4 th / 8 in commercial property tax rate per $100 5 th /11 in annual corporate tax rate 32

33 5.2.1 Single Worker Income Single worker income is a key metric needed to understand labour costs that are incurred in order to produce specific goods or provide specific services to customers. In investment decisions, single worker income plays a key role when determining which locations should be selected to outsource goods manufacturing or services. Typically, the lower the single worker income, the lower the direct labour costs. The particular characteristics of the human capital, such as technical expertise, however, are also key inputs in decision making. To be able to benchmark single worker income across peer cities, the most recent available data for median single worker income per city was used. This income is reported as the overall median for workers taking all industries into account. More granular data exists for specific industries for which the median could differ highly from the overall median. Of the eleven cities in this ranking, Rio de Janeiro has the lowest median for single worker income with the equivalent of 15,614 CAD, annually. Rotterdam follows in second place with a significantly higher median income of 32,926 CAD. Calgary comes in sixth place with a median single worker income of 56,969 CAD, annually. Aberdeen has the highest median single worker income with 72,764 CAD, annually. Rio de Janeiro has a low single worker income in part given its high labour supply and regional location. Brazil has experienced a significant increase in minimum wage over the past 5 years. Beginning with a monthly minimum wage of 545 BLR (187 CAD) in 2011 to the current 788 BLR (270 CAD) in On a state level, Rio de Janeiro has the highest monthly wage floor in the country with BRL ( 327 CAD) set as the minimum. The median single worker income data reflects gross income before all taxes and deductions. These salaries have been directly converted into Canadian dollars and do not include any PPP adjustments. $80,000 $70,000 $60,000 Median single worker income $56,019 $56,969 $61,840 $63,390 $67,032 $67,257 $72,764 ( CAD) $50,000 $40,000 $32,926 $42,346 $42,439 $30,000 $20,000 $15,614 $10,000 $- Rio de Janeiro Rotterdam Vancouver Singapore Atlanta Calgary Pittsburgh Houston Brisbane Chicago Aberdeen Sources: Rio de Janeiro: IBGE, Statistics Central Register of Enterprises 2012, rio negocios, Doing Business in Rio, Second Edition 2014 Rotterdam: NUMBEO, Cost of Living in Rotterdam, Netherlands Vancouver: BCStats, Labour and Income, Earnings and Employment Trends Singapore: Singapore Government, Ministry of Manpower, Summary Table Income Atlanta: Georgia Power Community and Economic Development, Metro Atlanta Overview Calgary: Conference Board of Canada, Metropolitan Outlook 2014 Pittsburgh: Pittsburgh Regional Alliance, Pittsburgh Region by the Numbers Houston: Payscale, Average Salary for City of Houston, Texas Employees Brisbane: Australian Bureau of Statistics, Average Weekly Earnings, Australia, Nov 2014 Chicago: United States Department of Labor, Bureau of Labor Statistics, Occupational Employment and Wages in Chicago May 2014 Aberdeen: Aberdeen City Council, Aberdeen Key Facts 2014 Currencies converted into CAD on September 4,

34 Income tax rate Income Tax Coupled with the single worker income, the income tax rate is a key input used during investment decision making. Although the burden is mainly placed on the worker, employers must take this rate into account, for instance, to generate a competitive salary offer to attract qualified individuals. The most common federal income taxation system is the progressive tax system. In essence, a progressive tax system will demand a larger percentage of income from high-income groups than from lowincome groups. Typically, countries will set levels or brackets of income taxation, as income increases, the tax rate increases. At the state and province level, both flat tax rates and progressive are used depending on the regulations in place. Leading the ranking with an effective income tax rate of 1% is Singapore. Rio de Janeiro is found in second place with a tax rate of 6.44%. Calgary is found in ninth place with a tax rate of 20.2%. At the bottom of the ranking, Rotterdam reflects a 33.41% of effective income tax rate. The average for the 11 peer cities compared is 16% as effective income tax rate. Singapore is known for its low income taxes. The country uses a progressive tax system in which the first 22,000 SGD (20,000 CAD approx.) are not taxed. The first three tax brackets are between 2% and 3.5% and the top tax bracket is set at 20%. Additionally, significant tax deductions are provided for applicable expenses and dependents. In order to compare tax rates across cities, the effective income tax rate was used. This effective tax rate is the net rate a single worker pays if all forms of taxes are included and divided by median single worker income. This calculation does not include dependent, age, or additional tax reductions. 40% 35% 30% Effective income tax rate 33.41% 25% 20% 15% 13.00% 14.00% 15.10% 15.67% 17.35% 18.00% 20.20% 20.80% 10% 5% 0% 1.00% Singapore 6.44% Rio de Janeiro Houston Aberdeen Vancouver Pittsburgh Chicago Atlanta Calgary Brisbane Rotterdam Sources: Singapore: Hawksford, Singapore Personal Income Tax Guide, Inland Revenue Authority of Singapore, Individual Income Tax Rio de Janeiro: Brazil's federal revenue, IRPF 2015, Effective tax rate simulation Houston: Texas Comptroller of Public Accounts, Texas Franchise Tax Rates Houston, Pittsburgh, Chicago: Forbes, IRS Announces 2015 Tax Brackets Aberdeen: Citizens Advice Scotland, Income Tax Rates, Aberdeen: The Scottish Parliament, Scottish Rate of Income Tax Calculator Vancouver, Calgary: Canada Revenue Agency Pittsburgh, Chicago: Tax Foundation, The facts on Pennsylvania s Tax Climate Atlanta: Georgia Power Community and Economic Development, Metro Atlanta Overview Brisbane: Australian Government, Australian Taxation Office, Simple tax calculator Rotterdam: Stepan Suvorov, Dutch Income Tax Calculator 34

35 Rent per square foot (CAD) Commercial Real Estate Rent Real estate rent is considered for most businesses one of the most significant fixed costs. Given the importance of location for a business office, the price range in commercial real estate can vary significantly within a city. Nevertheless, investment decision makers will generally calculate an estimate for commercial rent in different cities or regions. In order to provide a view of the average commercial real estate rent price in a city, real estate associations and companies periodically report the market price for commercial space. Depending on the commercial location structure of the city, these reports will generally provide the market price for space in different locations. Also, a standard in these real estate reports is to provide the rental price per square foot or square meter. For this assessment, the most recently reported average commercial real estate net rent for each city was converted into Canadian dollars and square feet for those reported in square meters. $180 $160 $140 $120 $100 $80 $60 $40 $20 $- Annual commercial real estate rent (CAD/ft 2 ) $36.14 $43.10 $48.38 $48.44 The most affordable city to rent commercial real estate is Rotterdam with an average rental price of CAD per square foot. Atlanta follows in second place with an average rental price of CAD per square foot. Calgary appears in fourth place in the ranking with an average rental price of CAD per square foot. Rio de Janeiro and Singapore reflect the most expensive rental prices for commercial real estate a rate of CAD and CAD, respectively. The top contender in this ranking, Rotterdam offers some of the most affordable commercial rents in the main commercial cities in the Netherlands. The most expensive commercial rents in the country are found in Amsterdam with double the rental prices in Rotterdam. $61.58 $65.42 Calgary s vacancy rate climbed to nearly 11% during the first quarter from 8.5% at the end of 2014, a shift that has pushed down rents, especially in the sublease sector -The Wall Street Journal $95.71 $ $ Rotterdam Atlanta Vancouver Calgary Houston Chicago Brisbane Singapore Rio de Janeiro Sources: All cities: Cushman & Wakefield, Office Space across the world Note 1: Net rent rates used for all cities, including service charges and local taxes Note 2: Currencies converted into CAD on September 4,

36 Price per square foot (CAD) Industrial Land Price Knowing the industrial land price across different cities is essential for investors and companies that are looking to purchase land to establish and conduct business operations. Investment decision makers will choose whether to buy industrial land depending on the short and future term goals of the enterprise. The need for substantial additions and capital projects for business operations will typically involve the purchase of land. In this comparison, Calgary tops the ranking with the most affordable industrial land price per square foot with a rate of 14 CAD per square foot. Vancouver follows in second place with a price of 22 CAD per square foot. Atlanta is in third place with a rate of 59 CAD per square foot. Singapore, known for its extremely high land prices, is found at the bottom of the ranking with an average price of 546 CAD per square foot. In order to provide a view of the average industrial land price in a city, real estate associations and companies periodically report the market price of industrial land. Price will vary by location within a city. However, the average market price is generally provided quarterly and/or annually. In addition, prices are provided either for square foot or square meter. For this comparison, all prices were converted into Canadian dollars and square feet. $600 Average Industrial Land Price (CAD/ft 2 ) $546 $500 $400 $300 $200 $100 $0 $101 $59 $61 $63 $64 $65 $14 $22 Calgary Vancouver Atlanta Pittsburgh Brisbane Houston Chicago Rotterdam Singapore Sources: Calgary, Vancouver: CBRE 2015 Q3 Pittsburgh, Chicago, Atlanta, Houston: LoopNet, Market Trends Brisbane: m3property Strategists, Brisbane Industrial Land Market Rotterdam: Industrial NL, Industrial and Logistics real estate, Dutch Market Report 2015 Singapore: Colliers International, Outlook for Singapore's Industrial Property Market, Jan Note: Currencies converted into CAD on September 4,

37 ($ per $100 of assessed value) Commercial Property Tax For most property owners, a key annual tax that needs to be paid is property tax. Most cities and countries will have different tax rates for residential and commercial property. This tax is calculated and billed annually using the property's assessed value. The assessed value of the property is typically determined by a governmental council through the analysis of the real estate market and the particular characteristics of the property. Property tax is generally expressed as a millage rate, that is the amount per $1,000 or $100 that is used to calculate taxes on property. This millage rate is multiplied by the total assessed value of the property to arrive at the property taxes due. In this assessment, Houston leads the ranking with a tax rate of $0.64 per $100 of assessed value. Pittsburg follows with rate of $0.86. Calgary comes in fourth place with a rate of $1.41. A key distinction to notice is Singapore s assessment value calculation. In contrast with the other cities, Singapore does not estimate the market value of the property as the amount that a property might be expected to realize if sold. In Singapore assessed value is calculated as the estimated gross annual rent of the property if it were to be rented out. Calgary property tax rate is comparable to the other cities that use the same market value calculation. $12.00 Commercial Property Tax $ $8.00 $6.00 $4.00 $ $0.00 Houston Pittsburgh Atlanta Calgary Vancouver Aberdeen Chicago Singapore * Sources: Calgary, Vancouver: BNN, How does your property tax compare with the rest of Canada? Houston: Diane Moser Properties, Houston City Government, Office of the City Controller Houston Texas, Trends for Fiscal Year 2015 Pittsburgh: Pittsburgh, Property Tax Worksheet Atlanta: City of Atlanta, The Tax Bill, An Illustrative Guide Vancouver: City of Vancouver, Business and other property tax rates Aberdeen: Aberdeen, Property Taxes Chicago: City of Chicago, Finance, Tax List Singapore: Inland Revenue Authority of Singapore, Property Tax Rates, Deloitte. International Tax, Singapore Highlights 2015 *Using Singapore s Annual Value Calculation 37

38 Corporate tax rate (%) Corporate Tax Corporate taxes are one of the most significant metrics analyzed by international investors. Depending on the type of economy, corporate taxes can represent a major source of income for provincial/state and federal revenues. While some countries have a flat rate for corporate taxes, others will have a progressive taxation system, mainly to support small companies. Companies with over $1 million dollars in revenue will have most of their income tax at the top tax rate. All Canadian provinces and most states in the United States will impose an additional corporate tax, aside from federal corporate tax. In this assessment, both provincial/state and federal corporate taxes were combined to represent the total tax burden. In general, corporate taxes in United States are significantly higher than in Canada and other countries in the world. Canada is considered in the top 10 countries for ease of paying taxes -PWC In this ranking, Singapore leads with a flat corporate rate of 17%. Aberdeen follows with a flat rate of 20%. Vancouver and Calgary have a combined corporate tax rate of 26% and 27%, respectively. Cities in the United States have the highest corporate taxes in the ranking with top corporate tax in Pittsburgh at 45%. The State of Pennsylvania has the second highest corporate tax rate in the United States. The State of Texas has additional taxes levied on particular industries such as a gross receipts tax imposed on utility companies. 50.0% 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% Top corporate tax rate 25.0% 20.0% 17.0% 26.0% 27.0% 30.0% 34.0% 35.6% 41.0% 44.5% 45.0% 15.0% 10.0% 5.0% 0.0% Singapore Aberdeen Rotterdam Vancouver Calgary Brisbane Rio de Janeiro Houston Atlanta Chicago Pittsburgh Sources: Singapore: Singapore Company Registration Services, Singapore Corporate Tax Guide 2015 Aberdeen, Rotterdam, Rio de Janeiro, Houston, Pittsburgh: Deloitte. International Tax, Corporate Tax Rates 2015 Vancouver KPMG, Federal and Provincial/Territorial Tax Rates for Income Earned by a General Corporation Effective January 1, 2014 and 2015 Calgary: Tax and Revenue Administration, Government of Alberta Brisbane: PWC Australia, TaxTalk Houston: Texas Comptroller of Public Accounts, Texas Franchise Tax Rates Atlanta: Georgia Power Community and Economic Development, Metro Atlanta Overview Chicago: Entrepreneur, States With the Lowest Corporate Income Tax Rates Pittsburgh: Tax Foundation, The facts on Pennsylvania s Tax Climate 38

39 6. Livability

40 6.1 Definition The livability of a city is generally referred to as the sum of the factors that add up to a community s quality of life. Livability rankings typically use data such as public safety, economic and political stability, education and health statistics, sanitation standards, global access, and expenditures on city services. Livability in this study refers to the characteristics of the city that influence the overall well-being of the community. Understanding the livability of a city is important for many reasons. Not only can a government improve its understanding of how the lives of its citizens are being influenced by the particular characteristics of the city they administer, but multinational corporations can also perceive the degree to which expatriates enjoy the potential standard of living in the host location. Standardized criteria to measure the livability of a city do not exist. However, most rankings will include GDP rates, crime rates, public health access rates, social and economic circumstances for residents, public health access rates, and ease and availability of transportation. Five dimensions and their corresponding metrics were used to benchmark Calgary s livability. Housing Affordability LEED Buildings Health Care Crime Global Access Housing median multiple (median house price divided by gross annual median household income) Number of LEED buildings Number of hospital beds per 100k people Number of crimes per 100k people Number of international departure flights 40

41 6.2 Benchmarking Performance Compared to the peer cities, Calgary has an average overall performance across the five metrics. Housing Affordability: Calgary is rated as seriously unaffordable, according to Demographia International s 2015 Housing Affordability Survey. Nevertheless, Calgary has the median rating when compared to its peers and its rating is more favorable than the average LEED Buildings: Calgary has made great progress in this area in the recent years, yet it is still considered a young participant. Compared to its peers, Calgary has a low number of LEED buildings, performs below average and is below the median Health Care: Calgary is found in the median when compared to its peers; Calgary s rating is also the mode in the assessment Crime: Calgary is above average and close to the median compared to its peers which signifies a higher number of crimes committed Global Access: Calgary s international airport might be small in size but it has more international departures than half of Calgary s peer cities Housing Affordability LEED Buildings Health Care Crime Global Access 5 th / 9 in housing median multiple 8 th / 11 in number of LEED buildings 5 th / 9 in number of hospital beds per 100k people 4 th / 9 in number of crimes per 100k people 6 th / 11 in number of international departure flights 41

42 Median multiple Housing Affordability Affordable housing refers to housing units that are affordable by that section of society whose income is below the median household income. The definition of what constitutes affordable housing may vary slightly from one country to the other but in essence it should address the housing needs of the lower or middle income households. In this benchmarking study, to provide a view of the housing affordability in each city, the median multiple was used, which is defined as a median house price divided by gross annual median household income. This multiple is widely used to evaluate urban markets and is often used by the World Bank, United Nations, research centres and academic institutions. The median multiple can be divided into four categories: Severely unaffordable, seriously unaffordable, moderately unaffordable and affordable. The median multiple range that falls into each rating category can be found in the table below. Rating Category Severely Unaffordable Housing Affordability Rating Categories Median Multiple 5.1 & Over Seriously Unaffordable 4.1 to 5.0 Moderately Unaffordable 3.1 to 4.0 Affordable 3.0 & under Of the nine cities compared in this metric, the city of Pittsburgh ranks the highest in housing affordability, with a median multiple of 2.7, which belongs to the rating category of affordable. The city of Atlanta ranks second with a median multiple of 2.9, within the affordable rating category. The worst performer in this section is the city of Vancouver with a median multiple of 10.6, which belongs to the rating category of severely unaffordable. Nevertheless, Vancouver is not the only city in this category, Aberdeen and Brisbane also belong in the severely unaffordable category. With a median multiple of 4.2, Calgary belongs in the seriously unaffordable category. The data used in this ranking is from 2014, in that year the median household income in Calgary was 94,700 USD and the median housing price was 394,400 USD. Pittsburgh and Atlanta are considered the leading metropolitan areas in the United States and are often ranked in the top of most rankings. The reason behind this success is not high median household income, which pairs with the national average but the low housing prices that are found in these two cities. This low price prompts home ownership. Vancouver, on the other hand, is ranked as the world s second most unaffordable metropolitan area. According the Royal Bank of Canada, Vancouver s poor performance in affordable housing is not expected to improve in the short term, as Vancouver has recently experienced the fastest rate of appreciation in Canada, when compared to other metropolitan areas Housing affordability (median multiple) Pittsburgh Atlanta Houston Chicago Calgary Singapore Aberdeen Brisbane Vancouver 10.6 Sources: All Cities: 11th Annual Demographia International Housing Affordability Survey:

43 Number of LEED buildings Number of LEED buildings per 100k people LEED Buildings The term LEED buildings stands for a building with a Leadership in Energy & Environmental Design (LEED) certification. In order to receive a LEED certification, buildings must satisfy prerequisites and earn a specific number of points to achieve different levels of certification. This certification involves independent verification of a building s features, including its design, construction, operations and maintenance to prompt a resourceefficient, healthy, high-performing and cost-effective building. Having a LEED certification results in healthier and more productive buildings by encouraging energy and resource-efficient structures and operations that reduce stress on the environment. The certification is provided by the U.S Green Building Council (USGBC). Nine out of the eleven cities ranked have at least one LEED building. American cities are found on the top of the list. The top city in number of LEED buildings is Chicago with 463 LEED buildings, followed by Houston with 397, Atlanta with 293 and Pittsburgh with 123. Calgary is found in eighth place with 23 LEED certified buildings. Aberdeen and Brisbane did not record any LEED buildings. The leader in this category, Chicago, became an early proponent of LEED certification when the city opened its Chicago Centre of green technology in 2002 achieving a LEED platinum certification. In 2004, the city decreed that all rehabilitated or new city buildings would have to be LEED-certified. In the same way, the city enacted several policies, such as Chicago s Sustainable Development Policy, to encourage the private sector to seek LEED certification. The combination of both public and private participation has taken Chicago to become a world leader in LEED certification Certified LEED buildings per city (total number of buildings) (buildings per 100k people) Chicago Houston Atlanta Pittsburgh Vancouver Singapore Rio de Janeiro Calgary Rotterdam Brisbane Aberdeen Sources: All Cities: US Green Building Council Directory, Projects 43

44 Beds per 100k people Health Care Health care is an important aspect of any livability assessment. There are multiple qualitative and quantitative methods used to evaluate the health care system of any city. The capacity of both public and private hospitals is a good parameter of the accessibility to health care facilities by the members of a community. The number of hospital beds available relative to the total population within a city will provide a quantitative view of the overall capacity that the city has to provide health care to its citizens. This benchmarking study uses the metric of number of hospital beds per 100 thousand residents of any given city. Of the nine cities which data was available, Houston leads the ranking with 480 hospital beds for 100 thousand people. Closely, in second place, we have Rotterdam with 470 hospital beds. Calgary, Pittsburgh and Singapore have all the same number of hospital beds with 197 for 100 thousand people. At the bottom of the ranking we find Atlanta with 72 and Chicago with 91 hospital beds per 100 thousand people. Houston is considered a national health care leader in the United States with hospitals that are often ranked as the top in Texas and nationally. For instance, the University of Texas MD Anderson Cancer Center, located in Houston, is the top medical institution for cancer treatment in the United States. In March 2015, the Province of Alberta announced the creation of 311 new restorative beds, 186 for Calgary and 125 for Edmonton. The goal in Calgary is to have the beds set up by the end of the summer -Global news Number of hospital beds per 100k people Houston Rotterdam Brisbane Vancouver Calgary Pittsburgh Singapore Chicago Atlanta Sources: Houston: Texas Hospital Association Rotterdam: CIA factbook Brisbane: Australian Institute for Health and Welfare Vancouver: Canadian Institute for Health Information Calgary: Alberta Health Services and supporting sources Pittsburgh, Chicago and Atlanta : American Hospital Directory Singapore: Ministry of Health Singapore 44

45 Crimes per 100k People Crime The livability of a city can be seriously impacted by crime. Being a victim of a crime can dramatically impact an individual s ability to perform across a variety of roles for both occupational and social functioning. Registered crimes are generally divided between person crime offences and property crime offences. Within the category of personal crimes, crimes included are typically homicide, other offences causing death, attempted homicide, robbery, sex crimes and assault. Included in property crime offences, most police departments will register break and enter crimes, theft, vehicle theft, fraud and mischief and property damage, among others. The metric used to compare cities was registered crimes per 100 thousand people. The data for registered crimes comes mostly from the most recent reports published by police departments in these cities. Of the nine cities for which data was available, Aberdeen is the best performer with the lowest crime rate at 299 reported crimes per 100 thousand people. Singapore follows with 596 crimes per 100 thousand people. On the other side of the spectrum, we find Atlanta as the worst performer with 7,936 reported crimes per 100 thousand people. Calgary ranks fourth place in registered crimes per 100 thousand people with 4,217 in year Aberdeen s success in low crimes per 100 thousand people can be linked to a crime reduction trend in the past couple of years. In February 2015, the city reported a 25% crime reduction compared to the previous 12 months. The success has been attributed to the performance of the Police Scotland officers who work and reside in the city Crime rate Aberdeen Singapore Brisbane Calgary Pittsburgh Chicago Houston Vancouver Atlanta Sources: Aberdeen: Aberdeen City Council, Aberdeen Key Facts 2015 Singapore: Singapore Police Force, Annual Crime Brief 2014 Brisbane: Queensland Police Service, Annual Statistical Review Calgary: Calgary Police Service, Calgary Police statistical reports Pittsburgh, Chicago, Houston, Atlanta: FBI Records Vancouver: Vancouver Police Department Crime rate statistics

46 Daily flights Global Access The global integration of a city can be better understood with the number of international flights that depart from its airports. These data are often reviewed by international companies who seek to establish a business relationship or expand into another city. Moreover, whether it is arrival or departures the number of international flights can provide a good view of the degree of connectivity that the city could have with international markets. Calgary and the 10 peer cities all have at least one international airport. Given its size and location, Singapore ranks 1st with a number of 449 international flights per day, with destinations all over the world. Vancouver follows with a figure of 176 average daily international flights mainly with international flights to Asia, the U.S.A and Latin America. The peer city with the least average daily international departure flights is Rio de Janeiro with 25 flights. In Brazil the biggest airports are found in Sao Paulo and Brasilia. Calgary ranks 6th with an average of 55 daily international departure flights International departure flights Sources: Singapore: Changi Airport Vancouver: Vancouver Airport Authority Atlanta: Atlanta International Airport Chicago: Chicago Department of Aviation Houston: George Bush Intercontinental Airport Calgary: YYC Calgary Airport Authority, Traveler Info Brisbane: Brisbane Airport Corporation Pittsburgh: Pittsburgh International Airport Rotterdam: Rotterdam The Hague Airport Aberdeen: Aberdeen Airport Rio de Janeiro: International Airport Galeao In 2015, the Singapore airport was recognized as the world s best airport for the third year in a row -CNN The Calgary Airport Authority has undertaken a 2 billion CAD Airport Development Program encompassing a new 2 million-square-foot International Terminal with 22 new aircraft gates-scheduled opening in the fall of YYC Airport 46