Waterloo evolved from a milling and small-factory belt into one of Canada’s most durable manufacturing regions. Expertise in textiles, furniture, rubber, brewing and food processing diversified our manufacturing sector early on, while recent expertise in robotics and automation has come to characterize its innovative edge.
South of the border, Louisville emerged as a heavy industrial base in the mid-1800s, producing cast iron, textiles, bourbon and farming equipment. Manufacturing has defined the city’s economy for centuries.
Both regions have leveraged their industrial histories into modern-day manufacturing capabilities. The specialized infrastructure and strategic location that originally set Waterloo and Louisville up for manufacturing success remain key strengths, establishing the pair as close competitors for manufacturing investment.
If your company is considering expanding its manufacturing operations, comparing data between two strong options like the Waterloo and Louisville regions can help narrow down your decision.
Let’s see which industrial hub prevails, according to the hard facts.
Key Takeaways
- Waterloo’s manufacturing workforce is growing 3.8% faster than Louisville’s, backed by a higher concentration of manufacturing talent and strong skilled-trades and engineering programs.
- Manufacturing wages in the Waterloo region run about 25% lower than in Louisville, without a lower quality of life for workers, thanks to a favourable exchange rate.
- Waterloo’s energy grid is 84.3% emission-free, compared to less than 7% in Louisville, giving manufacturers a faster path to corporate sustainability goals.
- At 25%, Waterloo has one of the lowest corporate tax rates of the eleven manufacturing hubs profiled in the Manufacturing Data Book.
Data Point #1: Manufacturing Workforce Size & Growth
Louisville is home to a large, broad manufacturing base. Its total manufacturing workforce is bigger than Waterloo’s by about 40,000 people. For high-volume production and distribution, Louisville provides a substantial workforce.
Waterloo’s manufacturing concentration and growth, however, eclipses Louisville’s. A larger percentage of our community’s total population works in manufacturing, a concentration that demonstrates the depth of specialization and talent availability in the Waterloo area.
Our manufacturing workforce is also growing – 3.8% percentage points faster than Louisville’s. In addition to post-secondary schools offering skilled trades programs and lauded engineering degrees, Waterloo’s quality (and cost) of life attracts talent.
All three data points – workforce size, concentration and growth – should factor into your expansion decision, depending on the type of operation you want to establish. But concentration and growth are often the most reliable indicators of a region where you’ll be able to find, hire and keep talented workers in the long term.
Data Point #2: Salaries for Key Occupations
Paying your workers the right amount increases your retention rates, boosts your bottom line and ensures a strong quality of life for everyone at your company. So, what does the right amount look like?
Hourly and salaried wages are approximately 25% lower in the Waterloo area than in Louisville. Right off the bat, it’s clear that companies can save costs here. Manufacturing operations run on notoriously tight margins – locating in Waterloo can give you some breathing room.
But what the data doesn’t show is that these lower wages align with the cost of living in Waterloo. The average hourly pay and salary in Waterloo for key manufacturing operations is reduced due to a favourable exchange rate. Your payroll goes further here, without asking your workforce to take a cut in quality of life.
Data Point #3: Emission-free Energy Generation
Louisville’s energy infrastructure is under intense pressure and scrutiny. The city’s energy mix is currently less than 7% emission-free, with local power generation heavily reliant on resources like natural gas and coal.
This is a hurdle for many major manufacturers that increasingly require high percentages of renewable energy to meet corporate carbon-neutrality goals (or companies that want to reduce their footprint). Louisville’s centuries-long manufacturing history may have provided the region with a robust supply chain, but emission-free infrastructure remains a missing piece of the puzzle. Scaling up that kind of infrastructure is a process that takes years of logistical headaches and regulatory challenges.
Our community, on the other hand, sits on a mostly emission-free energy grid. With 84.3% of energy emission-free, manufacturers can capitalize on our established and reliable renewable infrastructure to meet corporate goals and make operations more sustainable.
Data Point #4: Energy Cost per kWh
In addition to cleaner energy, Waterloo offers cheaper energy, too. The difference between the two rates isn’t much (6.30 to Louisville’s 6.72), but in a world where power demand and electricity consumption are increasing, every cent matters. That gap translates to savings of over 6% for manufacturers.
Continuous industrial processes, digital infrastructure and electrified equipment all contribute to the growing demand for electricity across North America, putting pressure on power prices and related expenses. For large industrial customers, electricity bills reflect growing energy consumption and demand charges tied to peak usage.
In addition to lower base prices, manufacturers in Ontario can optimize their peak energy usage for operational and financial benefits. The Industrial Conservation Initiative (ICI) provides significant incentives for large energy users (customers with an average monthly maximum hourly demand greater than 5 MW) to reduce electricity usage during peak hours, lowering overall cost of operations.
Data Point #5: Corporate Taxes
Lastly, let’s talk taxes. The difference between Louisville and Waterloo’s corporate tax rates is narrow, but like energy costs, the discrepancy can either translate into major savings or significant losses.
With a rate of 25%, Waterloo offers one of the lowest corporate tax rates among all eleven manufacturing hubs we compare in our Manufacturing Data Book, from which all this data is derived. If you want to look beyond Louisville, the book is a comprehensive, comparative resource that ranks manufacturing regions across metrics like talent, energy and cost.