The short version
Manufacturing is a cornerstone of economic growth, and Waterloo knows that better than most. Renowned for its innovation ecosystem, the region is also an integral part of Canada’s Manufacturing Corridor. The combination of a tech mindset and manufacturing knowhow – drawing on top talent and research – that makes Waterloo a unique opportunity for growing manufacturers.
When evaluating a manufacturing hub – talent availability, labour costs, energy prices and tax competitiveness all contribute to a company’s long-term success. Successful hubs are ones that combine deep industrial ecosystem with infrastructure and global connectivity, while maintaining affordability to ensure sustainable growth.
Waterloo is home to 1400 advanced manufacturing companies, including global manufacturers like Desch, Viessmann and Siemens. It boasts Canada’s fourth-largest manufacturing workforce and is home to leading R&D assets, including RoboHub and the Multi-Scale Additive Manufacturing (MSAM) Lab, Canada’s largest 3D printing research facility.
How does Waterloo compare to other manufacturing hubs in North America?
Let’s consult the data. For a useful comparison, we filter out massive manufacturing centres like New York and Chicago. Instead, we stack Waterloo against top-tier, mid-market advanced manufacturing hubs across North America.
Manufacturing workforce size & concentration
While we aren’t home to the largest workforce, Waterloo offers manufacturers a combination sizeable workforce alongside significant concentration. At 13.3% of total employment, it has the highest manufacturing workforce concentration among its peer markets. This is a strong indication of the role the manufacturing industry plays in the local economy.
Combined with a steady 7% projected workforce growth, proximity to Toronto’s massive manufacturing workforce and access to North America’s largest co-op talent pipelines, Waterloo offers manufacturers both the talent they need today and the workforce they’ll need tomorrow.
A final note on talent – as manufacturing becomes more dependent on technology, the availability of robotics, automation and software expertise becomes more important. This is where Waterloo really stands out. In the newest CBRE Scoring Tech Talent report, our community significantly outperforms all these communities, ranking 10th overall.
Salaries for key occupations
Payroll can account for as much as 35% of manufacturing operating costs, so finding a workforce that has the right people at the right price is important.
Using Waterloo EDC’s Manufacturing Cost Calculator, we compared compensation for several key manufacturing occupations across competing North American markets, using a typical employee with five years of experience as the benchmark.
The result: Waterloo offers a significant cost-advantage. Across both hourly and salaried roles, employers can access highly skilled talent at substantially lower wage levels than competing manufacturing hubs. This difference is largely due to Canada’s favourable exchange rate with the United States.
Emission-free energy generation
Clean energy is no longer just a corporate responsibility. With governments tightening environmental regulations and consumers and supply-chain partners expecting companies to follow responsible operating practices, access to clean energy has become a competitive advantage.
With more than 80% of its energy being generated from emission-free sources, setting up in the Waterloo area, helps manufacturers reduce their carbon footprint while also lowering their long-term operating costs by shielding them from the volatile energy markets.
Energy cost per kWh
Clean energy? Check. Competitive energy costs? Check.
Waterloo combines one of North America’s cleanest energy grids with electricity costs that remain highly competitive among comparable manufacturing hubs. At 10.1 cents/kWh, manufacturers benefit from reliable, emission-free power without the premium that is often associated with clean energy. That combined with Waterloo’s strengths in talent, workforce growth and innovation, businesses can achieve their sustainability goals while maintaining cost competitiveness in the long run.
Corporate tax rates
While the gap is relatively modest, every percentage point matters when making long-term investment decisions. At 25%, Waterloo has one of the lowest corporate tax rates among the 11 manufacturing hubs featured in our Manufacturing Data Book, adding another cost advantage on top of labour and energy.
This is just the start of the Canadian tax story. Generally speaking, Canada also has lower payroll tax rates as well, and our new Productivity Mega Deduction allows for a 100% write-off of 65% of capital assets, which means start-up costs for new facilities are reduced.
From talent and manufacturing concentration to energy costs and tax competitiveness, Waterloo offers a compelling case for growth. To explore how those advantages translate into real savings for your business, you can use the Manufacturing Cost Calculator. Build a customized labour and facility model, then compare costs of operating in Waterloo against other North American manufacturing hubs.
The Summary
- Waterloo is home to 1,400 advanced manufacturing companies, including Desch, Viessmann and Siemens
- It has Canada’s fourth-largest manufacturing workforce and the highest manufacturing concentration among its North American peers, at 13.3% of total employment.
- Manufacturers benefit from the lowest energy costs among competing hubs, at 10.10 cents/kWh, with more than 80% of energy coming from emission-free sources.
- Employers can access skilled talent at substantially lower wages than in competing U.S. hubs, along with a 25% corporate tax rate and new capital write-offs