Finance minister Bill Morneau and Prime Minister Justin Trudeau
Several months ago, Council of Canadians honorary chairperson Maude Barlow commented, "A global corporate tax 'race to the bottom' is taking place. This is a dangerous trend that will deepen inequality and favour the already favoured."
CBC now reports, "In the face of a growing number of calls for Canada to match a recent U.S. corporate tax cut, Finance Minister Bill Morneau has embarked on a 'listening' tour of Canadian businesses and is mulling new measures to level the playing field - which could come as early as the fall economic statement."
That article explains, "U.S. President Donald Trump has cut the top corporate tax rate from 35 per cent to 21 per cent beginning this year. Canada's combined corporate tax rate hovers above 25 per cent, depending on the province."
The Business Council of Canada, Canadian Manufacturers and Exporters, and the Canadian Chamber of Commerce have all reportedly called on the federal finance minister to cut the corporate tax rate.
Canadians for Tax Fairness has noted, "Tax haven facilitated tax evasion costs Canada at least $7.8 billion a year. We lose another $10 billion through tax loopholes that mainly benefit the rich. Corporate taxes have been cut in half over the past decade, a loss of $13 billion a year. Other tax cuts, including the GST/HST tax cut and various boutique tax cuts add up to another $32 billion a year. That is $62 billion in uncollected money that could be invested in health care, child care, education and affordable housing."
There could be more than corporate tax cuts on the way.
John Manley, the former Liberal cabinet minister who now heads the Business Council of Canada, has stated, "Initiatives such as tax reform, changes to environmental policy and deregulation [in the United States] could have serious consequences for Canada's economy." His prescription? Cut corporate tax rates to stay competitive, streamline the regulatory approval process, negotiate free trade agreements with Japan, India and China, and adopt less restrictive climate policies.
Today's CBC report notes, "'We were a little bit sheltered behind lower corporate income taxes and now other elements of competitiveness are starting to be exposed.' Those other elements, Manley said, include Canada's regulatory regime, labour rules, personal income tax rates and investment incentives."
We should also keep in mind that when Trudeau met with Trump at the White House on February 13, 2017, their Joint Statement highlighted, "We will continue our dialogue on regulatory issues and pursue shared regulatory outcomes that are business-friendly, reduce costs, and increase economic efficiency without compromising health, safety, and environmental standards."
Furthermore, in September 2017, World Trade Online reported, "The Canadian government is pushing for stronger regulatory cooperation provisions during the second round of NAFTA renegotiation talks, hoping to move beyond the US.-Canada Regulatory Cooperation Council established by the Barack Obama and Stephen Harper governments in 2011, according to Canadian stakeholders. Canada is looking to include in NAFTA requirements for a regulatory cooperation council that is led at the political level, meets regularly and establishes agendas for future outcomes."
The Council of Canadians will continue to campaign against neo-liberalism (corporate tax cuts, free trade, deregulation, privatization) and advocate for this bold vision of transformative change that includes an economic policy for the 99 per cent, fair taxation, regulatory protection and fair trade.