"Tax cuts turn Canada in to a cost leader"
A decade’s worth of tax cuts at the federal and provincial levels is beginning to bear fruit as Canada has emerged a cost leader among industrialized countries in terms of doing business, says a competitiveness analysis conducted by KPMG...
The last time KPMG did such an analysis, in 2008, it found the cost of doing business in Canada was virtually identical with that in the United States. Tax cuts account for part of the reason why Canada’s competitiveness has improved, says the report...
“Cumulatively this has had quite an impact on competitiveness for Canada, to a point where [with the dollar] close to parity, Canada is able to hold its own in terms of having a competitive edge over the U.S.,” said Glen Mair, co-author and head of MMK Consulting in Vancouver.
“Go back to the early days of this study, in the mid-1990s, and that definitely wasn’t the case.”
The Conservatives only real argument for further corporate tax cuts is the competitive angle. Unfortunately, we are starting to see a counter picture, which clearly shows we've already made great progress on the tax front, further reductions aren't required to keep us competitive. Factor in some common sense, namely that other nations face a much higher debt load, which will preclude further tax cuts, and Canada is in a very enviable position indeed.
This from the Toronto Star:
Canada world leader in competitive business: KPMG
The report offers some ammunition to Liberal Leader Michael Ignatieff’s proposal to scrap the remainder of scheduled corporate tax cuts, which the Conservative government has said will improve Canada’s international competitiveness.
Yesterday I posted a survey of the business community, which showed they overwhelming rejected further tax cuts. This latest study, does provide Ignatieff "ammunition", the Liberals are on VERY solid ground, they've captured the current mood and they have ample non-partisan backing for their position.
The Conservative arguments operate in isolation, whereas the Liberals are finding allies. Further, we still have many economists on board with actually raising taxes, so expect to see some endorsement from that crowd, relating to a corporate freeze. The FACTS are Canada has the lowest corporate taxes of the G8, and now we see overall competitiveness has never been stronger. I don't want to be dismissive, but the Conservatives have a daunting task, if they hope to paint Ignatieff as reckless and anti-business, a "job killer", all that other nonsense. The Conservatives will surely try, and I don't under-estimate the capacity for CRAP, but it is comforting to know the Liberals find outside affirmation.
This looks to be a lonely fight for the government, and when you consider the added lunacy of tbelieving Canadians will rally behind perceived cuts for the "rich", I'd say it's a loser in the end. The Liberals job is to use the outside "backing" to demonstrate their sensible, responsible and competitive approach to the economy and the deficit.