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PostPosted: Tue Jun 26, 2018 9:17 am    Post subject: Liberals under pressure to match Trump's economic changes Reply with quote

It's all falling apart for the Trudeau Team. Trump's budget and tax policy have immediate ramifications in the two economies, and the trade war hasn't even started yet.

Morneau under pressure to match Trump's tax cut as finance ministers meet
Canada should also be looking at regulations, labour and investment rules, says industry rep

Karina Roman · CBC News · Posted: Jun 26, 2018 4:00 AM ET | Last Updated: 2 hours ago

Finance Minister Bill Morneau isn't ruling out a corporate tax cut, but his office says he wants more options to consider as a response to the Trump administration's deep cut to the corporate rate.

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.

Meanwhile, the debate over what Canadian businesses need now to be more competitive is likely to be a key part of the conversation at today's federal-provincial finance ministers' meeting in Ottawa.

Canadian Manufacturers and Exporters, an industry group representing 2,500 companies, recently joined the Canadian Chamber of Commerce and the National Business Council in urging Morneau to cut the corporate tax rate and boost investment incentives.

"The cost of doing business in Canada is higher and the tax advantage we once had is gone," said Dennis Darby, president and CEO of Canadian Manufacturers and Exporters.

The administration of 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.

'We need to do more'
Morneau has said the government is analyzing the impact of the Trump administration's tax changes and has not ruled out a corporate cut of its own — but it's clear he wants to hear about more than that in his consultations with businesses, which will ramp up this summer.

"Yes we need to do more," said Daniel Lauzon, Morneau's director of communications. "Maybe there are things we can do with regards to the tax rate, but it has to be a broader discussion than just that."

Even those who have called for lower corporate taxation in response to the Trump administration's moves say there are measures apart from a tax cut that could help Canadian firms compete.

"When the tide goes out, you find who on the beach wasn't wearing a bathing suit," said John Manley, president and CEO of the Business Council of Canada and a former federal minister of finance.

"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.

"These things keep adding up. You can't be short on all of them. You gotta win on some." [....]

Are they going to wait for the mid-terms, hoping that Trump will lose the Congress? So a vengeful Democrat Party will rise up and re-impose the Obama tax regime? That strikes me as a long-shot.

There are signs that investment is moving out of Canada, and certainly out of Ontario. Corporate Canada is slowly bleeding. It seems our governing clowns are stuck in a rut. They have not seen any of this coming, even when it should have been obvious

They have a choice ahead ... either they continue on their merry way, forward with the carbon tax, forward with the open border, forward with the deficit spending ... or they can reverse course, and go back to a much more Harper-like program.

Is there a third choice? Please comment. Because, if this is their choice, guess which one they'll take?

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PostPosted: Wed Jun 27, 2018 11:37 am    Post subject: Reply with quote

The new corporate tax rates in the US are largely bring in line Ontario and Quebec with the majority of border States as such the situation in Ontario were income tax was prohibitive but the Provincial Corporate Rate + Federal Rate was advantageous is now mostly gone.

Couple that with the fact that minimum wage in Michigan is 9.25USD (12.29CDN) and the cost of gasoline, electricity, and virtually any energy source is cheaper logically there has to at least be discussions taking place on competitive balance.

Right now Canada has the benefit of a cheap dollar, however as oil increase that advantage has the potential to erode away and there has to be a strategy beyond that to maintain manufacturing.

For all the discussion about NAFTA and the politicization of that entire situation;
Shouldn't someone be talking about a Plan B? Shouldn't the Government follow the CPCs lead and approach the UK about being first in line to negotiate trade once they exit the EU?

Aside from a back and forth tariff battle, is there any long term thinking about how Canada will counter a newly competitive market within a two hour drive of most of its citizens or an alternate export market for its good?

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PostPosted: Wed Jun 27, 2018 12:34 pm    Post subject: Reply with quote

As important is the cost of complying with regulations ... and do we have regulations. There is a rural neighbour here, a guy with 100 acres of his own, plus he runs a high-quality construction company. He showed me and some others all the cards he has to carry in his job, either on his farm or in the trades. There were 11 of them, special licenses to climb ladders, to handle farm chemicals, a staggering number of 'safety' special areas.

This is the reality of the labour market these days. The neighbour has all of these cards personally because he can't hire the 'specialists' when he needs them. His crew is half a dozen good tradesmen and some contractors. So he does the ladder work, etc.

There was a time, not so long ago, when driving a truck was a skill that a lot of rural people picked up along the way. Now the licensing is so elaborate and expensive that few people bother unless it's a career decision. It's a doomed trade anyway ... but it's an illustration of how we have lost flexibility in our workforce.
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Liberals under pressure to match Trump's economic changes

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