Policy Initiatives

Lowering Business Costs

Overview

CME is helping make your business more competitive by working to lower your tax burden, simplify regulations and reduce the non-tax cost of doing business in Canada.

Why It Matters

Low business costs are the key to competing successfully at home and abroad. They help attract production mandates, increase exports, and leave more money available for companies to invest in their own future success.

The Challenges

Canada is already an expensive place in which to do business and costs are trending in the wrong direction. The challenges include:

  • An overly complex and uncompetitive tax system
  • Rising minimum wages and electricity costs in some provinces
  • High telecommunications and air travel costs
  • Corporate tax increases in some provinces
  • A burdensome regulatory system
  • The roll-out of a national price on carbon
  • Proposed new Clean fuel standard regulations

Meanwhile, tax reform south of the border has eliminated Canada’s previous tax advantage over the US and is threatening our competitiveness even further. That tax advantage was critical because it helped to compensate for the fact that we are a smaller, less attractive market; and that the non-tax cost of doing business here is higher.

ISSUE

Corporate Tax Reform

ISSUE

Canada used to rely on a competitive tax system to compensate for its high overall business cost structure. That advantage is gone. Canada needs fundamental tax reform to reduce the overall burden and complexity of the tax system, while also reshaping it to reward investment, innovation and growth.

IMPACT ON MANUFACTURERS

Canada’s high business costs and eroding tax competitiveness are creating significant challenges for Canadian manufacturers. Manufacturers are:

  • Underinvesting in machinery, equipment and new technologies;
  • Having difficulty competing in global markets;
  • Delaying investments in new facilities and bumping up against capacity constraints; and
  • Lagging their global competitors in productivity growth and innovation.

Most importantly, the tax system penalizes companies from growing beyond a certain size.

CME'S POSITION

CME believes that Canada needs fundamental tax reform to restore our competitiveness and create the conditions needed for businesses to succeed.

Our immediate priorities are:

  • to lower the headline corporate tax rate; and
  • to improve tax incentives to invest in machinery and equipment.

Longer-term, we are pushing for a for a new approach to business taxation. We want to develop a tax system that:

  • Encourages investment in productivity-enhancing machinery, equipment, software and technology;
  • Attracts foreign direct investment to Canada;
  • Encourages innovation and entrepreneurship;
  • Rewards companies for growing, not for being small;
  • Supports workplace training and upskilling; and
  • Enables exports.

How CME is Helping

CME is committed to lowering your business costs and making you more competitive. Our National Policy Team is working to:

  • Reduce your overall tax burden;
  • Have all carbon pricing revenues collected from manufacturers be re-invested in the sector;
  • Modernize and lighten your regulatory compliance burden; and
  • Implement tax reform that rewards your company for growing.

To get involved with CME or to provide comments on our position, please contact CME Senior Vice President Mathew Wilson at Mathew.Wilson@cme-mec.ca.

Graph Canada's business tax burden is bucking international trends

Graph Where does Canada have a cost advantage over the US?