June 18, 2018
Canadian Manufacturers & Exporters (CME), together with BDO Canada, released today “Restoring Canada’s Tax Advantage: A Need for Tax Reform”. The report based on survey results, as well as research and extensive consultations with tax experts, makes the case for why tax reform is urgently needed and lays out specific reform and actions to restore competitiveness.
A competitive business environment is critical to the long-term success of the Canadian economy. Good tax and regulatory policy encourages capital spending, attracts foreign direct investment, and drives export growth,” said Dennis Darby, President & CEO of CME. “Canada’s business environment has been gradually deteriorating in recent years. Our businesses have been struggling to compete globally and foreign investment is passing us.”
“A wide range of tax and regulatory measures are adding to the cost and uncertainty of doing business here at home,” declared Darby. “Meanwhile, tax reform south of the border has eliminated Canada’s previous tax advantage over the US and is threatening our competitiveness even further.”
The report recommends that the Government of Canada restores business competitiveness by:
- Immediately lowering the headline corporate income tax rate from 28 per cent to 20 per cent. The reduction should be evenly split between the two levels of government;
- Matching the accelerated capital cost allowance provisions now in place in the United States, giving businesses an immediate 100 per cent tax write-off on qualifying capital asset purchases.
- The government should appoint a Royal Commission on Taxation chaired and staffed by tax and economic policy experts to review Canada’s tax system. The Commission should be tasked with making wholesale reforms that modernize and simplify Canada’s tax code.
“The report summarizes the perspective of manufacturers and other businesses.” added Darby. “When it comes to tax reform and competitiveness, the government should listen to the valuable insight of the Canadians most directly responsible for economic growth: our business leaders, innovators and entrepreneurs.”
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Since 1871, Canadian Manufacturers & Exporters has been helping manufacturers grow at home and, compete around the world. Our focus is to ensure manufacturers are recognized as engines for growth in the economy, with Canada acknowledged as both a global leader and innovator in advanced manufacturing and a global leader in exporting. CME is a member-driven association that directly represents more than 2,500 leading companies who account for an estimated 82 per cent of manufacturing output and 90 per cent of Canada’s exports.
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