CALGARY – A new report from the Canada West Foundation recommends cutting business taxes and harmonizing provincial sales taxes with the GST, improving western Canada's ability to compete
Business Taxation in Western Canada: Settling for a Personal Best, written for the Canada West Foundation by University of Calgary economics professor Kenneth J. McKenzie, highlights several policy priorities on the business tax front, primarily from the perspective of the four western Canadian provinces. The focus is on taxes that impose on business capital, and therefore impinge upon investment decisions.
“While the perception may be tax cuts for wealthy businesses and CEOs, reducing corporate income tax allows corporations to invest further in their business, which is proven to bring greater benefit and income to both average citizens and the government,” says Canada West Foundation Director of Research Robert Roach.
Also key to encouraging increased investment in western Canada is removing provincial sales taxes on capital inputs, harmonizing provincial sales taxes with the GST. This has already been done in Atlantic Canada, and analysis by the federal Department of Finance indicates that removing sales taxes on capital goods is one of the most beneficial tax reforms.
“The inevitable conclusion is that Canada as a whole, and the western provinces in particular, do not have a particularly competitive business tax regime internationally, though things are improving,” says McKenzie. “While we as a region and as a country want to be ‘going for gold,' it is clear that Canada in general, and the western provinces in particular, are currently not even ‘on the podium.' While some provinces are achieving ‘personal bests,' in an international context we are falling somewhat short.”
McKenzie's paper is part of the Canada West Foundation's Going for Gold Project Research Paper Series. Each paper examines a key issue related to improving western Canada's ability to compete and win in the global economy over the long-term.
Canada West Foundation is a leading source of strategic insight, conducting and communicating nonpartisan economic and public policy research of importance to the four western provinces and all Canadians.
For a copy of this or any other research paper, visit [url=http://www.cwf.ca]http://www.cwf.ca[/url].
