Oh, Yeah, Canada!

By April 24, 2008Taxation, Trade

From Mary Anastasia O’Grady, writing in the Wall Street Journal’s daily political e-mail, “Political Diary”:

Canadian Finance Minister Jim Flaherty was in New York yesterday to give a speech touting the economic achievements of the relatively new government of Prime Minister Stephen Harper. He stopped by the Journal offices to give a preview. Since coming to office two years ago, Mr. Flaherty told us, the Harper government has succeeded in steadily whacking down the corporate income tax to 18% from 22%, and is headed for 15% by 2012. Aiming for a total tax burden or no more than 25%, Ottawa has also been pushing the provinces to cut their own taxes on business profits. Ontario (Canada’s Taxachusetts) has been a notable holdout and some in the Canadian press even accused Mr. Flaherty yesterday of leaving Ontario out of his sales pitch to U.S. investors. Mr. Flaherty joked in return that he was “gently prodding [Provincial] Premier [Dalton] McGuinty in my own subtle way to reduce business taxes.”

Canada’s cuts come none too soon. Business tax-cutting has been a global phenomenon, with the OECD countries now averaging less than 27%, down from 38% in 1993 (the U.S. average is 40%). It’s also of a piece with the Harper government’s broader pro-growth agenda, which includes free trade deals with Colombia, Peru and South Korea and work to speed up transit of goods at the Windsor-Detroit border crossing.

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