OTTAWA — The federal government will roll out an update to its fiscal plan Wednesday to help Canada compete for investment dollars following major American corporate tax reforms — but it’s up for debate whether Canada is facing a serious investment challenge.
The business community has called on federal Finance Minister Bill Morneau to respond to the Trump administration’s tax and regulatory overhaul with significant changes of his own in Canada —including corporate tax cuts.
The government, however, has signalled it will be focused on targeted measures to attract investment, rather than broad-based corporate tax reductions that would lower federal revenues by billions of dollars per year.
Morneau will lay out his plan in Wednesday’s much-anticipated fall economic statement — which will arrive after months of debate on whether Canada has lost its edge as an investment destination, and by how much.
Canada has heard many warnings from the business community that American tax reforms will have a big, negative impact on investment here — but some experts insist the country has performed well even after the U.S. overhaul.
Economist Randall Bartlett says investment in Canada has been pretty strong through the first part of 2018 and he believes it’s difficult to draw a direct link between the country’s performance and the U.S. tax changes.
Bartlett, who works for a University of Ottawa think-tank headed by former parliamentary budget watchdog Kevin Page, says people on both sides of the debate seem to be cherry- picking data points to support their interests.
Andy Blatchford, The Canadian Press