Goodale: Conservatives Cut Taxes for Big Corporations
Nearly four years ago in 2007 – before any recession and while Canada was still surfing on budgetary surpluses built-up by Paul Martin – the Harper government announced further reductions in the federal income tax rate for large corporations, to come into effect this year and next.
I say “further” tax reductions because the rate for these corporations had already been slashed by 35%. It was already the second-lowest in the G-7. It was already 10-points (or 25%) below the American rate.
In other words – BEFORE these latest Conservative cuts – corporate tax rates in Canada were already fully competitive, as confirmed by the Bank of Canada last year. Nevertheless, the Harper government insisted on cutting more.
But something serious happened between 2007 and today. The US housing and banking system imploded, plunging the world into recession and worsening Mr. Harper’s $56-billion deficit.
Suddenly his extra corporate tax cuts didn’t make sense any more, because the surplus was gone. They now have to be paid for with borrowed money — $6-billion per year.
We said put them on hold! Until the country gets back into surplus, further tax cuts for wealthy corporations are simply not prudent. This is true for three compelling reasons:
1. As mentioned above, Canada’s corporate tax rate is already competitive.
2. The Finance Department itself says such tax cuts are NOT efficient job-creators, rebutting false theories imported from the Republican/Tea Party in the US.
3. Other priorities, more vital to average families, are crying out for attention – like household debt, the high cost of getting kids through college or university, adequate child care, the pressures of caring for elderly parents, and decent pensions.
It’s time to save that $6-billion per year – easing the mortgage Conservatives have loaded onto our children’s future and investing now in the practical needs of families.
Ralph Goodale, M.P.