U.S. bor­der tax would have been im­ped­i­ment: PM

The Hamilton Spectator - - CANADA & WORLD -

KENORA — The Trump ad­min­is­tra­tion’s de­ci­sion to drop a pro­posed bor­der tax re­moves the threat of a trade war just as Canada, Mex­ico and the United States pre­pare to launch ne­go­ti­a­tions for a new North Amer­i­can Free Trade Agree­ment, re­lieved Cana­dian busi­ness lead­ers say.

But it also po­ten­tially re­duces the pres­sure on Prime Min­is­ter Justin Trudeau to slash Canada’s cor­po­rate tax rate to keep pace with a promised steep re­duc­tion in the United States.

The bor­der ad­just­ment tax was in­tended to off­set the mas­sive rev­enue hole Pres­i­dent Don­ald Trump’s planned com­pre­hen­sive tax re­form — in­clud­ing cut­ting the cor­po­rate tax rate to 15 per cent — will blow in the Amer­i­can bud­get.

U.S. of­fi­cials said Thurs­day that they’re “con­fi­dent” a tax on im­ports is no longer needed to pay for broader tax re­form.

But pri­vately some Cana­dian busi­ness lead­ers be­lieve the de­ci­sion to scrap the bor­der tax means the promised re­duc­tions in per­sonal and cor­po­rate taxes will have to be scaled back.

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