Ottawa’s taxes and regulations slowing economy

‘Meh,” probably isn’t a technical economics term.

Still, it pretty much sums up the Organization for Economic Co-operation and Development’s forecast for Canada’s economy for at least the next couple of years.

Could be worse, could be way better. Mostly, it’ll be “meh.”

The Paris-based OECD — essentially the membership organization of the world’s developed countries — said last week that our GDP growth will be OK. Not great but not a recession, either. Employment growth will be slow, so will any rise in incomes, but at least unemployment shouldn’t increase and inflation won’t be out of control.

All-in-all, Canada’s economy will be, well, “meh.”

Why?

Taxes and regulations, but mostly taxes.

Since 2015, when the Liberals and New Democrats took over Canada and Alberta, respectively, federal and provincial taxes on individuals and corporations have sucked much life out of our economy, along with insane new environmental regulations that are scaring away foreign investment in our energy sector.

Yes, the OECD also points to uncertainty about NAFTA. So Trump haters can blame U.S. President Donald Trump’s trade strategy a bit, too.

But in recent years, federal and provincial governments have raised taxes so much that Canada has become less competitive.

A report last week for the Alberta government, Export Development Canada, the Petroleum Services Association of Canada, Canadian Global Exploration Forum and JWN, an energy industry media group, determined the best investment opportunities for Canadian oil companies were in … the U.S.

How ironic. A report for the Alberta government and the federal government’s export agency is encouraging Canadian companies to ship their money south.

Crazy public policies are acting like rocks on the tail of the Canadian economic bird, changes such as subjecting any new energy development to “gender-based assessments” or making pipelines responsible for all the emissions created by the oil they carry, even emissions from the oil after it leaves the pipeline.

But according to the OECD, the biggest problem the Canadian economy has at the moment is taxes. We are raising ours rapidly while our largest trading partners, the Americans, have radically reduced at least their corporate taxes since last November.

In Alberta, for instance, the top corporate tax rates have increased by 50 per cent since Premier Rachel Notley and the NDP took over. The Alberta Advantage is gone. Alberta’s corporate tax rate is now as high as most other provinces’.

Under the Harper government, Ottawa worked hard to make Canada’s tax rates slightly lower than American rates. That resulted in corporate investment shifting northward for a decade or so.

But now the combination of uncompetitive tax rates, huge government deficits and “social licence” regulations has scared away tens of billions of investment dollars (along with the jobs those dollars would have created).

The stubbornness of the B.C. government surrounding the Trans Mountain Pipeline — and the unwillingness of the Trudeau Liberals to do anything strong about B.C.’s obstructionism — has foreign investors worried, too.

Here’s one last insanity that is contributing to our “meh” performance: Fossil fuels brought into Canada are not subjected to carbon taxes or wacky environmental regs.

Millions of tonnes of U.S. coal are shipped to Asia each year through the Port of Vancouver without ever being charged a cent of federal or provincial carbon tax. The B.C. government, which is doing everything it can to stop Alberta oil, does nothing to limit dirtier U.S. coal.

Meanwhile, none of the 700,000 barrels of foreign oil imported into Canada every day is subjected to the environmental regulations every ounce of western Canadian oil must meet. Why would foreign investors pump money into Canada, only to have their oil or coal blocked and their income taxed through the nose, when they can import fossil fuels and get around the taxes?