Another look at taxes

Canada, more than many countries, has embraced the dubious notion that corporate tax cuts are an economic panacea, a sure way to spur economic growth and drive job creation.

Over the past three decades, successive governments, both Liberal and Conservative, have cut the federal corporate tax rate from 36 per cent to 15 per cent, now among the lowest in the developed world and lower than even in the tax-allergic United States. During this time, corporate profits have soared, yet the purported public benefits of these cuts have by and large failed to materialize.

The result of all of this is that governments have less revenue to do what’s needed, our tax system is less progressive and corporations pay a reduced share for our public goods and services even as their profits continue to break records.

In response to the Trudeau government’s ongoing small-business tax reform fiasco, the Senate finance committee recommended that Canada undertake a comprehensive review of our tax system of the kind not seen since the Carter Commission of over 50 years ago. This is exactly what’s needed. The latest revelations about our leaky corporate tax system, on top of the bombshells of the Panama and Paradise Papers, make inescapable the unfairness and inefficiency of our tax system. The challenge won’t be met by mere tinkering.