Feds mulling tar­geted mea­sures to bol­ster com­pa­nies


OT­TAWA Fi­nance Min­is­ter Bill Morneau is look­ing at tar­geted mea­sures to en­hance Canada’s com­pet­i­tive­ness rather than broad-based cor­po­rate tax cuts, sources say.

For months, the fed­eral Lib­er­als have been un­der pres­sure from busi­ness lead­ers to re­spond to a U.S. tax over­haul that many warn has put Canada at a dis­ad­van­tage.

Morneau told re­porters this week that he hadn’t ruled any­thing out when asked whether tax cuts would be part of his com­pet­i­tive­ness plan.

But Morneau has been meet­ing with busi­nesses across the coun­try in an ef­fort to find the best way to deal with the U.S. changes. And sources with knowl­edge of the fed­eral ap­proach who spoke on con­di­tion of anonymity say his em­pha­sis has been con­sis­tently on tar­geted mea­sures.

Morneau in­tends to an­nounce plans in his fall eco­nomic up­date to bol­ster Canada’s com­pet­i­tive­ness.

The Trump ad­min­is­tra­tion’s changes in­clude big tax re­duc­tions for busi­nesses and loos­ened reg­u­la­tions, which have cre­ated fears Canada has lost part of its edge as an in­vest­ment des­ti­na­tion.

In­dus­try stake­hold­ers have been call­ing for lower taxes — but a cut to the fed­eral cor­po­rate rate would come at a cost. A tool on the par­lia­men­tary bud­get of­fi­cer’s web­site es­ti­mates that a one-per­cent­age point re­duc­tion to the rate would trim about $1.7 bil­lion per year from fed­eral rev­enues.

There are also rec­om­men­da­tions that Morneau con­sider a cheaper op­tion: al­low­ing all firms to im­me­di­ately write off new equip­ment pur­chases.

The U.S. tax pack­age en­ables Amer­i­can firms to im­me­di­ately write off the full cost of new ma­chin­ery and equip­ment. Canada al­ready of­fers this pro­vi­sion for its man­u­fac­tur­ing sec­tor and there are calls for it to be ex­panded to cover all in­dus­tries.

Bill Morneau


Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.