Businesses demand lower taxes
CME, a business network whose members account for 75 per cent of the Canadian industrial output and 90 per cent of exports, says that while the government has committed to reducing general corporate tax rates, it is providing no relief to manufacturers.
"Canadian manufacturers directly and indirectly generate one of every two jobs in Canada," says CME President and CEO Perrin Beatty. "Manufacturers are facing unprecedented international pressures, and their tax rates must be competitive with those in other jurisdictions, which they certainly are not today.
"Competitive taxation is key to any strategy that will help Canada become more productive and improve the standard of living of all Canadians; yet corporate tax rates in Canada continue to be higher than those of our major competitors."
The call to cut business taxes comes at a time when Canadian industry performance continues to lag behind other countries, but the Prime Minister will probably not promise more tax cuts anytime soon. As reported in The Globe & Mail, in a late August Liberal caucus meeting, Chrétien refused to commit himself to further tax cuts and lists as his priorities "new spending on native people, the environment, and research and development."
Finance Minister Paul Martin has a different view. The Globe & Mail reported caucus sources saying the Finance Minister thinks taxes "must continue to come down" to ensure the Canadian system is competitive with the United States.
While Chrétien and Martin send conflicting messages on the need for further tax cuts, Canadian business owners are left to grapple with a competitiveness problem that "can only be solved through innovation — by developing and applying new ideas, business practices, skills and technologies," says Beatty.
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