A Calgary economist says Canada’s corporate tax rate is stifling investment.
Speaking to News Talk 770’s Danielle Smith, Jack Mintz, with the University of Calgary, said Canada has been steadily raising business taxes at the federal and provincial levels since 2015. He said it has cost the country $6 billion in investment since 2012.
Mintz said a number of tax preferences for businesses at the provincial level have also been cancelled, which has made Canada less attractive to investors.
“We’ve been raising our tax on businesses while other countries have been lowering it,” Mintz said Monday.
He said it is consumers who end up shouldering the burden of a higher corporate tax rate.
“In many countries there’s an understanding that corporate taxes are not really paid by corporations, they’re paid by people,” he said. “What studies have now shown is that a significant burden of the corporate tax is on workers themselves.”
Mintz added the tax is often passed on to workers through lower wages and higher consumer prices.
He told Danielle Smith the one type of corporate tax that does pad the wallets of high-income households is the small business tax.
“Instead of having an unincorporated business that is subject to personal taxes, they can create a corporation and avoid paying personal taxes,” he explained.
Mintz argues there are more effective tax incentives to help small businesses grow. He recommends the government move to a single corporate income tax.