High taxes killing Canada’s competitiveness with the U.S

Accountants association says survey findings reinforce the need for a comprehensive review of Canada's tax system

Mario Toneguzzi on Canada less competitive than the U.S because of high taxesCanada continues to be seen as less competitive when compared with the United States, says a new survey of business leaders by the Chartered Professional Accountants of Canada.

And the quarterly survey of professional accountants in business leadership roles, which was released on Tuesday, cites taxation as a reason for that.

The CPA Canada Business Monitor (Q2 2018) found that 68 per cent of the respondents view Canada as a less competitive place to invest and do business versus the United States when compared to a year ago. That viewpoint has remained basically the same since the previous quarter.

Canada’s overall tax burden was given as the primary reason for that sentiment by 29 per cent of respondents. Fourteen per cent listed U.S. tax reform.

“Canada’s tax system is fundamental to creating a competitive environment,” said Joy Thomas, president and CEO of CPA Canada, in a statement. “The survey findings reinforce the need for a comprehensive review of Canada’s tax system, led by an independent expert panel that would strive to reduce complexities, address inefficiencies, improve fairness and ensure economic competitiveness.”

Other survey findings include:

  • 32 per cent expressed optimism about the prospects for the Canadian economy over the next 12 months, unchanged from the previous quarter but down from 50 per cent in the second quarter of 2017;
  • the top two challenges to the Canadian economy identified by survey participants in the latest survey are U.S. trade protectionism (39 per cent) followed by uncertainty in the Canadian economy (14 per cent);
  • company optimism sits at 53 per cent – this is how those surveyed feel about the prospects for their own companies over the next 12 months;
  • 68 per cent say revenues will increase in the next year and 60 per cent say profits will increase;
  • 58 per cent say they have difficulty finding enough skilled workers and professionals to fill certain positions;
  • the positions hardest to fill over the past two years were: skilled trades (37 per cent), skilled/IT positions (22 per cent) and middle management (17 per cent);
  • 83 per cent say the federal government should continue to warn Canadians to reduce their level of personal debt;
  • 41 per cent say the level of personal debt is a threat to future demand for their company’s products and services.

Respected business writer Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.


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