Public debate about how to deal with Canada’s $53.8 billion deficit has largely focused on spending cuts. Prime Minister Stephen Harper has explicitly ruled out the possibility of tax increases (except for an increase in EI premiums), while Liberal leader Michael Ignatieff has suggested a freeze on continued corporate tax cuts until Canada is in better fiscal shape. The New Democratic Party has consistently called for the repeal of corporate tax cuts to restore government revenue. In April, nearly three-fifths of senior executives polled said they believed some kind of tax increase would be necessary to deal with the deficit. So far, however, there hasn’t been much debate about this option in Canada.
While responding to the deficit and appropriately and sufficiently investing in social security may require a rise in several different taxes, today I want to take a closer look at corporate taxation. Read more »