U.S. tax reform has changed everything — even if the prime minister refuses to believe it. Justin Trudeau evidently missed the news that companies in the U.S. have been using the sudden shift to lower corporate taxes to shower bonuses and raises on workers, and plowing yet more investment into new productivity and growth. In his speech to the World Economic Forum in Davos Tuesday, Trudeau offered his own ill-informed approach, saying he would refuse to try competing with U.S. business tax cuts because "People have been taken advantage of, losing their jobs and their livelihoods ... (as) companies avoid taxes and boost record profits with one hand, while slashing benefits with the other."
This is no time for clapped-out anti-corporate cant. If Canada fails to respond to America's resurgent competitiveness, it's at our peril. The old rules no longer apply. Pre-2018, companies looking to invest in North America knew they had a business tax advantage in Canada, even though it suffered from having smaller market than the U.S., a weaker labour pool and colder climate. With NAFTA, businesses operating in Canada could also count on decent access to the U.S. market, despite all the border frictions that come from dealing with two different regulatory systems.
Now, there's no certainty that NAFTA access is going to last, while there's absolute certainty that U.S. tax reform is real, it's here, and its impact has turned Canadian tax competitiveness upside down. Our recent lower-tax advantage has become a higher-tax handicap.
Our recent lower-tax advantage has become a higher-tax handicap
We now tax large corporate investments by about 10-per-cent more compared to the U.S. Our personal income and sales taxes are higher. And we're increasing levies on energy, which was already being taxed higher than in the U.S. Small- and medium-sized business owners in the U.S. will be paying lower taxes than ours by a wide margin.
We aren't just about to lose a whole lot of business. Our governments can expect to see revenues take a long slide. Tax reform turned already competitive corporate tax rates in states like Ohio, Washington and Texas into a much better deal than what Canada offers, which will encourage companies to shift corporate profits south.
Limits in the U.S. on deducting interest costs as well as loss limitations will encourage multinationals to shift costs out of the U.S., relocating deductions to Canada. And we'll see American-owned companies start transferring money from Canada to U.S. headquarters. They'd rather use it down there to pay down debt, reinvest in the U.S., buy back shares, and — as companies from Apple to Walmart have already begun doing — raise wages to compete in the tight American labour market.
Canada was already suffering from lacklustre investment before U.S. tax reform came along
What should Canada's governments do? So far, they've been ignoring their new and sudden lack of competitiveness, but that's no strategy. As the Economic Advisory Council convened by Finance Minister Bill Morneau reported last year, Canada was already suffering from lacklustre investment before U.S. tax reform came along.
http://nationalpost.com/opinion/jack-mintz-if-trudeau-ever-accepts-reality-heres-how-he-can-save-canadas-competitiveness/wcm/0a389037-ed72-42c8-9caa-45991a5581e0
Americans are enjoying a real jobs boom, with higher wages, bonuses and this is only the tip of the iceberg. Canadians are paying for Trudeau's denial.
Step One: Put a halt to planned but ill-advised tax hikes, such as Morneau's planned squeeze on small businesses operating as Canadian controlled private corporations, which will damage private equity and venture capital markets. The rich may be the ones holding most passive assets but their capital is fuel for new businesses. Instead of raising taxes on entrepreneurs — who might already be tempted to move to the U.S., the U.K., or other jurisdictions with lower personal tax rates — we should look at removing tax disadvantages, not increasing them.
Step Two: Lower personal taxes by raising the threshold for tax brackets. The top rate in the United States applies at US$500,000 (for individuals) or US$600,000 (for couples). In Canada, the highest rate kicks in at a measly US$165,000. And there should be no one paying more than 50 per cent, as there is now, whether it's top earners or low-income Canadians whacked by high marginal rates from income-tested benefits and personal taxes as they're trying to get ahead.
Both federal and provincial corporate income tax rates should be reduced by two points each
Step Three: To ensure Canada remains attractive for business investments, both federal and provincial corporate income tax rates should be reduced by two points each so that Canada's corporate income tax rate at 23 per cent would be close to even low-tax U.S. states. Some of the lost revenue could be made up by dumping pointless incentives — a recent paper by John Lester at Calgary's School of Public Policy calculated that there are billions of dollars in subsidies that do more harm than good among the four biggest provinces and at the federal level.
Canada also has relatively weak thin-capitalization rules that make it easy for companies to dump debt into Canada. We could further tighten up on these given that the new U.S. rules discourage debt financing. Other countries like Australia have developed approaches we should consider.
Step Four: If we're feeling really bold, we can shift from income-based taxes to consumption-based levies. Removing income taxes on savings would help liberate stock and bond markets. Making greater use of GST/HST is sensible as a replacement for high marginal personal tax rates.
http://nationalpost.com/opinion/jack-mintz-if-trudeau-ever-accepts-reality-heres-how-he-can-save-canadas-competitiveness/wcm/0a389037-ed72-42c8-9caa-45991a5581e0
Step Five: Get the provinces into the act. Their land-transfer taxes are highly distortionary and impossible to apply properly on hard-to-define commercial property purchasers. Some provinces should look to adopt a sales tax harmonized with the GST to remove taxes on capital and intermediate purchases. Alberta can create a whole new Alberta tax advantage by slashing income taxes and replacing them instead with a provincial sales tax. (Or at least use revenues from the carbon-tax grab to lower personal taxes — or to lower corporate taxes, giving back to businesses who have lost competitiveness due to the government's imposed higher energy costs.)
These are all smart tax policy ideas regardless of what the rest of the world is doing. But now that the U.S. has completely flipped the competitiveness equation with its tax-reform bombshell, they sound smarter than ever. And they're certainly a better plan than sitting on our hands and watching businesses and tax revenue drain away to Donald Trump's U.S.A.
http://nationalpost.com/opinion/jack-mintz-if-trudeau-ever-accepts-reality-heres-how-he-can-save-canadas-competitiveness/wcm/0a389037-ed72-42c8-9caa-45991a5581e0
In addition to these steps, do something on the regulatory side like a fast track process for getting coastal pipelines in the ground and LNG terminals built. Canadians deserve an investment boom too.
And on top of all this, Trump isn't let fake rapefugees rape American taxpayers.
If, in 4 years, the world recognises that Trump has indeed made his country great again, the world will never be the same again.
Quote from: "Bricktop"
It's already in better shape than when he took office.
If nothing else, I wish the prime minister and our premier would reconsider costly carbon taxes..
It really hurts working people and doesn't stop the climate from changing.
Canada stuck on sidelines as U.S. oil boom creates jobs, curbs emissions
The U.S. oil sector is booming, while our oil and gas sector is looking forward to another year of uncertainty, low prices and increasing tax burdens.
Oil prices are rallying, but instead of reaping the benefits Canadian oil and gas producers are stuck on the sidelines while their American counterparts are riding them with all they've got.
Indeed, a tale of two oil and gas sectors is emerging. On the Canadian side, the mood is subdued, budgets for 2018 are flat relative to last year, and job creation has taken a back seat to automation.
The Canadian sector is held back by pipeline bottlenecks that are depressing both oil and gas prices (WTI rose near US$64 a barrel Thursday, while Western Canadian Select was trading just above US$37), governments that are more concerned about transitioning to renewable energy, investors who've moved on to better and faster opportunities elsewhere.
On the U.S. side, optimism is strong, thanks to the U.S. industry's success in producing shale gas and tight oil and in crushing barriers to export the new production globally, plus support from a president whose only concern about fossil fuels is that there should be more.
Jack Gerard, president of the American Petroleum Institute (API), reflected the U.S. industry's buoyancy in his annual state of the industry address this week.
"We have taken the nation from energy scarcity to energy abundance, from making products abroad to a rebirth of U.S. manufacturing," he said in Washington Tuesday. "From energy as a major pocketbook issue to lower gasoline, diesel, electricity and home heating costs. And today we are increasing development as we're contributing to lower greenhouse gas emissions – a reality many believed was implausible, if not impossible."
Gerard credited industry innovation and technological breakthroughs for his country's ascent to the world's largest producer of natural gas, oil and refined products. This year, the U.S. is expected to produce more than 10 million barrels a day, elevating itself to the status of one of the world's largest oil producers alongside Saudi Arabia and Russia.
Meanwhile, the API says
The API is also optimistic about the sector's employment prospects.
"Women and minorities, including African American and Hispanic workers, will fill nearly 40 per cent of those positions. And the contribution of millennials, who make up one-third of the oil and natural gas industry's workforce today, are projected to grow."
The API welcomed a plan to open new offshore areas for exploration, which it says is an acknowledgement of the industry's advancements in technology to safely access resources, as well as tax reforms that "will allow the natural gas and oil industry to continue building in the millions of jobs we support and billions we invest into the U.S. economy every year."
The coming big-ticket items are a tanker ban off the Canadian West Coast, reforms of federal regulatory reviews of major projects, tougher methane emissions regulations, and national carbon pricing.
That's in addition to upheaval from continuing lack of energy export infrastructure – oil and gas pipelines and LNG terminals.
"Canadian oil prices have completely de-coupled from global benchmarks – with the current strip implying the widest heavy differential in about three years at US$20 a barrel in 2018," Peters & Co. analysts say in a recent outlook report.
And there isn't a quick fix. Canadian oil supplies, which are growing with the completion of big oilsands projects will match pipeline capacity this year and next, Peters said. Of the three pipelines at various stages of approval, only Enbridge's Line 3 replacement has a high probability of being in service by 2020, according to Peters, while due to continuing delays both Keystone XL and the Trans Mountain expansion are anticipating in service dates after 2020.
The story is even bleaker on the gas side, where pipelines are full now and export capacity not available until a liquefied gas industry takes off.
The upshot is that capital spending in Canada is expected to stay flat at $51 billion this year in Canada, though oilsands spending will decrease by $2.8 billion to $13.6 billion, or about 60 per cent less than before oil prices crashed in 2014, and spending on the conventional side increasing to $37.5 billion, up $2.4 billion.
Meanwhile, the Alberta government is expected to collect a staggering sum in carbon payments from the oilsands alone – more than $1.1 billion by 2025, from $300 million in 2017.
The U.S. Permian basin, where there are no such payments, is the new hot spot. Spending is expected to increase to about US$40-US$45-billion this year, from US$35-billion in 2017, Peters said.
Here's the kicker:
http://business.financialpost.com/commodities/energy/u-s-oil-boom-creating-jobs-and-curbing-emissions-in-contrast-to-restrained-canadian-energy-policy
Good jobs, growth, reduced deficits and more disposable income are not overrated Mr Trudeau and Ms Wynn.
I hope my husband's company doesn't give up on Canada.
:sad:
Quote from: "Fashionista"
:sad:
It won't be your old man's company giving up on Canada. It is the government of Canada giving up on us.
Justin Trudeau so masterfully and boldly took in the refugees that Donald Trump rejected without hesitation. What a great leader.
Quote from: "Lance Leftardashian"
Fuck off f@ggot.
I'm just curious if anyone saw the American state of the union address last night and if so what did you think?
I did. Though he was at top of his game and covered plans for most (if not all) of the things he has promised ... what has been achieved, what was to be achieved etc.
Demoncrats hurt themselves badly .. not only not standing, but scowling, looking angry ALL the time ... including for mention of cops, military, wage increases, bipartisan help for common issues, black employment at all time high, companies returning to the US (will pay taxes and employ people), .. even for 12 yr old who organized flags for 1000s of troop graves etc. etc. etc.
"Selected" moments of course, but faces tell the sad tale - with NO letup beginning to end
https://www.youtube.com/watch?time_continue=70&v=qd_a6ilbNLQ
The democrats have nothing positive to offer America. they have 3 main modes--1. Spew hate against Trump, 2. Yell racism and 3. Try to get as many illegals as they can into the country.
Even space isn't as vacuous.
I know that historically the other party does well in the election 2 yrs after a new president, I'm thinking that those in the middle will not respond well at the polls to this behavior + the party is moving sooooo far left .. too far for most people .. and I believe a disastrous mistake ... + Bernie will help force them even further left and further away from real people in the middle
I know Justine is subject on this one, but he's moot. America will lead the way and direct the action here. It will become more and more interesting as T succeeds to make the US strong and get far more working for higher wages etc.
Damn I so wish we we had whatsherface here as things keep improving for Americans thanks to her illusionary crotch grabber ac_biggrin
Quote from: "Fashionista"
I did. He had a bit of something for everyone(except for fiscal conservatives), but of course the Democrats will never be happy.
https://www.youtube.com/watch?v=Cbd2YFCHn2U
So nice that Jo replied to your OP elsewhere
Jo, the gift that never stops giving :laugh:
Quote from: "cc"
Jo, the gift that never stops giving :laugh:
JOE enjoys cross forum drama.
ac_boring
The great division of ALL western societies is caused by leftards.
Quote from: "cc"
Jo, the gift that never stops giving :laugh:
The Joe and Eddie forum. :negative:
Quote from: "seoulbro"
Quote from: "Fashionista"
I did. He had a bit of something for everyone(except for fiscal conservatives), but of course the Democrats will never be happy.
It was conciliatory for sure, but like you said, the jack ass party doesn't care.
Lots of big ticket items proposed like infrastructure spending and lowering the price of prescription drugs without any mention of where the money is coming from to pay for it.
Quote from: "Shen Li"
Quote from: "seoulbro"
Quote from: "Fashionista"
I did. He had a bit of something for everyone(except for fiscal conservatives), but of course the Democrats will never be happy.
It was conciliatory for sure, but like you said, the jack ass party doesn't care.
Lots of big ticket items proposed like infrastructure spending and lowering the price of prescription drugs without any mention of where the money is coming from to pay for it.
The pro growth side of Trump's agenda is working. But, the spending side has to be addressed or he's no better than Obama. That will not happen until after mid terms, if at all.
Quote from: "seoulbro"
Quote from: "Shen Li"
Quote from: "seoulbro"
Quote from: "Fashionista"
I did. He had a bit of something for everyone(except for fiscal conservatives), but of course the Democrats will never be happy.
It was conciliatory for sure, but like you said, the jack ass party doesn't care.
Lots of big ticket items proposed like infrastructure spending and lowering the price of prescription drugs without any mention of where the money is coming from to pay for it.
The pro growth side of Trump's agenda is working. But, the spending side has to be addressed or he's no better than Obama. That will not happen until after mid terms, if at all.
I don't believe the US has ever intended to pay back its creditors. A big conflict or event will give them an excuse to renege.
Washington and Ottawa as well as the provinces and states made an effort in the 90's.
Maybe but more symbolic than anything.
Quote from: "seoulbro"
Fuck, I miss Ralph Klein. Most successful elected leader I've ever seen.
Quote from: "Shen Li"
Quote from: "seoulbro"
Fuck, I miss Ralph Klein. Most successful elected leader I've ever seen.
I miss Mike Harris, Jean Chretien, Newt Gingrich and the entire 90's. During that brief that started around 1995, governments respected taxpayers and liberty. Today, the exact opposite.
Who benefits from the US making that country a prime destination for investment in natural resources? American workers who have more jobs available with better pay and benefits. Local governments who have money for roads and schools.
Who pays the price for Trudeau and the provinces obstructionism on resource development? Working Canadians who are denied opportunities to provide for their families. Provincial governments who have less revenue for health care and the feds who continue to raise taxes instead of encouraging investment to pay the bills.
Quote
So why is this happening?
Even as the West Texas Intermediate (WTI) oil price surges past $60 per barrel, Canada is unable to realize the full benefits of higher prices due to pipeline obstructionism and regulatory uncertainty from the Trudeau government in Ottawa and key provinces including Alberta.
As a result, Canadian oil and gas producers are unable to reach new Asian markets, costing the Canadian economy billions of dollars
In fact, the deep discount for Canadian heavy crude is only expected to grow larger in 2018 as Canada's oilsands output grows but there are no additional transportation options to get crude to market. Export pipelines are already running close to their limits and no new export pipelines are expected to be built before late-2019. Rail companies are also reluctant to expand capacity due to concerns that demand for their service is short-term.
Sadly, while Canada is stuck on the sidelines, the United States is becoming one of the world's largest oil producers. Sources predict the U.S. Permian Basin, which extends from Texas to New Mexico, will be one of the world's "hottest oil plays" in 2018, with spending expected to increase by more than US$5 billion this year. Meanwhile, spending in Canada's oil patch is expected to stay largely flat.
To make matters worse, the Trump administration is implementing sweeping energy-sector reforms including cutting taxes, suspending regulations, opening additional lands, and dropping international greenhouse gas obligations. Meanwhile, Canadian governments impose harsher regulations, increase carbon taxes, cap oilsands emissions, ban tanker traffic on the West Coast, and change regulatory requirements for major projects.
The U.S. advantage over Canada is reflected in the Fraser Institute's latest Global Petroleum Survey, which allows investors to evaluate policies that govern the oil and gas industry (royalties and taxes, duplicative regulations, etc.) and make jurisdictions attractive — or unattractive — to investment.
In this year's survey, six of the world's top 10 jurisdictions are in the U.S., compared to only two in Canada (Newfoundland and Labrador, and Saskatchewan). Texas, the most attractive jurisdiction in the world based on policies, and New Mexico (23rd) rank well ahead of Alberta (33rd). While the U.S has an abundant and low-cost shale industry, policies still matter and investment dollars flow to jurisdictions that encourage investment.
This raises a key question for Canadian policymakers to consider:
As U.S. states ramp up efforts to attract investment, and succeed, Canada must also become competitive.
http://torontosun.com/opinion/columnists/guest-column-government-policy-hampers-canadas-oil-industry-as-u-s-accelerates
Trump is helping the American middle class and Trudeau is making ours extinct.