2015 Tax-Competitiveness Report

Still, other important peer countries have been working to lower theirs; notably Denmark, Japan, France, Portugal, Switzerland and the U. K. As a result of their cuts, and because of changes to policies in Canada that have increased METRs here, Canada has sunk from having the 16th-highest burden on capital in the OECD (which was at least in the middle of the pack) to having the 13th highest. [...] With the U. S. election of Donald Trump and a Republican Congress promising to reduce corporate income tax rates, as well as the recent affirmation by British Prime Minister Theresa May to lower the U. K. corporate income tax rate to 17 per cent, the pressure will be to reduce, not increase corporate income taxes in the next several years. [...] Its effective corporate tax rate on new investment has risen from 17.5 per cent in 2012 to 20.0 per cent in 2015, an increase of 14 per cent over the period due primarily to higher provincial corporate income tax rates; the B. C. government’s reversal of its sales tax reform, with its return to the former provincial retail sales tax; and reductions in tax preferences at federal and provincial leve [...] With the U. S. election of Donald Trump and a Republican Congress promising to reduce corporate income tax rates as well as the recent affirmation by the Prime Minister May to lower the U. K. corporate income tax rate to 17 percent, the pressure will be to reduce, not increase corporate income taxes in the next several years. [...] This can largely be attributed to increases in the corporate income tax rate by governments in New Brunswick, Alberta, and British Columbia, as well as B. C.’s abandonment of the creditable HST and return to the provincial retail sales tax in 2013.