Flaherty Touts Canada’s Low Tax Agenda
Tuesday November 15 2011 | 07:41 AM

The Canadian government is committed to making the country a strong destination for investment and jobs with a competitive tax system, Finance Minister Jim Flaherty has said.

Speaking to the Calgary Chamber of Commerce, Flaherty emphasized the government's ongoing work in implementing "a bold tax reduction plan to brand Canada as a low business tax jurisdiction". He noted that Canada now enjoys an overall tax rate on new business investment that is substantially lower than the rest of the G7, and below the average of the member countries of the OECD. In January, 2012, the federal business tax rate is set to fall by a further 1.5% to reach 15%.

Flaherty added that, in addition to reducing the tax burden on businesses, the government has introduced measures targeting individuals. It has followed through on its commitment to cut the goods and services tax by 2%, and has slashed personal income taxes. Flaherty stressed that: "In total, our government has reduced taxes on individuals, families and businesses by an estimated CAD220bn (USD216bn) over 2008–09 and the following five fiscal years".

Flaherty also unveiled an updated version of the country's economic and fiscal projections, committing the government to its low-tax plan for jobs and growth. The update includes provisions for a reduction in the maximum potential increase in employment insurance premium rates in 2012 to CAD0.05 from CAD0.10 to further help Canadian workers and employers. It also allows for the temporary extension of an enhancement to the Work-Sharing Program, which the government contends has helped stabilize Canada’s job market, by providing an additional extension of up to 16 weeks for active, recently terminated or new work-sharing agreements until October, 2012.

Flaherty said: “This plan is reasonable and realistic. Our deficit reduction goal is not for deficit reduction in and of itself; the motive is good fiscal stewardship. Just as families practise good household management by balancing their books, so must the government.”