Letter to the Editor – Cornwall Ontario and Area Chamber of Commerce Wants Harper Government to Cut Corporate Taxes – February 28, 2011

Cornwall ON – In 2007, the federal government sought the collaboration of the provinces and territories to keep Canadian industry competitive by driving down business taxes. The plan would have seen combined federal and provincial/territorial corporate income tax rates drop to about 25% by 2013, one of the lowest tax rates in the G8.


The plan is far along and it has been part of the last two federal budgets. Parliament twice voted to approve the plan, but today some Canadian politicians want to abandon it and start raising taxes again. The money, according to those politicians, can be used for government programs.


This is becoming more than just a feud among economists. If the federal budget triggers an election campaign, business taxes may be the main issue, with the parties splitting on competing visions of the role of government and business in building economic prosperity.


No one is arguing the government doesn’t do valuable things with our tax money and our social programs are but one example. But, when the issue is growing the economy and creating new jobs, most people agree that the private sector has to do the job.


Make no mistake; the economy is not out of the woods. Although we have all heard that Canada dodged the worst of the recession, we are still locked in a close relationship with the United States, which was seriously hurt, and is only now dragging its way back to health.


Last year the Canadian economy roared ahead in the early months. Fifty thousand jobs per month were created, housing starts were at an all-time high and consumers were on a buying spree. But as the year went on, the trends changed. As we finished 2010, job creation numbers had fallen to just above 5,000 a month and consumers began staying home and paying off their credit cards.


Canada’s economic recovery achieved momentum thanks to business investment geared towards boosting productivity and competitiveness. In fact, the brightest economic indicators at year’s end were the surveys showing many companies planned to invest in 2011. Almost the worst thing government could do is reverse a commitment and raise business taxes.

Government stimulus was important during the crisis, but it is not the basis of real economic growth. Sustainable growth requires the private sector investment that can generate new jobs and federal revenues to pay down the deficit. The current tax plan, which was supported by both Liberal and Conservative parliamentarians, is essential for that investment.


When larger companies have money to spend, who benefits? Usually, it is the smaller companies. Most smaller businesses don’t sell to the public; they sell to bigger businesses and that’s why they are called suppliers.  Some economists argue that tax cuts don’t always create new jobs but while that is a fair point, all economists agree that high taxes cost jobs.


This isn’t a matter for far-off Ottawa; it’s a real issue here in the Cornwall region. Try as the politicians might to spin the issue, it is still clear — money sent to Ottawa isn’t creating jobs and growth here. We need to stick with the tax reduction plan and leave our money here in the community.


Cornwall & Area Chamber of Commerce

(Comments and opinions of Editorials, Letters to the Editor, and comments from readers are purely their own and don’t necessarily reflect those of the owners of the Cornwall Free News, their staff, or sponsors.)

Best Western Cornwall


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