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Country Rankings - Canada


  • Oct 10, 2017   Canada: blocked ears

    Appropriately enough, I now move north to Canada, a country famed for its forests. But while the US Government is attempting to reduce the tax burden on small businesses, Canada seems to want to go the other way. At least its Government does. Governments these days are fond of claiming their openness, and their willingness to listen to taxpayers. In Canada's case, the Government says it will "act on what it has heard" during a consultation on controversial reform of tax planning rules surrounding the use by middle- and high-income taxpayers of corporate entities as tax planning vehicles. But even without an official consultation exercise, the Government would have been hard-pressed not to have noticed the stir these proposals caused within Canada's business community. Barely a week has gone by since the draft legislation was published that somebody hasn't spoken out in vociferous tones against the reforms. Indeed, the small business community's "spontaneous, grassroots response," as Dan Kelly, President of the Canadian Federation of Independent Business, put it, has been somewhat unprecedented. We know this type of individual tax planning is a very grey area, and it can be difficult to find the line delineating the territory between "acceptable" and "abusive" behavior. Yet governments and lawmakers will insist on setting business taxes much lower than individual taxes, and instead of trying to level the two up, they often prefer to crack down with a legislative sledgehammer. This appears to be the case in Canada, where the Government has badly misjudged the situation, judging by the reaction its proposals. We'll find out soon enough though if it is truly in tune with taxpayers or has selective hearing.
    Source: https://www.tax-news.com/news/Canada_Listening_To_Concerns_Over_Tax_Reform_Proposals____75451.html


  • Sep 01, 2017   Canada: neglect

    Canada's tax regime isn't usually considered as complex as China's (although some taxpayers might be inclined to disagree), but there is a growing sense that the Government is neglecting the tax system. In July this year, the IMF recommended that the Canadian Government undertake a "holistic" review of the tax system, to identify areas for improving efficiency while maintaining the country's competitiveness. The IMF said that the last comprehensive review was carried out in the mid-1980s, while last week, the Fraser Institute said that the average Canadian family spent more on taxes in 2016 than on housing, food, and clothing combined. Small companies in particular have noticed a change in attitude to taxation under the Liberal Government elected two years ago, with the emphasis now firmly on preventing tax avoidance and evasion rather than improving the tax regime for businesses. While many would argue that it is only right that the Government cracks down on dishonest taxpayers, others warn that the severity of the crackdown is coming at the expense of small firms. The Canadian Advanced Technology Alliance went so far as to describe the Government's proposed measures against tax planning strategies as "a wholesale attack on small business." For its part, the Society of Trust and Estate Practitioners said that "this dramatic tax policy change could fuel uncertainty and bring unintended consequences including very significant tax increases that negatively affect entrepreneurs." And these are by no means isolated voices. They are merely the latest in a steady stream of complaints from small firms about tax policy. The Government could even be accused of being anti-small business, given that planned decreases in the small business corporate tax rate were deferred indefinitely in the Liberals' first Budget. If so, it is a strange position for the Government to hold. After all, SMEs employ the vast majority of the workforce in most economies. Doubtless, ministers would vehemently reject such a suggestion, and could probably trot out endless statistics to support the view that small business are thriving under the Liberals, in that way that politicians do but nobody quite believes. Nevertheless, perhaps it's not unreasonable to suggest that the Government has vacated the middle ground between securing the tax base while freeing up honest taxpayers in favor of the former.
    Source: https://www.tax-news.com/news/Tech_Firms_Worried_By_Canadian_Tax_Changes____75078.html


  • Apr 27, 2017   Canada: free

    We often hear how trade barriers hinder trade between nations. But they can also inhibit trade within a country, particularly in ones with federalized systems of government. So, credit is due to Canada for introducing its own internal free trade agreement, which should ease trade in goods and services across provincial and territorial borders. As I've observed here before, trade is something of a touchy subject politically at the moment, and depending on what you believe, free trade either destroys industries and jobs by opening them up to cheap competition with which they cannot hope to compete, or is the bringer of prosperity to all corners of the world. From a purely business perspective, tariff and non-tariff barriers add a further layer of complication to international commerce, especially for companies with long international supply chains, which already battle to remain compliant with complex and shifting domestic tax and regulatory regimes the world over. And what a bizarre situation it is that in some countries, as observed by the Canadian Federation of Independent Businesses, due to internal regulatory differences, it's sometimes easier for individuals and businesses to trade with counterparts half way across the world, than in the province, state, or region next door.
    Source: http://www.tax-news.com/news/Canadian_Governments_Agree_Internal_Trade_Deal____74030.html


  • Mar 30, 2017   Canada: loop the loop

    Canada's small businesses urged the Government to cut corporate tax in the 2017 Budget. What they got instead was something entirely unsatisfactory. It has to be said that the Liberal Government elected in October 2015 hasn't had a great track record on small-business tax issues. After pledging to match the then Conservative Government's plans to continue to reduce the small business tax rate in the lead up to the election, Liberal Finance Minister Bill Morneau promptly backtracked in his first Budget announcement last year, deciding instead to freeze the cut at 10.5 percent and defer any more reductions indefinitely. Since then the Government has focussed its efforts on reducing tax avoidance, and ensuring that the wealthy and large businesses pay their "fair share." This is all well and good, and a very commendable position for a Government to take. However, the 2017 Budget doesn't go anywhere near enough in addressing the root causes of tax avoidance – the state of the tax code – focussing heavily instead on closing loopholes. Canada is not unique in this by any means. Almost from the day the first tax codes came into existence, governments and legislatures all over the world have used them to pick winners and curry favor with certain groups of taxpayers. They're then aghast that companies and individuals use the loopholes they created to avoid tax. And the standard response has been to create yet more tax legislation, which while closing one loophole may open one or more elsewhere in the system. Perhaps a policy of removal, rather than closure, might be a better way to tackle loopholes. Because at the moment it's like a giant game of legislative whack-a-mole. And generally, governments are totally useless at it. Another unintended consequence of a tax code riddled with loopholes is that not only does it provide taxpayers with opportunities to legally (for the most part) avoid tax, it also creates trapdoors for the unwary. This leads to higher levels of conflict between taxpayers and tax authorities than would be the case under a simpler regime.
    Source: http://www.tax-news.com/news/Canadian_Budget_Focuses_On_Tax_Fairness_____73790.html


  • Mar 08, 2017   Canada: spendy

    Not that developed economies have a better track record on tax complexity. They are just as guilty of undermining their tax bases with countless tax incentives, tax reliefs, and other narrowly targeted tax breaks and loopholes, which collectively tend to be known as tax expenditures. And, despite widespread realization that tax expenditures are starting to run out of control, there has been an almost complete failure to do anything about it. Canada, for example, has just released its annual tax expenditure report, which is supposed to keep track of such things. But I haven't seen much in the way of meaningful base-broadening measures in recent federal budgets. Indeed, they have all been peppered with new and expanded tax breaks of one form or another. The United States meanwhile "spends" around USD1 trillion a year on tax expenditures, despite numerous congressional reports and hearings on how this situation must be reversed. And even with the presence of the Office of Tax Simplification, tax reliefs in the United Kingdom have actually risen by 100 since the Government came into office less than two years ago to a mind-boggling 1,140. Now there's a misnomer if ever there was one! Perhaps the Office of Tax Complexity would have been a more appropriate name.
    Source: http://www.tax-news.com/news/Canada_Publishes_Tax_Expenditures_Report____73607.html


  • Feb 15, 2017   Canada: butter fingers

    To mislay one person's tax records would be careless, and very stressful for the taxpayer concerned. To let, say, 28,000 tax records slip through your butter fingers would be catastrophic. But surely it would be impossible in this age of secure data storage and communication, no? Well, actually, no! Between them, the Canada Revenue Agency and a courier company have managed to achieve just this feat. The trouble is, in the world of digital records this sort of thing can happen. Such cases may be isolated, but there's always the risk that bulk information may fall into the wrong hands en route from one place to another – electronically or otherwise. This incident should serve as (yet another) warning about tax data security as we enter an era of mass information exchange.
    Source: http://www.tax-news.com/news/Canada_Confirms_Loss_Of_Data_On_28000_Taxpayers____73401.html


  • Nov 16, 2016   Canada: smolders

    We have also seen recently a degree of hostility in the Canadian provinces to Prime Minister Justin Trudeau's proposal to put in place a national carbon tax. For instance, Saskatchewan Premier Brad Wall said last week that the province's economy would be "especially vulnerable" to carbon tax. The Canadian Taxpayers Federation said last month that the national carbon tax plan is little more than a revenue grab, and is likely to have "no substantive impact on global climate change." Even in the home of the Paris accord, the French Government has dropped plans for a carbon tax on energy derived from coal to prevent job losses. In Canada at least, opposition to the national carbon tax seems to be rooted in the proposal's bad design, rather than concept of carbon pricing per se. However, the theme that is emerging here is economic growth versus carbon reduction. And with many people all over the world feeling increasingly vulnerable economically, perhaps, for a while at least, expedience will trump idealism – no pun intended.
    Source: http://www.tax-news.com/news/Saskatchewan_Premier_Voices_Opposition_To_Federal_Carbon_Tax____72678.html


  • Oct 19, 2016   Canada: prudent

    Zooming back across the Atlantic, and after little more than a year in power, it's probably too early to judge Justin Trudeau and his Liberal Government's handling of the Canadian economy. But looking from afar, it seems to be a case of so far so good. The IMF at least seems impressed. Welcoming the new Government's pro-growth policies, it predicted in June this year that measures contained in the last Budget would boost GDP by 0.5 percent in each of the next two fiscal years. However, it is those "pro-growth policies" – essentially a euphemism for higher public spending – have seen Canada go from a budget surplus to a budget deficit either side of the last election. And worryingly, while spending has been rising, tax revenues have been fluctuating. This is despite the fact that, generally speaking, the new Government has been raising taxes – or at least not cutting them. For example, it has raised the top rate of income tax, cancelled a proposed cut in the small business corporate tax rate, and plugged loopholes left, right, and center. Still, Canada's current budgetary situation is far from disastrous. At CAD1bn, its deficit is a drop in the ocean. The federal deficit in the United States for example, while no longer the hotbed issue it used to be, was USD438bn in 2015, or 2.5 percent of GDP. Despite the Eurozone's ongoing struggles with sovereign debt, the United Kingdom continues to run one of the largest deficits in the EU, at GBP69bn (USD84bn) in 2015/16, or 4.4 percent of GDP. Even more encouragingly for Canada, its national debt remains at a relatively sane 26 percent of GDP. By comparison, the UK's public debt is over 80 percent, and the US's is in excess of 100 percent. While Canada's fiscal health owes much to the prudence of previous governments rather than the current one, it is still worthy of praise. History therefore will not judge Trudeau kindly if he undid much of this work.
    Source: http://www.tax-news.com/news/Canada_Reports_CAD1bn_Deficit_For_2015____72441.html


  • Jul 11, 2016   Canada: ambitious

    And now to the Brexit, or rather the lack of progress towards it. I can't think of a major economy in recent history that has experienced the sort of a power vacuum-inducing bout of political paralysis as is enveloping the UK right now. On the one hand, you've got a Government led by a Prime Minister who is probably chomping at the bit to claim his ministerial pension and take early retirement, and on the other a political opposition that is fragmented and appears to be falling apart. What's more, it's going to take up to two months for Conservative Party members to choose their next leader (and Prime Minister) from a field narrowed down to two candidates. Surely the process needs to be, and could be, done and dusted inside two days, given the exceptional circumstances at play. The words fiddling, Rome, and burning spring to mind. Nevertheless, having chastised the UK yet again for the chaos it is visiting on taxpayers and investors across the EU, there are signs that some sort of plan might just be about to break out. I refer to UK Business Secretary Savid Javid's visit to India, where he is putting feelers out regarding a potential bilateral trade deal. Indeed, by the end of this year, Javid's air miles account is going to look pretty impressive, as he prepares to test the trade waters in China, Japan, South Korea, and the United States. This is all well and good, and worthy of an encomium this week, if only for the reason that the UK is being seen to be doing something about its future. Still, the bleak truth is that, as the EU and Canada prepare to seal what is being described as a highly ambitious trade deal, the UK is going to miss out on these sort of opportunities until the all-important trade agreement is sorted out – the one with the EU. And it is hardly starting from a position of strength.
    Source: http://www.tax-news.com/news/EUCanada_FTA_Could_Be_Signed_In_October____71620.html


  • Jun 06, 2016   Canada: unedifying

    Many newly elected leaders are permitted a honeymoon period – that grace period following the election when they can seemingly do or say nothing wrong. Or, more accurately, the brief time that the public is more forgiving than it otherwise would be when feet get shoved in mouths. The honeymoon period tends to vary from country to country, depending on how gaffe-prone a particular politician is, and the general level of esteem (or cynicism) the people have towards their elected officials. Inevitably, however, honeymoons must come to an end, even for the hitherto untouchable Justin Trudeau, who has spent much of the time since he was elected as Canada's Prime Minister dazzling the world with his good looks and charm. In his case, the honeymoon period came to an abrupt hiatus when he showed us his ugly side, an incident involving fellow members of parliament and a pair of sharp elbows, used in a rush to commence a Commons vote. He has since apologized of course. Twice. But a rather unedifying episode for the young PM. Nevertheless, his problems may be compounding, because there are signs that his core fiscal policies – middle class tax cuts and "modest" deficit financed infrastructure expenditure – may be beginning to unravel before they've got off the ground, after the Finance Department revealed a slump in tax revenues and an ominous increase in the deficit. Trudeau sounds like a man in a hurry, and one who doesn't readily accept disappointment in his political endeavors. But as many an embattled premier might say, welcome to the harsh realities of government, Justin! Get ready to disappoint, and be disappointed…
    Source: http://www.tax-news.com/news/Poor_Income_Tax_Revenues_Hit_Canadian_Deficit_Figures____71357.html


  • Feb 15, 2016   Canada: cold

    As the famous expression, usually attributed to Benjamin Franklin, goes, "in this world nothing can be said to be certain, except death and taxes." But what about tax after death? It's probably safe to assume that in Franklin's world, death was a blessed relief from tax. However, as it turns out, sometimes the two are not mutually exclusive, at least in the eyes of some tax authorities. In Canada for example, death is no excuse for not filing your tax return, according to the Canada Revenue Agency. Not that you are expected to submit a return from beyond the grave. That would just be silly. No, under Canadian rules this unfortunate task falls to the legal representative of the deceased, as it no doubt does in most jurisdictions. I suppose by the strict letter of the law, if you shuffle off this mortal coil in the middle of a tax year, and there is income left to be taxed, then that income must be taxed. And since death and taxes don't discriminate (with regards to the latter, it's governments that discriminate rather than taxes themselves), it's a rule that applies to everyone, regardless of status. Nevertheless, I'm highlighting this story because it shows just how ubiquitous tax has become in the world we inhabit today. Dealing with the tax man is now accepted as one of mundane duties that a grieving family must do as they tie up the affairs of their loved ones. Yes, tax doesn't discriminate, and it doesn't show much compassion either. Franklin would probably be appalled at how things have turned out.
    Source: http://www.tax-news.com/news/CRA_Issues_Guidance_On_Managing_Tax_Returns_For_The_Deceased____70383.html


  • Jan 11, 2016   Canada: all ears

    I'm all for governments listening to their citizens. Of course I am. Which is why I'm going to give Canada an encomium for launching pre-budget consultations with taxpayers, a tradition that is now long established there. But do governments really listen in these situations, or do they just pretend to? Can such consultations ever be more than a PR stunt, a going-through-motions "yes, we really do have your best interest at hearts, promise" tick-the-box kind of exercise? Canada might just be the exception that does consider its taxpayers' opinions. If we look at the lead-up to last year's federal Canadian Budget, business associations were calling on the Government to reduce the small business corporate tax rate, which has fallen by only 1 percent since 2000, whereas the headline rate has been slashed by 13 percent over the same period. Lo and behold, one of the flagship measures announced by the late Finance Minister Joe Oliver in the Budget itself last April was a 2 percent cut in the small business rate. Certainly, there were probably plenty of budget requests that were ignored by the Government – calls to streamline the individual tax code seem to have been disregarded for a number of years – and likewise, there must have been measures in the Budget that some taxpayers didn't want. But it's something, I suppose, that taxpayers' wishes weren't completely ignored, especially by a Prime Minister who had been in power for a decade. By this time political leaders tend to have succumbed to a form of selective deafness, which helps to shield them from the awkward demands of citizens. However, Canada has a different Prime Minister now, so it will be interesting to see if the new Government is as inclusive with its decisions as it claims to be.
    Source: http://www.tax-news.com/news/New_Canadian_Govt_Launches_PreBudget_Consultations____70120.html


  • Dec 14, 2015   Canada: populist

    From a wise old head now to a young and handsome one. Sorry Vladimir, it's not you, despite your repeated attempts to convince us otherwise by posing bare-chested on a horse in Siberia, or flooring some unfortunate child in an exhibition of your prowess in judo. No, in political circles, it can only be Justin Trudeau, who has been bedazzling world leaders recently with his good looks and youthful bonhomie. But will the Liberals work similar magic on the Canadian economy with their fiscal plans? I fear not. To its credit, the new Government is delivering on its central tax pledge, to cut income tax for those in the middle and hike tax for those at the top. But one recent study suggests that far from raising extra revenue – money intended to subsidize the middle class tax cut – the plan to shift the tax burden to top earners could actually cost federal and provincial governments. The C D Howe Institute's Alexandre Laurin, the author of the report, said: "The Liberal election platform said that these changes would be more or less revenue neutral, however we estimate the federal tax changes could result in national tax receipts falling short of commitments for both federal and provincial levels of government by more than CAD4bn (about USD3bn), meaning higher taxes elsewhere, unplanned spending cuts, or larger increases in government debt." C D Howe might be proved wrong of course. But hiking top rates of individual income tax, popular though such measures are with the public, doesn't necessarily lead to higher revenues, as has been shown in other countries. Indeed, in the UK it is widely accepted that the much-maligned former 50 percent tax may have led to lower tax receipts because the rich merely shifted their income into more tax-efficient vehicles, or simply worked less. Justin Trudeau may look young enough to be my son, but he'll have to learn pretty fast that populist policies aren't necessarily the best policies.
    Source: http://www.tax-news.com/news/Canada_Legislates_For_Middle_Income_Tax_Cuts____69889.html


  • Nov 09, 2015   Canada: Trudeaumania

    Bill Clinton's famous 1992 election campaign catchphrase went: "It's the economy, stupid." He meant that any leader or aspiring leader who neglects key economic issues is likely to be given a bit of a kicking by voters. And with Canada's economy grinding to a halt, outgoing prime minister Stephen Harper and his Conservative administration sure know what it feels like to get a good electoral kicking. And this is despite the fact that, until recently, the previous Government's track record on the economy was actually pretty good, in so far as it avoided the worst of the financial crisis, delivered a budget surplus, and maintained public debt at low levels in comparison to other G8 countries. The corporate tax rate was also slashed to 15 percent, putting Canada among the Hong Kongs and Singapores of this world in corporate tax terms. But these things don't really excite voters that much, even though most people would probably agree, given what's happening in the euro zone, that balanced budgets and general all-round fiscal prudence are desirable things. But fiscal prudence is boring. As a political platform it lacks personality and pizazz, and sounds rather staid and technocratish. Enter Justin Trudeau, the 42-year-old Liberal Party leader, sworn in as Canada's second-youngest Prime Minister ever last week, who has promised to inject some youthful vigor into proceedings. He started as he meant to go on by appointing a relatively youthful cabinet with no member over the age of 50. Then, the PM-elect, his wife, and the cabinet all trooped off to the swearing-in ceremony in a bus – presumably, his point being that this is a form of transport that the last Conservative cabinet wouldn't have been seen dead in, perhaps preferring instead the privilege and isolation of the ministerial limousine. Indeed, Trudeau is promising a more open, informal kind of government all-round. But what's he got to offer on the economy? Well, he wants to invest in infrastructure, and that will mean running a deficit for three years. He also wants to reduce income inequality. But all he's offering on that front is a modest tax cut for middle-income earners. I'm afraid it all sounds a bit gimmicky to me – a bit style-over-substance. The cynic in me wonders how long it will be before the limousines emerge from their garages, or before taxes begin to rise. It all comes across a bit Tony Blair circa 1997, a bit "Cool Britannia." Trudeau will be hoping he doesn't suffer the same "hero to zero" decline in popularity Blair did.
    Source: http://www.tax-news.com/news/Majority_Of_Canadians_Back_Trudeaus_Income_Tax_Plans____69594.html


  • Sep 15, 2015   Canada: election fever

    Another day, another tax cut pledge from one of Canada's major political parties. There must be a general election round the corner! And indeed there is, on October 19, when voters go to the polls to elect members to the House of Commons. This time it was Prime Minister Stephen Harper's turn, with the Conservative Government promising a substantial cut in Canada's payroll tax if re-elected. This followed hot on the heels of Harper's proposal to extend and expand the Mineral Exploration Tax Credit which is designed to encourage investment in Canada's vital natural resources industry. In fact, the Prime Minister has been quite busy thinking up ways to tempt the electorate to voting for him again. In past month or so, he has promised to: increase the scope of a tax break helping first-time buyers onto the property ladder; introduce a new home renovation tax credit; increase the value of the tax credit designed to reduce the costs associated with the child adoption process; reward givers to charity under the charitable donations tax credit; and not tax subscriptions to Netflix and similar digital download services. Meanwhile, the opposition Liberal Party has been more direct, pledging to cut income tax for middle-income earners (that strata of voters who so often decide elections) and create a new child benefit scheme. The New Democratic Party's latest proposal, to introduce an innovation tax credit to support cutting-edge private sector research perhaps makes more economic sense, if not electoral sense. Yet, ironically, if they maintain their slender lead in the polls until election day, the NDP could be voted into government for the first time in the party's history. Perhaps the message here is that us voters can sometimes see the bigger picture, and don't always feel the need to be bribed by power-hungry politicians!
    Source: www.tax-news.com/news/Canadian_Conservatives_Pledge_Payroll_Tax_Cut____69127.html


  • Apr 27, 2015   Canada: prudent

    Canada has been praised a few times recently in this column for its prudent fiscal and economic management. Unlike the rest of its peer countries in the rich nation club, it didn't have to bail out its banks, and the stultifying hand of austerity barely touched North America's largest country. So impressed was the British Government with Canada's economic track record that they head-hunted Mark Carney to govern the Bank of England. Although, the "macro manure" piling up under the British economy, mentioned here last week, may be beyond even Carney's powers to rectify; he's a competent central banker, not an economic miracle worker. Anyway, back on topic. Canada's latest encomium comes as a result of the announcement in the 2015 Economic Action Plan that the budget has been balanced, and that the Government intends to run a surplus from now on. The budget will be underpinned by a new fiscal law that allows an "acceptable" deficit only in times of war, or natural disaster, or some other exceptional circumstance. The Government is also cutting the small business corporate tax to below 10 percent, a move generally praised by investors. However, I do find myself agreeing with CPA Canada, which stopped short of awarding Finance Minister Joe Oliver an "A grade" because the Budget was rather safe. Perhaps Canada can afford to be a bit bolder, addressing underlying complexity in its tax system, and high individual taxes, which perhaps undermine the policy of low corporate tax rates. But then the Government is unlikely to want to roll up its sleeves and tackle comprehensive tax reform with a general election six months down the track. Still, given that this will be the last Budget before the election, the Conservatives have been quite conservative. You'd think that with votes up for grabs, they'd be tossing tax cuts at various target groups like confetti. Certainly many governments would be, most without really considering the fiscal consequences of their actions. That the Harper administration hasn't done this could actually be construed as another feather in its cap.
    Source: www.tax-news.com/news/Canada_Balances_Budget_Cuts_SME_Taxes____67880.html


  • Feb 12, 2015   Canada: prudent

    Perhaps Abbott should have been born Canadian, for they seem to have all the answers. It has been well documented how Canada was the only one of the major industrialized countries which didn't suffer a banking crisis. In fact, the British were so impressed at the way things were run there that they head-hunted Canada's top central banker, Mark Carney, and put him in charge of the Bank of England. While the recession which followed the financial crisis didn't leave Canada unblemished, and much was spent in stimulating the economy, requiring the federal Government to run a deficit, Canada still managed to cut its corporate tax to the lowest level in the G8. Now it expects to achieve a balanced budget in 2015/16, having recorded a budget surplus in November 2014. There is one worry for the Government though: oil. Canada is a major producer of oil and natural gas, and like any other nation, it likes to takes its cut from the companies that extract it from Canadian soil, as do the provincial Governments. Senior figures in the federal Government, including Prime Minister Stephen Harper, have repeatedly taken to the airwaves recently to confirm that the budget will still balance on time despite falling revenues linked to the cheaper price of oil on global markets. But it's not just the federal Government this affects. At least two provincial Governments have been weighing up new tax increases to offset dwindling oil revenues, the latest being Alberta, which has however said it won't go ahead with a proposal to increase the provincial corporate tax. For now at least. These are developments worth watching though, and one does fear that the federal Government doth protest too much. With a general election scheduled for October appearing on the horizon, let's hope it's not hiding any nasty secrets from its citizens.
    Source: www.tax-news.com/news/Canada_Records_Budget_Surplus_In_November____67167.html


  • Aug 21, 2014   Canada: cutting taxes

    Compare and contrast with America's northern neighbor. No country, government or parliamentary system is perfect, and this also applies to Canada. But Canada seems to have done a lot of things right, or at least the fewest things wrong, compared with many of the countries in its developed country peer group. Although it wasn't immune from the economic shockwaves that reverberated globally when the financial crisis broke, Canada was the only member of the G7 not to suffer a domestic banking crisis. Indeed, so impressed with Canada's monetary stability was the United Kingdom that it poached the country's senior central banker to head the Bank of England, although this might turn out to be something of a poisoned chalice for Mark Carney as the British economy approaches a crucial juncture; the housing market is racing ahead, and it may be about time to switch off the life support provided by record-low interest rates. Anyway, I digress. The fact is that as a result of prudent economic management the Canadian federal Government will be back in surplus next year – a scenario that most of its G7 counterparts, with the exception of Germany, can only dream about. And over the course of the last decade it has cut corporate tax from one of the highest among the richest countries to one of the lowest, with a headline rate of 15 percent. So while President Obama says that tax reform is as much about raising revenue to reduce the US federal deficit than it is about giving the economy a boost, Canada has the luxury of thinking about tax cuts without having to worry so much about the revenue consequences.
    Source: www.tax-news.com/news/Canadian_Budget_To_Feature_Income_Tax_Cut____65544.html


  • Aug 14, 2014   Canada: trading freely

    With the deadline to implement the World Trade Organization's Trade Facilitation Agreement having been missed, the Trans-Pacific Partnership negotiations held up by Japanese intransigence, protectionist policies in some emerging economies and ongoing trade spats between the EU, the US and China, it has been a bit of a bleak period for believers in free trade. But at least there is Canada. It has taken a number of years for the free trade-skeptic President Obama to soften his protectionist views and embrace the TPP among other multilateral trade agreements. But Canada under the Government of Prime Minister Stephen Harper has been flying the free trade flag proudly and has just tied up its most ambitious free trade deal yet, with the European Union. Canada has FTAs in force with just 12 countries at present, most of which were agreed under the current Government, to the US's 20. But Ottawa probably the most ambitious trade program of any country in place. Negotiations with 60 nations are underway, including as part of the TPP, and a global trade action plan targets key emerging markets like India and aims to get SMEs involved in foreign markets. South of the border, a more cautious President Obama continues to insist that trade agreements should be "fair" as well as "free." There are few indications that the Canadian economy is suffering as the Government continues to open it up. Trade Minister Ed Fast claimed that 2013 was Canada's most successful in terms of international trade, and Canada moved up from 13th to 12th in the WTO rankings of the world's leading merchandise exporters. So you could say that what's good for the goose is good for the gander!
    Source: www.tax-news.com/news/Canada_EU_Complete_Free_Trade_Agreement_Text____65474.html


  • Jan 23, 2014   Canada: out of order

    There is much to admire in Canada's economic management in recent years: taxes have fallen, the country's finances are on a sound footing, and Trade Minister Ed Fast has made himself a beacon of free trade to the whole world. But I cannot support the Government in its Cromwellian efforts to bump up tax collection by paying sneaks to inform on their fellow citizens. It goes on all the time, I suppose, without any encouragement from the authorities, fuelled by jealousy on the part of the informants. To add cupidity to that jealousy is to pander to two of the nastiest aspects of human nature. At the minimum, the Government should publish the names of the informants and details of how much they are paid. That way, right-thinking people can ostracize the bounders! But it won't; and you can be sure that no amount of enquiry under Freedom of Information legislation will extract the data. Very distasteful.
    Source: www.tax-news.com/news/Canada_Launches_New_AntiAvoidance_Program____63371.html


  • Dec 12, 2013   Canada: sticks to its Fast

    Talking of tightropes, David Cameron was on a trade high-wire last week, trying to encourage the Chinese to forward their putative trade deal with the European Union while hoping that his euro-sceptic right wing wouldn't notice. If he really wanted to leave the EU, he'd want a separate UK/China deal, presumably. Well, I wasn't at the table in Beijing, so for all I know, that's exactly what they talked about. The Chinese are very pragmatic, and they must wonder if the French will ever allow a Mandarin wave to flood their precious culture paddies. Still, it's true that Paris is full of Vietnamese restaurants. Very perplexing, the French. Anyway, back to the Chief Toff, who is clearly on the same trade wavelength as Steadfast: Trade Minister Ed Fast indeed earns Canada a bouquet this week for its and his enduring attachment to free trade. It has been a good week for free trade, generally, with the WTO surviving its latest brush with disaster by the skin of its teeth. In fact, we need to compliment India for helping to bring in at least a partial Doha harvest, after having been cast as the anti-Doha villain over the last few weeks. Of course all players had to kick the ball, and the fact that in the end they did so was a welcome but entirely serendipitous tribute to Mandiba's dicta of cooperation and compromise, in the week that he died.
    Source: www.tax-news.com/news/Canada_Unveils_International_Trade_Blueprint____62916.html


  • Oct 31, 2013   Canada: loves the EU

    Omigod, hasn't even one tiny little country done something good this week? Apparently not. What am I going to write about, then? Unlike the UK's BBC, the mighty organization I work for doesn't sack people for reporting good news, but they might indeed sack me if I don't report any news at all. Luckily there are plenty of horrible national crimes committed against taxpayers and citizens this week, but we'll get to those later. Right down at the bottom of this week's news (that is, it just scrapes into the designated time period) is a report on Canada's trade deal with the European Union. Now of course we are in favor of trade deals, so much so that we will ignore the awful crimes committed against Canadian taxpayers by the country's tax department, the CRA, reported in this week's Global Tax Weekly (the CRA seems to have wilfully persecuted taxpayers behind a cover of some sort of spurious sovereign immunity, which the courts are now dismantling, and not before time). Actually, Global Tax Weekly eulogizes Canada this week, for all the things it has done right over the last few years, and trade deals are not the least of them.
    Source: www.lowtax.net/asp/story/front/Canada_EU_Finally_Ink_Trade_Deal____62418.html


  • Jul 04, 2013   Canada: on the side of the taxpayer

    "Nonsense on stilts" was what Jeremy Bentham called human rights, which is nowadays presumably a deeply unfashionable position to defend; but all he meant was that human rights are not some sort of inbuilt principle of nature – he was strongly in favor of individual legal rights (animal rights as well, amazingly, for his time) which have to be fought for, over and over again. So he would probably have been supportive of the Canadian Government's intent to strengthen the country's Taxpayer Bill of Rights. Or would he? This is appears to be a non-statutory initiative of the Canada Revenue Agency, flanked by an Ombudsman structure. Bentham probably wouldn't have been in favor of such a contraption, as being an administrative invention, rather than a defensible common-law right established and burnished by precedent. Any administrative machine has as its first goal the retention and expansion of its own powers and privileges, and to suppose that it can be reined in by a set of fine words is delusional. When those words are strengthened, all that happens is that the machine develops a thicker and more cunning carapace: you'll never be able to see inside and no Ombudsman will ever be able to help you except in the case of a gross abuse of process. So this is just smoke and mirrors. Don't be fooled! At least it's white smoke.
    Source: http://www.lowtax.net/asp/story/front/Canada_Amends_Taxpayer_Bill_Of_Rights____61240.html


  • May 02, 2013   Canada: trading with Japan

    It seems as if the Canada/Japan Economic Partnership Agreement is being Fast-tracked (must be the weather for puns), and it's probably easier for Canada to do a deal with Japan than it would be for other countries to the south - too cold to grow rice, and the automotive industry consists mostly of assembly plants and component manufacturing, with the Japanese already well entrenched. For all the complaints that regional or bilateral trade deals have the effect of weakening Doha, I am not sure that's true. Every deal that's done is another piece of Doha that doesn't need to be fought over; and it's interesting that Canada and Japan are both negotiating members of the TPP (Trade Partnership of the Pacific), so that the same understandings, deals and compromises can presumably be carried over from the one to the other; it will be the same people each time, and they can scarcely pretend never to have met before. Wouldn't you imagine, in reality, that the various putative treaties merge seamlessly into one another? Nobody actually sits down to write these 1,000-page documents. "OK, Ed," says Jun Yokota (Japanese chief negotiator), "We did all this last week in Alm-Aty, didn't we? Shall we get in a round of golf before lunch? The boys and girls can pull something together for us to look at later on." Actually there is far more recycling of texts in international diplomacy than you might imagine: I've never sat at an international trade negotiation, but I was in at the birth of the Cook Islands constitution - a girl-friend of mine knew a New Zealand lawyer who had been sent to London to write it. We'll call him John -he's quite senior now - and we had lunch together. John was laughing: "I went to the Colonial Office for help," he said, "and this old geezer in pinstripe trousers said he'd have a look. So he riffled through a filing cabinet. 'Aha,' he said, 'Just the thing, it's the XYZ islands. I'll have the names changed, get it re-printed, and send a copy round to your hotel in the morning.' Here it is," said John, having another gulp of champagne and plonking the document on the table. "Job done! and it was supposed to take me two weeks."
    Source: www.lowtax.net/asp/story/front/Canada_Promotes_Japanese_Trade_Talks____60568.html


  • Mar 28, 2013   Canada: to be in surplus

    Curate's egg applies also to the other main budget this week, the one in Canada. Business welcomed it, as did most individual taxpayers; and the economic good sense of this government will deliver a budget surplus within two years. But I don't like all this harping on about "fairness", and the constant tightening of the screw in terms of tax evasion. Are people more evasive or businesses more manipulative than they were yesterday? The answer coming from the tax authority will be "Yes!" but that's not what's going on – it's that every revenue agency always wants more, and perceives new loopholes to close all the time. They were there before, but unnoticed. The consequence is a creeping criminalization of the populace and growing complexity of the tax code. Everyone remarks about this in the USA, but it's true of all the main advanced economies. "Major new powers of oversight and information collection," harrumphs the Finance Minister. Major new chapters of dense verbiage I think to myself. And major lip-smacking on the part of tax advisers. And publishers. Think I'll ask for a rise!
    Source: www.lowtax.net/asp/story/front/Flaherty_Cracks_Down_On_Tax_Evasion_In_New_Budget____60210.html


  • Feb 21, 2013   Canada: reaches westwards

    Staying with trade, there is yet another bouquet for Canada to add to its existing florist's shop of them, as it throws in its lot with the Pacific Alliance. Yes, Canada, like the USA, faces West as well as East. It's no coincidence that the IMF is complimenting Canada on its economic policies this week. We can fairly attribute Canada's recent successes to a longish period of consistent business- and trade-friendly governance, and at least in this respect we may reflect that a parliamentary democracy like Canada may have a better constitutional model than its southern neighbour, in the grip of legislative paralysis because of its presidential model. But that is too glib: France has a presidential model, and it currently doesn't suffer from legislative gridlock. Many French people probably wish it did.
    Source: http://www.lowtax.net/asp/story/front/Canada_Promoting_Latin_American_Trade_Links____59785.html


  • Oct 18, 2012   Canada: Canada walks the walk

    Canada's fiscal results pay testament to a consistent and successful attempt to reduce both taxes and spending, something that governments often claim they are doing, but seldom achieve in practice. Canada must be one of the very few countries where government spending actually fell last year as a proportion of GDP. And its debt is a miserly 33%. This makes it a good place to do business, so it gets a gong.
    Source: http://www.lowtax.net/asp/story/front/Canadas_Deficit_On_Downward_Track____57749.html


  • Sep 13, 2012   Canada: fast forwarding to a tariff-free world

    Perhaps free trade is catching after all: yet another Canadian minister is globe-trotting on a quest for improved trade relations. I have a vision of the Canadian cabinet table: instead of bottled water they have fizzy free trade elixir, sponsored by Pascal Lamy, I hope. John Baird (Foreign Affiars Minister) will have a tough time keeping up with Ed Fast, who must be rivalling Hilary Clinton in the government air miles stakes this year. That causes me to wonder what happens to ministerial air miles: when I was, briefly, a public servant, I bought my own tickets, claimed the money back and kept the air miles, which meant that every third flight was up front (those were the days). Paul Volcker, all six foot six of him, used to cram himself into an economy seat on principle; did he get air miles to use for his family holidays in the Caribbean?
    Source: http://www.lowtax.net/asp/story/front/Canadian_Minister_On_Trade_Mission_To_Russia_India____57205.html


  • Aug 23, 2012   Canada: waving flags for trade

    Canada rounded off a week of pro-trade activity by announcing a mission to the Dominican Republic and Haiti. Presumably the trip forms part of the grandly-titled Global Commerce Strategy, which will see Trade Minister Ed Fast carrying out country-wide consultation on setting targets for the next batch of international trade deals. Also this week Angela Merkel and Stephen Harper pushed towards the goal of an expanded EU/Canada trade deal. If only people like Francois Hollande and Vladimir Putin set as much store by trade. 'Trade follows the flag' goes the mistaken saying; it's the other way around.
    Source: http://www.lowtax.net/asp/story/front/Canada_Announces_Trade_Mission_To_Dominican_Republic_Haiti____56856.html


  • Jul 26, 2012   Canada: agreeing to disagree

    The USA and Canada don't do a lot of furiously raging together; their spats are usually conducted in very polite terms, as witness the dispute over Canada's timber exports to the US, which have lumbered ponderously along for at least five years, and may, just may, have reached a conclusion which both sides accept, even if with some reluctance on the part of the US. The important point is that the parties accept the rule of law, and have fairly punctiliously stuck to the required procedures during the various stages of the long-drawn-out game. That is not always the case with international trade-squabbling: all too often the participants game the system mercilessly on the principle that, the more you ask for the more you get. But that is not a good idea in principled negotiation. Although countries are not people, their negotiators are, so that concepts of fairness and the tendency towards altruism can operate even at national level. 'Beggar-my-neighbour' is not a successful strategy in international affairs. More likely you will beggar yourself.
    Source: http://www.lowtax.net/asp/story/front/US_Canada_Agree_To_Disagree_Over_Lumber_Ruling____56446.html


  • Jun 07, 2012   Canada: trading in Kazan

    Ed Fast for the WTO! This is not to do down Pascal Lamy, who soldiers on gamely with the Doha Round, but even this determined marathon runner has to get tired sometime, and when he does, Ed would be a good replacement. He has bone-dry free trading credentials, on display once again this week as he took a 30-strong delegation of Canadian business-people to Russia. You do have to wonder slightly what they are going to sell each other: hockey players? snow-ploughs? But that's the wonder of free trade: once the barriers are down, all kinds of amazing things happen. In BT 50 (an alternative calendar, BT for before taxes, round about 1900, and AT for after taxes) my great-great grandfather made money buying eggs in Kazan (that's where Ed was this week) and selling them in Rochdale. Who could have guessed it?
    Source: http://www.lowtax.net/asp/story/front/Canadian_Government_Launches_Russian_Trade_Mission____55755.html


  • May 10, 2012   Canada: busy as usual supporting trade and industry


    Source: http://www.lowtax.net/asp/story/front/Canada_Highlights_Trade_Support_For_Manufacturing____55255.html



 

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