Statscan on Corporate Tax Cuts
Statscan economist Philip Cross weighs in on how trivial is the impact of cuts in the overall scheme of things, as reported in a fine story by Heather Scoffield of CP.
IÂ agree, but fear his career will be in serious jeopardy.Â Or perhaps he is on the eve of joining Munir in retirement. Minister Clement will not like this one bit.
Here is what he had to say:
“A couple of billion dollars (of savings from tax cuts) is a drop in the bucket of corporate income here,” Cross said in an interview. “It’s trivial.”
Canada’s natural resources, the price of oil, currency fluctuations and the state of the country’s financial markets have been far more influential on corporate investment decisions than recent tax cuts, he says.
“These huge forces were going on â€” globalization of supply chains, commodity price booms and so on. And somewhere in there you’re going to be able to separate out the impact of small changes in the tax rate? You’re kidding,” Cross said.
Generally, the impact of more tax cuts “is going to be relatively small, given the huge flow of money driven by other forces.”
The caution cited by the federal agency comes as Conservative ministers claim that cancelling corporate tax cuts would be “dangerous” for the economy â€” and warn an election could be the result of a standoff with the opposition on the issue.”