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What is the most profound public policy change that could boost Canadian living standards? A tax on carbon? Higher deficits? Raising taxes on higher earners?

No. Those are being tried right now by the Liberals in Ottawa and they are unlikely to do anything but reduce economic growth and job creation. The best answer to moving Canada’s economy forward is the least talked-about policy: eliminating corporate income tax (CIT).

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Right now, the CIT is a $40-billion annual burden on creating wealth and jobs and higher wages for Canadians. The tax reduces investment and savings and it artificially boosts consumption, using resources today instead of putting them to work for even bigger gains in the future.

It lowers workers’ take-home pay because most of the cost of corporate taxation is passed into their wages. It reduces investment and job opportunities by raising the cost of capital and reducing productivity. Lower investment and less foreign capital also mean fewer companies and new products and well-paying jobs.