OTTAWA — Corporate Canada is bracing for the latest economic challenge out of Washington: a tax-cutting plan for U.S. businesses that many fear would pose a considerable threat to Canadian competitiveness as well as Ottawa's bottom line. The White House announced a tax-reform package Wednesday that included a proposal to significantly slash the top U.S. corporate rate from 35 per cent to 15 per cent. But concerns the plan would inflate U.S. federal shortfalls mean it could face a difficult road to implementation.

U.S. President Donald Trump's proposed tax plan would harm Canadian competitiveness, experts are warning. (Photo: Kiichiro Sato/AP via The Canadian Press) Still, if it were to come into force, tax such a "dramatic'' reduction would push the U.S. effective corporate rate about seven percentage points below Canada's effective rate, said tax expert Jack Mintz. Mintz said the change would erase Canada's current tax advantage over the U.S. of about four percentage points, once multiple factors — including federal and provincial rates — are factored in. That difference, Mintz warned, would entice businesses to move their investments and profits south of the border, starving public treasuries in Canada of up to $6 billion per year in revenues. "People are going to take money out of Canada and put it into the U.S.,'' said the University of Calgary professor, who has closely studied the issue. "And it's not just the American companies. There will also be Canadian companies with operations in the United States.... So, this is a real negative for Canada, no question.'' The U.S. tax-cut proposal is just the latest element of an economic agenda from the Trump administration that could end up sideswiping their northern neighbour. Earlier this week, President Donald Trump slapped a duty on softwood lumber that will affect imports from Canada. And on Wednesday, White House sources were telling U.S. media outlets that they are contemplating a plan to pull out of NAFTA.