Article content continued

So the New Democrats’ plan to raise Canada’s corporate tax rate from 15 to 17 per cent, advertised as making large companies pay their “fair share,” is a sham from the start, quite apart from whether it will raise the revenues claimed. But then, by the time the rude fiscal awakening arrives, the party hopes already to be elected.

Mind you, the Conservatives have their own record to answer for. While the party has, to its credit, brought corporate tax rates sharply down — even as corporate tax revenues have shot up — it has cluttered the tax system with far too many “targeted” credits, deductions and exemptions: subsidies by another name.

All taxes are paid by human beings

A new report from the Canadian Council of Chief Executives argues for a different approach — from either party. Authored by economist and tax expert Jack Mintz, the report (An Agenda for Corporate Tax Reform in Canada) suggests further lowering the corporate tax rate from 15 to 13 per cent, in concert with reforms that would substantially broaden the tax base. Combined, he calculates the revenue take should be about the same.

A meta-analysis of three Canadian studies in the report shows that lowering of the corporate tax rate has induced multinational companies to report more of their profits in Canada. More controversially, the report also takes aim at the special lower rate for small businesses, the darlings of every political party. This year’s budget proposed lowering this rate from 11 to nine per cent over the next five years. Instead, Mintz proposes raising the rate to 13 per cent, the same as the new general corporate rate.