Flaherty Says No to Chrysler & Hargrove

[August1991]

Hargrove, who represents the unionized workers at Chrysler Canada and the Canadian subsidiaries of General Motors and Ford, is calling for the federal government to a deal with the rising dollar and to strengthen trade regulations.

"If they don't do that, we're going to continue to see the downsizing and layoffs in our industry," he said in an interview.

"It's pretty clear to me it's going to get worse over the next few months. There are going to be other announcements."

The federal government must give Japan and Korea an ultimatum to open their markets to vehicles made in Canada or have their imports cut drastically, Hargrove said.

Toronto Star

So Hargrove wants to hurt Canadian consumers and Korean and Japanese workers just so he can help out a few highly paid workers in Ontario. If anyone is deserving of support in Canada, it is not auto workers in Ontario. I'd rather see my money go to people earning less than $30,000.

[The CAW may want to get a more credible spokesman. When Hargrave urged Quebecers to vote for the BQ in the last election to stop a Tory government, or when he criticized Harper's government for its policy in Lebanon, he did no good service for his fellow union members.]

Asserting that manufacturing companies in Canada are still enjoying "vibrant" growth overall, Finance Minister Jim Flaherty says there's little Ottawa can do to prevent job losses at Chrysler or other Big Three auto makers.

"There is market weakness in the auto sector and government can't correct that," he told the media after a speech in Toronto yesterday.

He spoke amid mounting demands that the federal Conservatives take action in the face of the skyrocketing loonie and the announcement of 1,100 layoffs at Chrysler, a development that many see as a precursor to a wave of additional employment losses.

...

Asked repeatedly what he could do to ease the crunch on Chrysler and other car manufacturers, Flaherty offered nothing new.

"We're always concerned about job losses," he said. But, rather than financial support for car companies, Ottawa is offering tax breaks for business, he said. "What the government can do is, in tax policy, we can provide stimulus."

Toronto Star

Flaherty has this right. Cut corporate taxes for all firms. He should not fall into the game of offering special deals and trying to pick winners or pacify cry babies.

----

If government is going to help people, it should help people who need it. Cut taxes for people at low incomes. Giving subsidies to Chrysler would not do that. I hope Flaherty and Prentice hold to their position.

If McGuinty wants to waste Ontario taxpayer's money, then let him do it.

Edited November 4, 2007 by August1991

[maldon_road]

Buzz has already done his thing for the working man. He made a deal with Magna where they lose the right to strike.

[Topaz]

The main reasons that the auto is here in Canada is the healthcare system and the LOW dollar. Now it seems to me, that if its going to cost me more to do business in Canada, I go elsewhere. The high dollar isn't good for business and if the auto sector goes down, so will thousands of jobs one after another that is connected to the manufacturing business. You'll have thousands of people in unemployment, there goes some of the surplus for Harper and not everyone can move to the west and the west couldn't handle another 200,000 people! Harper is the PM and he's there for every Canadian and for every province and if he can't, then he needs to go!!!

[maldon_road]

The main reasons that the auto is here in Canada is the healthcare system and the LOW dollar. Now it seems to me, that if its going to cost me more to do business in Canada, I go elsewhere. The high dollar isn't good for business and if the auto sector goes down, so will thousands of jobs one after another that is connected to the manufacturing business. You'll have thousands of people in unemployment, there goes some of the surplus for Harper and not everyone can move to the west and the west couldn't handle another 200,000 people! Harper is the PM and he's there for every Canadian and for every province and if he can't, then he needs to go!!!

In the US the UAW has made concessions to the auto companies to cut costs - eg, two-tier wages.

Buzz has said he won't along. Uh-huh?

[Canuck E Stan]

Toronto Star

[The CAW may want to get a more credible spokesman. When Hargrave urged Quebecers to vote for the BQ in the last election to stop a Tory government, or when he criticized Harper's government for its policy in Lebanon, he did no good service for his fellow union members.]

Toronto Star

Flaherty has this right. Cut corporate taxes for all firms. He should not fall into the game of offering special deals and trying to pick winners or pacify cry babies.

Giving subsidies to Chrysler would not do that. I hope Flaherty and Prentice hold to their position.

If McGuinty wants to waste Ontario taxpayer's money, then let him do it.

Hargrove, who represents the unionized workers at Chrysler Canada and the Canadian subsidiaries of General Motors and Ford, is calling for the federal government to a deal with the rising dollar and to strengthen trade regulations.

"If they don't do that, we're going to continue to see the downsizing and layoffs in our industry," he said in an interview.

"It's pretty clear to me it's going to get worse over the next few months. There are going to be other announcements."

It will only get worse for the CAW.

What Buzz doesn't say is that those announcements may be quite positive and from Toyota, and it's expansion plans.

Toyota pays it's workers more money than Buzz's CAW bunch receives from the big three.

I would suggest that Buzz tell GM,Ford, and Chrysler to get back to the drawing board and design and build cars like the ones that Toyota builds.The cars they can't build fast enough for the consumer who are want them.

Edited November 4, 2007 by Canuck E Stan

[Michael Bluth]

So Hargrove wants to hurt Canadian consumers and Korean and Japanese workers just so he can help out a few highly paid workers in Ontario. If anyone is deserving of support in Canada, it is not auto workers in Ontario. I'd rather see my money go to people earning less than $30,000.

Do the North American vehicle manufacturers sell up to their quota as it is in Japan and Korea?

I remember when Saturn tried to enter the Japanese market they failed miserably.

"A polite kind of car company, a polite kind of car." Had to be the stupidest marketing slogan in history.

Why would a Japanese or Korean consumer want anything but a luxury North American vehicle. Economy vehicles from the North American companies are bigger and less fuel efficient than their Japanese or Korean counterparts. Difficult to get serviced. Those vehicles would still have to sell at a premium as opposed to the domestic competitioin.

That is the reason why we import more vehicles from Japan or Korea than we sell there. Nothing about government regulations.

[jdobbin]

Flaherty has this right. Cut corporate taxes for all firms. He should not fall into the game of offering special deals and trying to pick winners or pacify cry babies.

Flaherty should have cut corporate taxes 50% instead of dropping the GST. He could have also dropped income taxes by a large margin and still had a surplus left over.

Even in the U.S. many states are looking at increasing their sales taxes rather than their tax income taxes.

http://www.usatoday.com/news/nation/2007-1...Sales-tax_N.htm

A growing number of state and local governments are considering big sales tax increases to pump up sluggish revenue, cut property taxes or pay for new programs.

The sales tax increases would be large — generally 1 cent per dollar or more — and produce billions of dollars in new tax revenue.

No money should go to Chrysler directly just to keep the jobs.

[Michael Bluth]

Flaherty should have cut corporate taxes 50% instead of dropping the GST. He could have also dropped income taxes by a large margin and still had a surplus left ove.

How would cutting income taxes over GST cuts help save Chrysler?

Wrong thread, wrong tune. Ahhh, gotta love the Liberals.

[August1991]

The main reasons that the auto is here in Canada is the healthcare system and the LOW dollar. Now it seems to me, that if its going to cost me more to do business in Canada, I go elsewhere. The high dollar isn't good for business and if the auto sector goes down, so will thousands of jobs one after another that is connected to the manufacturing business. You'll have thousands of people in unemployment, there goes some of the surplus for Harper and not everyone can move to the west and the west couldn't handle another 200,000 people! Harper is the PM and he's there for every Canadian and for every province and if he can't, then he needs to go!!!

This is economic nonsense. Jobs come and go and most of all change because of new technology and new trade opportunities. Just think of how many jobs have changed or simply been eliminated in, for example, banking because of computers.

Imagine if someone in 1980 had tried to protect all the banking jobs by trying to stop the use of computers. Would this have been good for Canada in the long run?

Harper, Flaherty and Prentice must have the political fortitude to ignore Hargrove's call to protect his union jobs.

Thankfully, the data is on the government's side and contradicts what you claim:

Canada's jobless rate fell to a 33-year-low of 5.8 per cent in October, down from 5.9 per cent in the previous month, as 63,000 jobs -- mostly in the public sector -- were added to the economy, Statistics Canada said Friday.

The report pushed the Canadian dollar to a historic high against the U.S. currency in early trading Friday, briefly reaching above 1.07 US.

The new positions -- surpassing analysts' forecasts -- were split between full-time and part-time, the agency said, with more than half of the jobs being created in Ontario and with workers aged 55 and over accounting for the majority of the gains.

Canwest

Put whatever spin you want on this but the Canadian dollar has been rising wrt the US dollar for the past 5 years or so and Canada's unemployment rate is at a 30 year low. This isn't solely because of jobs in Alberta either.

Do the North American vehicle manufacturers sell up to their quota as it is in Japan and Korea?

Who cares? It's irrelevant what Korea or Japan does. Although offhand, and as much as I would like them to, I doubt that they'll ship us their cars for free. Edited November 4, 2007 by August1991

[jdobbin]

Put whatever spin you want on this but the Canadian dollar has been rising wrt the US dollar for the past 5 years or so and Canada's unemployment rate is at a 30 year low. This isn't solely because of jobs in Alberta either.

In the last three months, a majority of the jobs have been created in the public sector.

The three levels of government have all been increasing hiring while the private sector is scaling back. Not good in the long term at all.

[August1991]

In the last three months, a majority of the jobs have been created in the public sector.

Spin. You don't get to a 5.8% unemployment rate by public sector jobs alone and anyway, these people create value too.

The trend has been down for about 10-15 years now.

What is significant is the increased participation rate of people over 55.

The participation rate in October for Canadians aged 55 and over reached an all-time high of 33.8%. This was due in large part to older women, who in October had their highest employment and participation rates in at least three decades.

Statcan Edited November 4, 2007 by August1991

[jdobbin]

Spin. You don't get to a 5.8% unemployment rate by public sector jobs.

The trend has been down for about 10-15 years now.

If you look at the long term trend, sure. If you look at the direction the economy is now, most analysts have started raising the alarm. Is your spin that everything is going great, full steam ahead? Or do you acknowledge that an important dynamic has changed and that the private sector, especially in manufactured goods faces extraordinary challenges?

From the Statcan report, many of the jobs in Ontario were created as a result of the election.

In October, service sector employment grew by 66,000, boosting its growth in the last 12 months to 3.2%. According to the most recent statistics, the gross domestic product of the service sector grew 3.2% in 12 months, compared with a growth rate of 0.8% for the goods-producing sector.

Of all industries, health care and social assistance posted the strongest estimated employment growth in October (+29,000). There was also an increase in "other services" (+24,000), an industry that covers a variety of activities, such as dry cleaning and laundry services, electronic and precision equipment repair and maintenance, as well as grant-making and giving services. As well, public administration added an estimated 20,000 workers in October, all in Ontario.

In contrast to the growth in the service sector, there has been overall weakness in the goods-producing industries, where employment has edged down 0.5% since the start of the year. So far in 2007, significant losses in manufacturing have been almost completely offset by robust gains in construction and utilities. In October, utilities was the only industry in the goods-producing sector to show signs of strength. Utilities include electric power generation, transmission and distribution, natural gas distribution, and water supply and sewage systems.

Back-to-back gains in Ontario

After slow growth throughout most of 2007, employment grew strongly in Ontario for the second consecutive month, up 32,000 in October, mainly in part time. So far in 2007, employment in Ontario has risen an estimated 1.7%, still below the national average of 2.1%.

October's employment growth in Ontario was mainly in public administration and "other services". The growth in public administration was due, in part, to the provincial election, which coincided with the Labour Force Survey reference week.

Edited November 4, 2007 by jdobbin

[sharkman]

Raising the alarm? Haven't you heard that the U.S. economy has been teetering for a few months now? And since we are so closely tied to them our economy should have a down turn as well, though not as drastic since we are in much better shape. A recession, so what, those are a normal part of the business cycle.

Why would you not look at the big picture? Because it looks too good? Huge surpuses, paying off billions in federal debt, historic low unemployment, and the Torys at the helm for it all!

[August1991]

If you look at the long term trend, sure. If you look at the direction the economy is now, most analysts have started raising the alarm. Is your spin that everything is going great, full steam ahead? Or do you acknowledge that an important dynamic has changed and that the private sector, especially in manufactured goods faces extraordinary challenges?

I mean to say that a 5-year rise in the Canadian dollar hasn't had a large effect on aggregate demand.

Some have argued that Canada now trades with other countries (China, India) and this compensates for lost sales in the US. I don't believe so.

IMV, there are three significant facts underlying the Canadian economy. First, the Bank of Canada has kept inflation low (around 2%). Until the 1990s, we didn't have such stable prices. Second, the world wants what we have: natural resources. Thanks to the last ice age, Canada's natural resources are spread all across the country and thanks to history, we have lots of geography. Third, for whatever reason, the babyboomers have decided to keep on working or to go back and double-dip.

In general, the labour market will be tight into the forseeable future.

-----

Let me be partisan for a bit. Electing a Conservative government hasn't hurt and having one with 11 seats in Quebec has reduced uncertainty. And by and large, the neo-classical economic model works.

If we could reduce the size of government, have it regulate less and if we could make it tax more intelligently, then our potential would be that much greater. And we would have the means to help people who truly deserve it or could use it.

Ontario auto workers are not people who need help. It's crazy subsidies to such industries that have lead to Canada's economic underperformance.

As to manufacturing jobs more generally, who cares. We want jobs that create value and if a job requires a direct subsidy or an indirect subsidy through some protection scheme, that's not creating value.

Edited November 4, 2007 by August1991

[geoffrey]

Or do you acknowledge that an important dynamic has changed and that the private sector, especially in manufactured goods faces extraordinary challenges?

They brought these extraordinary challenges on themselves. Canada has a very unproductive, uninnovative industrial culture. It was kept on life support through the low dollar. Now that the rest of Canada has picked up their socks enough to have the dollar climb, the innovation laggards are paying the price. And let them pay.

A bailout now would send the wrong message and distort the market in all sorts of ways. The only thing worse than welfare is the corporate welfare.

[jdobbin]

They brought these extraordinary challenges on themselves. Canada has a very unproductive, uninnovative industrial culture. It was kept on life support through the low dollar. Now that the rest of Canada has picked up their socks enough to have the dollar climb, the innovation laggards are paying the price. And let them pay.

A bailout now would send the wrong message and distort the market in all sorts of ways. The only thing worse than welfare is the corporate welfare.

I've stated quite clearly in this thread that there should be no direct bail-out. Not one one penny directly given to keep a factory in the country.

What I do advocate is huge corporate tax cuts. And by huge, I mean 50% down. We can afford it. At least we could afford it before the GST cut. I still think we have a lot of room to make those cuts. Our corporate rates are higher than the Europeans and only 3% below the U.S.

Since our primary market for goods is the U.S., we need to give our companies an advantage on the tax front.

I expect the manufacturers themselves to use the high dollar to upgrade their factories in a massive way. There is no excuse now for it and there would be even fewer excuses with a low corporate tax structure.

[xram]

Toronto Star

So Hargrove wants to hurt Canadian consumers and Korean and Japanese workers just so he can help out a few highly paid workers in Ontario. If anyone is deserving of support in Canada, it is not auto workers in Ontario. I'd rather see my money go to people earning less than $30,000.

Toronto Star

Flaherty has this right. Cut corporate taxes for all firms. He should not fall into the game of offering special deals and trying to pick winners or pacify cry babies.

----

If government is going to help people, it should help people who need it. Cut taxes for people at low incomes. Giving subsidies to Chrysler would not do that. I hope Flaherty and Prentice hold to their position.

If McGuinty wants to waste Ontario taxpayer's money, then let him do it.

Supporting the auto workers will be supporting people with low income, for every autoworker out there, there are 5 to 7 jobs on the side created that are 30000$ income. (part makers included). You are not just killing one job with your ignorant comment but everything that job support.

The high income autoworker pays high taxes, and those taxes will be again spend in services for low incomes,.......

Flaherty and our governments, provincial or federally, are full of BS.

They can try to save these jobs by helping these companies in a responsible way, not donation and corporate welfare, to create better cars, so they can stay more competitive in this killer market , not just giving away my taxes to who ever buys green car, no mater who build them...

Edited November 4, 2007 by xram

[jdobbin]

Raising the alarm? Haven't you heard that the U.S. economy has been teetering for a few months now? And since we are so closely tied to them our economy should have a down turn as well, though not as drastic since we are in much better shape. A recession, so what, those are a normal part of the business cycle.

Why would you not look at the big picture? Because it looks too good? Huge surpuses, paying off billions in federal debt, historic low unemployment, and the Torys at the helm for it all!

And all this comes with a large and growing trade deficit and stagnant growth in manufacturing.

Why is it so hard for Conservatives to not look at reducing the corporate rate to something lower than the Europeans have? They have a lower corporate than Canada.

Edited November 4, 2007 by jdobbin

[jdobbin]

I mean to say that a 5-year rise in the Canadian dollar hasn't had a large effect on aggregate demand.

Some have argued that Canada now trades with other countries (China, India) and this compensates for lost sales in the US. I don't believe so.

IMV, there are three significant facts underlying the Canadian economy. First, the Bank of Canada has kept inflation low (around 2%). Until the 1990s, we didn't have such stable prices. Second, the world wants what we have: natural resources. Thanks to the last ice age, Canada's natural resources are spread all across the country and thanks to history, we have lots of geography. Third, for whatever reason, the babyboomers have decided to keep on working or to go back and double-dip.

In general, the labour market will be tight into the forseeable future.

-----

Let me be partisan for a bit. Electing a Conservative government hasn't hurt and having one with 11 seats in Quebec has reduced uncertainty. And by and large, the neo-classical economic model works.

If we could reduce the size of government, have it regulate less and if we could make it tax more intelligently, then our potential would be that much greater. And we would have the means to help people who truly deserve it or could use it.

Ontario auto workers are not people who need help. It's crazy subsidies to such industries that have lead to Canada's economic underperformance.

As to manufacturing jobs more generally, who cares. We want jobs that create value and if a job requires a direct subsidy or an indirect subsidy through some protection scheme, that's not creating value.

Our petrodollar and demand for oil and resources has been a good thing and a bad thing. The huge growth in jobs over the last years has hidden some important weaknesses in industrial employment.

Our trade deficits is growing sharply and our ability to export non-resource goods is being affected by the Canadian dollar.

The last three months have shown that government job creation is giving the market the wrong impression of overall job growth.

I have said repeatedly in this thread: no bail-outs. None. Zero. A big goose egg.

We need massive corporate tax cuts right now. Not in a year from now. Not two years from now. Right now. The small corporate tax cut in this mini-budget does nothing for a dollar that is rising even faster than most businesses can adjust for. Business needs a 50% cut in the tax rate immediately.

Edited November 4, 2007 by jdobbin

[Amazing Atheist]

Raising the alarm? Haven't you heard that the U.S. economy has been teetering for a few months now? And since we are so closely tied to them our economy should have a down turn as well, though not as drastic since we are in much better shape. A recession, so what, those are a normal part of the business cycle.

Why would you not look at the big picture? Because it looks too good? Huge surpuses, paying off billions in federal debt, historic low unemployment, and the Torys at the helm for it all!

I hardly credit the conservatives for the economy we have now in Canada. In reality the economy has changed all that much since the liberals got the boot. Not saying the conservatives have been bad for the economy I actually think they aren't doing that bad of a job maintaining what we have, this being said they haven't been in power that long and in no way deserve the credit some of you give them.

As for the BIG picture it doesn't look that good unfortunately at least economically. With massive US debt and a plummeting economy it is really hard to see anything except doom and gloom 20 years from now economically. This spells disaster for us as 90% of our exports go to the US as well.

The question I often ask myself is how long will other nations keep the US economy afloat by lending them money before they all decide to foreclose? It's not to late for them to restructure their economy as so it's sustainable. This however does not appear to be the case and it has many people worried.

I see a new depression in the next 20 years that will start in the US and systematically the world as the market is now globalized. Can't say how bad it will be but with things like global climate change among other factors not being taken into account it won't be pretty that I know for sure.

[August1991]

Supporting the auto workers will be supporting people with low income, for every autoworker out there, there are 5 to 7 jobs on the side created that are 30000$ income. (part makers included). You are not just killing one job with your ignorant comment but everything that job support.

The high income autoworker pays high taxes, and those taxes will be again spend in services for low incomes,.......

Flaherty and our governments, provincial or federally, are full of BS.

They can try to save these jobs by helping these companies in a responsible way, not donation and corporate welfare, to create better cars, so they can stay more competitive in this killer market , not just giving away my taxes to who ever buys green car, no mater who build them...

Why does any taxpayer largesse have to take a circuitous route through Chrysler's bank account, to a CAW worker to the cashier working minimum wage at the local grocery store? Why not simply give the money to the cashier through lower taxes?

We need massive corporate tax cuts right now. Not in the a year from now. Not two years from now. Right now. The small corporate tax cut in this mini-budget does nothing for a dollar that is rising even faster than most businesses can adjust for. Business needs a 50% cut in the tax rate immediately.

You won't really have an argument from me on this, Dobbin.

I will say that if Harper announced that he was going to raise the GST to 8% and cut corporate tax to 10%, the chance of his re-election would be tough as he entered the campaign with poll numbers in the single digits. His credibility would be in shreds.

Taxes may be economic questions but they exist in a political world.

I'd be happy if governments stopped doling out cash to people such as Chrysler shareholders and employees who don't need it. Flaherty's statement was a voice of sanity.

Edited November 4, 2007 by August1991

[geoffrey]

Since our primary market for goods is the U.S., we need to give our companies an advantage on the tax front.

Look at the provinces then. Alberta and BC have the only competitive tax rates when compared to US jurisdictions, Alberta is actually the 3rd cheapest tax jurisdiction in North America.

Let the provinces make that choice. If the Federal government wants to cut rates, that's great, but the Federal rate is already lower than the US.

The US rate is 35% for most businesses, before State taxes. After State/Provincial taxes, Canada is more costly than the US. Hmm.

Flaherty's proposal moves us to the 3rd lowest Federal tax system in the OECD, only Switzerland and Ireland are lower (and they dont' really compete with us in any industry... Ireland's rate is also report lower than it really is because of the effects of copyright tax law and other weird things they've got going on over there).

Provinces have to take the intitive to reduce taxes to levels competitive with their counterparts in the US. Even Alberta's rate is too high, and it's the lowest in Canada.

http://www.oecd.org/document/60/0,2340,en_...1_37427,00.html

http://www.alberta-canada.com/economy/posi...porateTaxes.cfm

I expect the manufacturers themselves to use the high dollar to upgrade their factories in a massive way. There is no excuse now for it and there would be even fewer excuses with a low corporate tax structure.

100% Agreed.

[August1991]

As for the BIG picture it doesn't look that good unfortunately at least economically. With massive US debt and a plummeting economy it is really hard to see anything except doom and gloom 20 years from now economically. This spells disaster for us as 90% of our exports go to the US as well.

The question I often ask myself is how long will other nations keep the US economy afloat by lending them money before they all decide to foreclose? It's not to late for them to restructure their economy as so it's sustainable. This however does not appear to be the case and it has many people worried.

You view it as a debt. Fine.

But how would you describe a young couple that walks out of a credit union with their first mortgage and into their first home?

The credit union lends to them because they're a good investment choice. They're young, energetic, have potential and have a track record. Such is the US on the world stage

The world is shipping its stuff to the US and accepting financial claims in return because the US is the best place to invest on the planet. All things considered, it offers the best potential returns. When someone lends you money, it's a statement of their confidence in you. In the case of the US, there's a little more than confidence involved. The foreigners are not doing to be nice. They know that they'll get a good return - better than they can get elsewhere.

Edited November 4, 2007 by August1991

[jdobbin]

You won't really have an argument from me on this, Dobbin.

I will say that if Harper announced that he was going to raise the GST to 8% and cut corporate tax to 10%, the chance of his re-election would be tough as he entered the campaign with poll numbers in the single digits. His credibility would be in shreds.

Taxes may be economic questions but they exist in a political world.

I'd be happy if governments stopped doling out cash to people such as Chrysler shareholders and employees who don't need it. Flaherty's statement was a voice of sanity.

You obviously can't sell a corporate tax cut and raise the GST. You'd have to lower income taxes for the people as well.

The Liberals were wrong in the 1980s about the GST. They didn't understand how unfair the old manufacturers sales tax was. And if they did know, they were silent on it because it was a hidden tax. The Tories weren't right either when they said the tax was going to be revenue neutral. We all know that wasn't correct.

The one thing that economists agree on is that the GST has less of an impact on business and the people than income taxes. Lower those and business and people feel freer to invest.

Most tax measures are not going to be popular and that is why they have to measured. Harper picked the GST because it was different policy than what the Liberals had on lowering sales tax. It was a popular measure and contributed to getting him elected. However, the first sales tax cut didn't do anything for overall Tory poll numbers. Moreover, it certainly didn't help business in a significant way with their overall tax structure.

I totally agree that Flaherty shouldn't give in and try to bail out Chrysler. But I don't like that he somehow thinks that what he did in the mini-budget is significant enough for our industrial sector to compete. It isn't.

[jdobbin]

Look at the provinces then. Alberta and BC have the only competitive tax rates when compared to US jurisdictions, Alberta is actually the 3rd cheapest tax jurisdiction in North America.

Let the provinces make that choice. If the Federal government wants to cut rates, that's great, but the Federal rate is already lower than the US.

The US rate is 35% for most businesses, before State taxes. After State/Provincial taxes, Canada is more costly than the US. Hmm.

Flaherty's proposal moves us to the 3rd lowest Federal tax system in the OECD, only Switzerland and Ireland are lower (and they dont' really compete with us in any industry... Ireland's rate is also report lower than it really is because of the effects of copyright tax law and other weird things they've got going on over there).

Provinces have to take the intitive to reduce taxes to levels competitive with their counterparts in the US. Even Alberta's rate is too high, and it's the lowest in Canada.

I agree that provinces need to lower their tax rates as well. However, I don't think a 3% margin with the U.S. is enough incentive for businesses in Canada. It needs to be lower still. Moreover, the U.S. is going to lower their corporate taxes again shortly so we will have to move down even more to compete.