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Tax cuts help businesses grow: Myers

Published by Derek Lothian on January 25, 2012

By Jayson Myers, President & CEO, CME

In response to the January 25th Toronto Star column, Canada can’t afford corporate tax bonanza, written by Canadian Labour Congress President Ken Georgetti.

Contrary to what Ken Georgetti says, business tax cuts are benefiting Canadians in very important ways. Business investment in machinery and equipment has increased by 30 percent over the past two years alone. Investment in new facilities, meanwhile, is up 15 per cent over the same period of time.

Businesses invested more than $85 billion in energy, resource, shipbuilding, and infrastructure projects last year, and that amount is likely to double by 2015. Half a million new jobs have been created in Canada since 2007, and 80 per cent of those are private sector jobs. Average earnings in Canada's business sector are 12 per cent higher than in 2007 as well.

While corporate tax rates have fallen, the amount of money businesses are paying to government is - in fact - increasing because their investments have made them more competitive, more profitable, and have allowed them to grow. And, yes it's true: corporate dividends are up as well - dividends that reward shareholders in major Canadian companies including, of course, our pension funds.

If governments had not provided tax relief for Canadian businesses, the recession would have been deeper and unemployment would have certainly been higher. Now, however, we have a business sector that is more profitable, with stronger cash balances that are helping to cushion the impact of continued financial volatility. And we have a corporate sector that is better poised to take advantage of new market opportunities, which will, in turn, continue to generate job growth.

 

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