Canada – the new tax haven?

posted at 11:36 am on June 30, 2009 by Ed Morrissey

Bermuda and the Cayman Islands may have some competition for Barack Obama’s vitriol over tax havens if Canada keeps on its low-business-tax course.  The Harper government in Ottawa has quietly dropped its corporate tax rate and has pressed the provinces to do the same in order to get to a low combined tax rate for businesses.  American companies pressed by the threat of the Obama administration to tax overseas profits have begun to notice:

In a clear indication that Canada is starting to be considered a low-tax place to do business, Tim Hortons Inc. announced Monday plans to shift its base of operations from Delaware to Canada for tax purposes.

Further, analysts indicate this is also a sign of unease among corporations regarding the U.S. business environment, where taxes are likely heading upward to deal with trillion-dollar deficits and proposed health-care reforms; and the White House is looking to crack down on companies that invest abroad. …

In Canada, the federal corporate tax rate is headed to 15% in 2012, and the federal Conservative government has called on the provinces to get to a 10% business levy by the same timeframe – for a combined 25% rate on corporate income. Alberta is already at 10%, British Columbia will be there in 2011, Ontario by 2013, and New Brunswick will go down further, to 8%, in 2012.

In the United States, the top corporate tax rate is in the mid-30% range. As a result, the U.S. now has about the highest combined corporate tax rate, second only to Japan among industrialized countries.

Obama’s plan to close the “loophole” of foreign profits will push more American companies into relocating abroad.  Taxing foreign profits at the same rate as domestic earnings will place a competitive burden on American companies that grants an advantage to foreign competitors.  Eventually, American companies will either have to withdraw from global competition and compete solely at home, or they will have to move out of the US in order to return to an equal tax position as their competition, whose governments only tax them on domestic earnings.

The administration scoffed at the notion that vast numbers of corporations would move their headquarters — and employees — out of the US and overseas, but now that won’t be necessary.  They can simply cross the northern border into Canada, many to the high-tech city of Toronto, to establish themselves as a Canadian company.  The lower taxes at home, along with the lack of requirement to treat all income as domestic for tax purposes, would allow them to compete more easily.  It would also put them out of the reach of the decidedly business-unfriendly White House, which has stirred up populist resentment towards the corporate world since the first day Obama arrived.

Perhaps Obama should learn from Stephen Harper instead of fighting him.  In this fight, Harper will win — and all of us will lose.


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more oil and gas exploration

Who needs that, we have the with which to power Barry’s teleprompter and what more do we need than the words of Great Leader?

NoDonkey on June 30, 2009 at 2:14 PM

Sounds like Canada is able to see the writing on the wall and is quietly taking advantage of Mr. Obama’s foolish and destructive agenda to our economy.

Miss Molly on June 30, 2009 at 1:37 PM

Folly isn’t it? This period in American history will go down as OBAMA’S FOLLY.
It is so nfuriating to be in the American bus as it is headed over the cliff. Since Obama is driving he should impact first. But his leftist air cushion is all around him. Obama will be dragging many people to economic suicide. How muck Obamaid is left in the vat?

izoneguy on June 30, 2009 at 2:16 PM

Eventually, as more businesses and people seeking economic freedom flee Obama’s Worker’s Paradise of unemployment, he will need to reconsider his no border fence policy in order to keep the people from fleeing rather than to keep them from coming in. When people can vote with their feet, they vote against Marxism and its sham elections.

KW64 on June 30, 2009 at 2:55 PM

Do any of you see a huge devaluation of the US dollar happening in the next few years as a way of repaying these debts? (
can_con on June 30, 2009 at 2:01 PM

Oh, I think that’s been BO’s plan all along. He says he plans to grow the economy out of it, even while he crams down our throats one massive anti-growth measure after another. So what he actually intends, his words notwithstanding, is to inflate our way out of it.

Trouble is, China seems wise to BO’s con, so it’s buying gold and moving toward an alternative reserve currency.

What is the plan when China refuses to buy US debt?

None that I’m aware of.

petefrt on June 30, 2009 at 3:13 PM

OBAMA’S FOLLY.

izoneguy on June 30, 2009 at 2:16 PM

I like it.

Somebody put it in a commercial about Cap and Trade full of charts and stats.

Hello?

Hello?

cntrlfrk on June 30, 2009 at 3:17 PM

Perhaps Obama should learn from Stephen Harper instead of fighting him.

Maybe Mao Obmama should learn from The Talking Heads.

Hold tight wait till the partys over
Hold tight were in for nasty weather
There has got to be a way
Burning down the house

Heres your ticket pack your bag: time for jumpin overboard
The transportation is here
Close enough but not too far, maybe you know where you are
Fightin fire with fire

All wet
Hey you might need a raincoat
Shakedown
Dreams walking in broad daylight
Three hun-dred six-ty five de-grees
Burning down the house

MB4 on June 30, 2009 at 5:25 PM

Yup; come on over! I know Ontario (spit) and Toronto (double spit) are the only places in Canada you’ve ever heard of, but head to Western Canada (British Columbia, Alberta, Saskatchewan and Manitoba). Calgary and Vancouver are way better places to do business than Toronto (double spit). We have great scenery, wide open spaces, abundant natural resources, access to Asian and N. American markets. Western Canadians aim to prosper from their own initiative and hard work. Oh yes, we have lower corporate taxes too.

westerncanadian on June 30, 2009 at 5:42 PM

westerncanadian on June 30, 2009 at 5:42 PM

I visited friends in Whistler. Looked at North Van, prices on homes are unreal. I figure after 2010 Games will be the time to bottom feed.

SkinnerVic on June 30, 2009 at 7:29 PM

How does one immigrate to Canada?

paulsur on June 30, 2009 at 9:14 PM

How does one immigrate to Canada?

paulsur on June 30, 2009 at 9:14 PM

Can you not have your wife give birth in Canada and have an anchor baby? Wait, I think they abolished birth-right citizenship a few years ago.

bayview on June 30, 2009 at 9:30 PM

How does one immigrate to Canada?
paulsur on June 30, 2009 at 9:14 PM
Can you not have your wife give birth in Canada and have an anchor baby? Wait, I think they abolished birth-right citizenship a few years ago.
bayview on June 30, 2009 at 9:30 PM

Canada is one of the most easy places to immigrate to. If you want to immigrate to Canada you will find it very easy. Find a job in Canada. which is plentiful then get Canadian Citizenship after just few years. If you make under 70K USD then no US income tax. Get a local contract and try and pay into local retirement fund, that way you can avoid paying into the US system which is going broke. Another idea is to go to former Communist country or China to find freedom. US, Philippines and North Korea are only countries who tax it’s overseas corporations and citizens. Many former US companies have immigrated overseas ownership. Look at GM. Only way it can survive is to sell off parts to overseas companies.
The Exit door is jammed with companies and people leaving US for freedom. If Obama tries to go after the few tax breaks US overseas companies get, then good bye US companies. Americans are so proud that they have screwed them self.

Ed Laskie on June 30, 2009 at 9:50 PM

Mullahs of multiculturalism? PERFECT!
Even better than ‘nabobs of negativism’.
petefrt on June 30, 2009 at 1:06 PM

The muttering mullahs of multiculturalism.

Yup; come on over! I know Ontario (spit) and Toronto (double spit) are the only places in Canada

You must be a Corner Gas fan, westerncanadian.

andycanuck on June 30, 2009 at 11:24 PM

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