Market set prices for business
Government set policies like environment laws, labour laws, trade/investment, taxation
It is not one policy that drives FDI, but many policies
2. Paul Young - Bio
• CPA, CGA (1996)
• Financial Solutions (FOPM/FPM)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Advance Technology and Market
Entry
• SME – Supply Chain Management
• SME – Business Strategy and
Restructuring
Contact information:
Paul_Young_CGA@Hotmail.com
3. Agenda
Taxation
Productivity
Innovation
Labor Rates/taxation burden
Hydro Rates
Regulatory Burden / Business Climate
USA Manufacturing Focus
Canada and USA PMI Index
Labor Productivity
Issues at Hand
Blog - Taxation – Corporate and Business Taxes
4. Cost Competitiveness
Market set prices for business
Government set policies like environment laws, labour laws, trade/investment,
taxation
It is not one policy that drives FDI, but many policies
5. Taxation / Ranking
Source - https://taxfoundation.org/corporate-income-tax-rates-around-world-2016/ or http://www.pwc.com/ca/en/media/release/canada-ranks-2nd-among-g7-nations-ease-of-corporate-tax-payment.html
Canada fell in 2017 from 9 to 17. Liberal Party of Canada Took over in 2016.
6. Ranking / Canada Productivity
Source - http://time.com/4621185/worker-productivity-countries/
Source -
https://www.forbes.com/sites/jackzenger/20
13/01/17/the-3-forces-that-drive-improved-
productivity/#3ff2246239a8 or
http://blogs.worldbank.org/growth/what-
drives-productivity
It is also called TFP (total
factor productivity) and
measured as a residual – the
difference between outputs
and a set of inputs (e.g. labor,
capital, and intermediate
goods, including energy, land
and buildings). Measurement
problems plague both inputs
(e.g. how do you account for
quality of labor or capital) and
outputs.
7. Innovation Ranking
Source - http://www.wipo.int/pressroom/en/articles/2017/article_0006.html
• Canada has fallen 3
spots in 2016 from 15 in
2015 to 18 in 2016
• Liberals ran a platform
on spending on
innovation -
https://www.thestar.com
/news/canada/2017/03/1
2/liberals-nearing-
decision-on-how-to-
spend-800m-earmarked-
for-innovation.html
10. Hydro Costs / Ranking
http://www.worldatlas.com/articles/electricity-rates-around-the-world.html
• BC, MB and PQ generate the bulk of
their power through Hydro
• Ontario is out there when it comes
to high rates across North America
• Liberal Government is pushing FIT
at the federal level via their carbon
taxation policies -
http://www.torontosun.com/2017/0
7/20/canadian-youth-will-have-to-
wait-for-promised-green-jobs
14. USA Manufacturing - refocus
http://mfgday.industryweek.com/2017/10/04/forty-percent-increase-in-u-s-manufacturing-is-achievable/?NL=IW-
07&sfvc4enews=42&cl=article_2&utm_rid=CPG03000001519274&utm_campaign=22234&utm_medium=email&elq2=e309b6bd6398
4baeb8d9b9f5691c9239
15. PMI Index – Canada and USA
Source - https://www.theguardian.com/business/live/2017/oct/02/uk-manufacturing-growth-hard-brexit-eurozone-monarch-airline-fails-business-live or http://www.marketpulse.com/20171002/canada-ihs-markit-manufacturing-pmi/
USA PMI Canada PMI
17. Blog - Corporate and Business Taxes
http://business.financialpost.com/news/economy/major-tax-bill-passes-in-u-s-big-consequences-big-debates-ahead-for-
canada
“it reduces American corporate taxes, which were among the highest in the industrialized world, down to levels
equivalent to Canada’s when combined with state and provincial rates.
Some observers say Canadian policy-makers will feel pressure to respond, either by reducing corporate rates or using other
policy tools to make the country a more attractive investment destination.
Tax planning will change – Companies will look at how the managed their shared services in terms of cost sharing.
Capital investment – Canadian companies may look at expanding their operations in the USA to take advantage of the lower
corporate tax rates
Deferred Income Taxation will need to be adjusted to the new rates. Deferred income taxes are difference to what you report
for accounting and tax
Canada will need to revisit its tax policies, especially R&D credits, payroll taxes, corporate taxes, etc
Canada is moving to carbon taxation including more regulations. The USA is moving to low tax and low regulations
18. Summary
Hydro Costs
Ontario and many of the Atlantic provinces are struggling with unsustainable residential and business rates for Hydro
The Federal Government plans to introduce FIT at the federal level. FIT was a failure in Ontario - https://www.theglobeandmail.com/opinion/a-sunny-
ontario-experiment-gone-wrong/article19890164/
Regulatory burden varies across Canada
New taxation using leads to more regulatory filings
New labor policies (Alberta and Ontario)
Innovation funds to be effective need to be open to everyone.
Tax policies need to be revised to encourage more innovation spending by business
Wages have been stagnant for over 30+ years.
Small Business Tax Proposal needs to be scrapped (http://www.canadianmanufacturing.com/manufacturing/tax-reform-devastating-
small-manufacturers-cme-says-202423/
USA Tax reforms (http://fortune.com/2017/09/30/tax-reform-three-questions-for-business/)
USA moving to reducing business taxes while Canada is hiking various business taxes
Business will invest where they can get their return required by the business model.
It is not one policy that drives cost competitiveness, but many policies
Liberal are introducing carbon taxation, hikes to payroll taxes, no reduction in time to get projects approved.