This document discusses Canada's declining competitiveness under the Liberal government according to various global rankings and statistics. It analyzes Canada's falling rankings in areas like taxation, productivity, innovation, labor costs, hydro rates, and regulatory burden since 2015. Specific Liberal policies like the carbon tax, changes to small business taxes, CPP hikes, and Bill C-69 are criticized for reducing competitiveness versus the US. Charts and data are presented comparing metrics between Canada and the US as well as other nations. Conservative Party economic policies are presented as alternatives that could improve Canada's competitiveness.

1. Election 2019 - Canada is
losing its Business
Competitiveness
BY: PAUL YOUNG CPA, CGA
DATE: AUGUST 8, 2019

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
 Global Competitiveness Ranking
 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
 Blog – Competitiveness
 Blog – Oil and Gas
 Red Tape / Canada
 Blog – Unifor
 Blog – Scheer vs FP
 Automotive
 Forestry
 Mining

4. Cost Competitiveness
 Market set prices for business
 Canada goods producing sector jobs as % of total jobs has decreased since the Liberals took office in
2015
 Liberals impose new small business tax rules (Passive Income and Income Sprinkling)
 Government set policies like environment laws, labour laws, trade/investment, taxation
 Canada new C69 will drag out approval for resource projects by years.
 It is not one policy that drives FDI, but many policies
 FDI has left Canada for other jurisdiction due to taxes and regulatory processes -
http://business.financialpost.com/commodities/energy/canadian-drillers-moving-rigs-south-to-chase-
better-prospects-in-texas-oilfields

5. Global Competitiveness Ranking
Trudeau was wrong!
1. More regulations – C69 - https://www.cbc.ca/news/politics/tasker-
kenney-bill-c69-amendments-1.5147516
2. Trudeau decided to hike CPP - https://www.cfib-
fcei.ca/en/media/2019-cpp-increase-isnt-worth-pain-small-
businesses
3. Small business tax reforms - https://www.bdo.ca/en-
ca/insights/tax/tax-articles/implications-of-the-governments-tax-
changes-on-the-technology-sector/
4. Trudeau is not focusing investment on getting goods to market -
https://www.slideshare.net/paulyoungcga/2019-election-fdi-
foreign-direct-investment-canada
5. Trudeau environmental ranking is also nothing to brag about as it is
on par with Harper
https://www.slideshare.net/paulyoungcga/business-
competitivesness-canada-march-2019 or
https://www.slideshare.net/paulyoungcga/2019-election-gdp-and-
economy-canada-may-2019
https://www.bloomberg.com/news/articles/2019-05-28/singapore-
dethrones-u-s-to-top-world-competitiveness-rankings

6. Conservative Party of Canada vs Liberal
Party of Canada – Ranking Globally
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 or https://www.expertmarket.co.uk/focus/worlds-most-productive-countries-2017 or
https://www.investinontario.com/spotlights/kearney-reports-worlds-most-attractive-destinations-foreign-direct-investment or https://en.portal.santandertrade.com/establish-overseas/canada/foreign-investment
Policy Area 2015 2017
Taxation 9th 17th
Productivity 18th 13th
Innovation 15th 18th
FDI 13th

7. 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.

8. CCA – Capital Cost Write-down
@Bill_Morneau
Just how are you going to make Canada more
competitive? It is not your small business tax
reforms or C69 or hikes to CPP or carbon tax,
right?
https://www.cbc.ca/news/politics/morneau-
trump-capital-tax-fall-economic-statement-
1.4908012?fbclid=IwAR1w4mRFpyr0w5slPTpYmn
dVW74_hMU1XjU6KNcSZPqZ5J0GxqQ-
5WQvPhM
@ontarioisproud
Finance Minister Bill Morneau is unlikely to fully
match the Trump administration's pricey changes
to the way American businesses write off their
capital costs when he delivers his fall economic
statement next week, says a senior government
source.
Canadian business leaders argue the American tax
changes have created a competitiveness gap
between U.S. and Canada. But those changes also
have added tens of billions of dollars to the U.S.
deficit — something Canadian officials say they
want to avoid.
CBC article is misleading as USA states have corporate tax and/or franchise taxes. https://taxfoundation.org/us-
corporate-income-tax-more-competitive/. The issue is Morneau has increases taxes through small business tax
reforms, mandatory carbon tax, hikes to CPP along with more regulations like C69

9. 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 or
https://www.expertmarket.co.uk/focus/worlds-
most-productive-countries-2017
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.

10. 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

11. Labor Rates / Tax Burden
 Source - https://taxfoundation.org/comparison-tax-burden-labor-oecd-2016/

12. Labor Costs

13. 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. Regulatory Burden
Source - https://www.forbes.com/sites/kurtbadenhausen/2016/12/21/sweden-heads-the-
best-countries-for-business-for-2017/#1215046c7ecd

15. Environmental Ranking
 Source – Yale University
Source -
https://issuu.com/2016yaleepi/docs/e
pi2016_final

16. Carbon Tax / Competitiveness
 Source - https://gncc.ca/business-costs-canadian-competitiveness-not-crying-wolf/?

17. 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

18. 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

19. FDI – Canada
Source -
https://en.portal.santandertr
ade.com/establish-
overseas/canada/foreign-
investment

20. Canada Labour Productivity
Source - http://www.statcan.gc.ca/daily-quotidien/171206/dq171206c-eng.pdf

21. Canada has a Competitive Problem
 Canada is less competitive today due to more regulations, new taxes (carbon tax), changes to small business,
hikes to CPP and EI and high hydro rates - https://www.slideshare.net/paulyoungcga/cost-competitiveness-
canada-april-2018
 Liberals were supposed to be about getting goods to market, right?
 http://www.cbc.ca/news/politics/tax-rate-u-s-canada-1.4714866
 http://business.financialpost.com/opinion/jack-mintz-end-the-denial-and-admit-it-canada-has-a-competitiveness-
problem
 Liberals and Natural Resources - https://www.slideshare.net/paulyoungcga/2019-election-natural-resources-
canada-august-2019

22. 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

23. Ontario / Cost Competitiveness
 Premier Wynne can bitch at business for making cost adjustment to her increasing the minimum wage by 21%
on January 1, 2018.
 Here are things ignored by Wynne:
 Hydro Rates – Ontario has some of the highest hydro rates in North America -
http://www.cbc.ca/news/canada/kitchener-waterloo/kitchener-toronto-factory-industry-electricity-rates-1.4011519
 Carbon Taxation was introduced which is just cash grab that forces up costs to consumers -
https://www.atlasnetwork.org/news/article/canada-should-learn-from-australias-failed-carbon-tax-experiment
 Sousa eliminated EHT threshold - https://www.ggfl.ca/uploads/files/Changes_Employer_EHT.pdf
 Wynne has drag her feet on getting resource projects off the ground - http://www.cbc.ca/news/canada/thunder-
bay/thunder-bay-ring-of-fire-1.4442435
 Ontario debt is a big problem - https://www.thestar.com/news/queenspark/2017/12/11/ontarios-fiscal-watchdog-
doubts-books-are-balanced.html
 Other tax increases

24. NEB – Oil and Natural Gas
https://www.canadianmanufacturing.com/manufacturing/global-
oil-production-hits-a-new-record-led-by-u-s-and-opec-219376/
“U.S. production has returned to 2014 boom levels, but the
energy agency said U.S. output will grow more slowly next year
due to bottlenecks in getting oil to markets.”
USA is also struggling with capacity including ports and pipeline
to get oil exported and/or for internal use by consumers
Canada continues to see only 4% production improvement in
2018 as compare to 2017. The bulk of Canada is export growth
has been the change in oil pricing. Oil is closing in on $71/barrel.
- https://www.slideshare.net/paulyoungcga/oil-market-analysis-
and-commentary-july-2018
C69 - https://www.bnnbloomberg.ca/video/bill-c-69-would-
create-more-energy-project-delays-senator~1480308
Trudeau’s team includes anti-oil people like Gerald Butts and Sara
Goodman (formerly of Tides -
https://www.linkedin.com/in/sarahgoodman/?originalSubdomain
=ca
Geo-Political Events are also impacting oil. USA is pushing for
tighter sanctions against Iran. Venezuela is in free-fall in terms of
its failed socialism policies. “The Organization of the Petroleum
Exporting Countries accounts for about one-third of all
production. In August, rising output in Libya, Iraq, Nigeria and
Saudi Arabia offset declines in Iran, which is about to face new
U.S. sanctions that are already hurting Iranian exports, and in
Venezuela.”

25. CPC Economic Plan – Scheer vs FP
 https://business.financialpost.com/news/economy/andrew-scheers-economic-vision-is-right-out-of-
1993?utm_term=Autofeed&utm_medium=Social&utm_source=Facebook&fbclid=IwAR1yKG0p_mng0FAouwsttROJD8RpgJMxKdT1SQ1c22SWkARGP
1_p7K8NPYQ#Echobox=1558497878
 Scheer might have tried to reach across filter bubbles by acknowledging that balanced budgets, lower taxes, and pipelines aren’t a cure for
everything. The innovation economy is based on ideas; therefore, education matters more than anything. ”
 Scheer talked about regulations which impact productivity as the more time spent doing regulatory filings eats into your ability to focus on your sales
growth – CFIB - https://www.cfib-fcei.ca/en/media/nearly-one-third-36-billion-cost-regulation-canada-unnecessary-red-tape - How is scrapping C69
not part of reducing the regulatory burden?
 The economy is also not what Trudeau makes it out to be with his various posts - https://www.slideshare.net/paulyoungcga/2019-election-economy-
and-gdp-growth-cpc-vs-lpc
 Canada ITA needs to be review as part of tax fairness. Scheer talks about taxation which are an issue in terms of competitiveness
https://www.slideshare.net/paulyoungcga/2019-election-taxation-reforming-the-ita-and-shutting-down-tax-havens or
https://www.slideshare.net/paulyoungcga/business-competitivesness-canada-march-2019
 Scheer talked about innovation. It was Harper that brought in many innovation funds. I am not sure the authors grasp that innovation will continue
under Scheer - https://www.slideshare.net/paulyoungcga/2019-election-technology-sector-canada-may-2019 (Canada was ranked#2 in 2015 under
Harper when it came to supporting startups. Trudeau has seen a drop to #3 under his watch. Trudeau decided that more taxes and excessive
regulations would be his legacy.
 Scheer has talked about other aspects of the economy many times. Scheer is not just focus on Oil. BTW: Natural Resources are still about 11% of GDP
as such they are key segment. So, why did the authors miss that point? https://www.slideshare.net/paulyoungcga/natural-resources-sector-policy-
analysis-canada-january-2019
 Scheer also can work with better governments at the provincial level that are looking at closing the skills gap. Both NDP and Liberals policies tend to
focus on service sector and government jobs. https://www.slideshare.net/paulyoungcga/education-skills-and-development-human-capital-
management-canada-may-2019

26. Unifor and GM
 https://www.youtube.com/watch?v=rzI2UHYVX40
@JerryPDias
I am so glad GM pushed back at you and your leadership. You never once called
out bad policies by govts, why?
FYI
I will buy what vehicle that I want to buy. Your statements will not change my
buying pattern.
 https://www.wxyz.com/news/unifor-canada-airs-super-bowl-ad-slamming-gm-
for-plans-to-close-oshawa-plant

27. Government / Red Tape Ranking
Source - https://www.miamiherald.com/news/local/news-columns-blogs/andres-oppenheimer/article183801461.html or https://www.cfib-
fcei.ca/sites/default/files/2018-01/2018-Red-Tape-Report-Card_0.pdf

28. Doing Business / World Bank
Source - http://www.doingbusiness.org/en/rankings

29. Automotive – Sector

30. Forestry– Sector

31. Mining Sector / Regulations
Source - http://www.mining.com/canada-the-worlds-top-mining-destination-despite-saskatchewan-
fall/

32. 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.

33. Contact Information
 Contact: paul_young_cga@Hotmail.com
 Other Sources
 Manufacturing - https://www.slideshare.net/paulyoungcga/manufacturing-canada-vs-
united-states
 Environment – https://www.slideshare.net/paulyoungcga/art-of-taxing-the-
environment-through-carbon-pricing
 Middle Class - https://www.slideshare.net/paulyoungcga/canada-middle-class-october-
2018
 What’s next for Oil - https://www.slideshare.net/paulyoungcga/whats-next-for-oil