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Cut corporate income taxes massively to increase growth, prosperity

Published

12 months ago

6 minute read

From the Frontier Centre for Public Policy

By Ian Madsen

Business groups are justifiably opposed to the federal government’s June 25 increase of the inclusion rate for capital gains tax. But there is another corporate income tax increase looming. It will come in the form of a 2018 corporate tax reduction that is set to expire starting this year. Ottawa ironically intended it to make Canada more competitive amid the 2018 tax reform and cut in the United States.

According to a study by Trevor Tombe at the University of Calgary’s School of Public Policy, Canada’s corporate income tax rate on new investments will jump from 13.7 percent to 17 percent by 2027. Even worse, for Canada’s high-value-added manufacturing sector, taxation will triple. Higher corporate income taxes, in a nation experiencing difficulties in encouraging domestic or foreign investment in new plant equipment, will struggle to reverse meagre productivity growth—a problem noted by the Bank of Canada.

Heavier taxation will hinder future improvement in incomes and the standard of living, making it a serious issue. Increasing income tax on businesses and investment will not increase prosperity and personal income. The legislation to make the 2018 provisions permanent is, alarmingly, not urgent to politicians.

At least one policy could make Canada more attractive to business, investors, and hard-pressed ordinary citizens. It would be to slash corporate income taxes substantially.  Another is to make paying taxes easier, as Magna Corporation founder Frank Stronach suggested. It may surprise some Canadians, but Ottawa’s take from corporate income taxes is a relatively small. However, it is a fast-rising proportion of federal overall revenue: 21 percent in fiscal 2022–23, according to the government, up from 13 percent in fiscal 2000–21, notes the OECD.

Letting companies pay taxes and reducing the tax burden on ordinary people might seem OK to some. However, what happens is that every corporate expense, including taxes, reduces cash flow that reaches individuals. The money remaining in the hands of businesses could either be reinvested or paid out as dividends to owners. Let’s remember that owners are founding families, pension fund beneficiaries (employees, citizens), and ordinary individuals.

As there are fewer available funds, there will be a reduced capacity for capital investment. Investment is required to replace existing equipment, or add new equipment, devices, software, and vehicles for businesses. It only keeps companies competitive and makes employees more productive. This, in turn, makes the whole economy more profitable, thereby increasing taxes paid to governments.

As for the questionable reason for the tax increase, aiming to generate more revenue, recent experience in the United States is informative. The 2017 Tax Cut and Jobs Act reduced corporate income tax from 39 percent of pre-tax income to 21 percent. It resulted in U.S. federal corporate income tax revenue rising 25 percent from 2017 to  2021. Capital investment  rose dramatically too, by 20 percent, a key goal of many Canadian policymakers.

Until recently, the Republic of Ireland had a corporate income tax rate of 12.5 percent, a key selling point in its successful efforts to attract foreign investment over the past several decades. Ireland, with few natural resources, is one of the richest and fastest-growing of the OECD nations, despite a bad real estate crash 15 years ago. Near the lowest in the OECD in tax burden, it nevertheless has a high quality of life and services.

If anything, Canada should cut corporate income taxes to below the levels of its main trading partners and rivals. To do so, it will have to extricate itself from the ill-conceived international treaty that compels signatory nations and territories to have a floor rate of at least 15 percent of pre-tax income.   Ottawa seems enamoured of multinational agreements and organizations, so it may be highly reluctant to abrogate membership in this growth-dampening arrangement. The statutory federal corporate income tax rate in Canada is 15 percent, but all provincial governments impose their own levies on top of that, ranging from 8 percent in Alberta to 16 percent in Prince Edward Island.

By cutting taxes, we can pave the way for a brighter economic future, marked by increased productivity and the prosperity we all yearn for. This move will also ensure our international competitiveness, a goal we are currently struggling to achieve with our current 25 percent rate (OECD).  Canada has a hard time attracting investors. Raising taxes will neither attract more of them nor encourage more investment from existing Canada-domiciled entrepreneurs and companies.

Ian Madsen is senior policy analyst at the Frontier Centre for Public Policy.

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Trump makes impact on G7 before he makes his exit

Published on June 17, 2025

By

Trump Rips Into Obama and Trudeau at G7 for a “Very Big Mistake” on Russia

At the G7 in Canada, President Trump didn’t just speak—he delivered a headline-making indictment.

Standing alongside Canada’s Prime Minister, he directly blasted Barack Obama and Justin Trudeau, accusing them of committing a “very big mistake” by booting Russia out of the G8. He warned that this move didn’t deter conflict—it unleashed it, and he insists it paved the way for the war in Ukraine.

Before the working sessions began, the two leaders fielded questions. The first topic: the ongoing trade negotiations between the U.S. and Canada. Trump didn’t hesitate to point out that the issue wasn’t personal—it was philosophical.

“It’s not so much holding up. I think we have different concepts,” Trump said. “I have a tariff concept, Mark [Carney] has a different concept, which is something that some people like.”

He made it clear that he prefers a more straightforward approach. “I’ve always been a tariff person. It’s simple, it’s easy, it’s precise and it just goes very quickly.”

Carney, he added, favors a more intricate framework—“also very good,” Trump said. The goal now, according to Trump, is to examine both strategies and find a path forward. “We’re going to look at both and we’re going to come out with something hopefully.”

When asked whether a deal could be finalized in a matter of days or weeks, Trump didn’t overpromise, but he left the door open. “It’s achievable but both parties have to agree.”

Then the conversation took an unexpected turn.

Trump went off script and straight to one of the most explosive foreign policy critiques of the day. Without any prompting, he shifted from trade to Russia’s removal from the G8, calling it one of the most consequential mistakes in recent memory.

Standing next to Canada’s Prime Minister, whose predecessor helped lead that push, Trump argued that isolating Moscow may have backfired. “The G7 used to be the G8,” he said, pointing to the moment Russia was kicked out.

He didn’t hold back. “Barack Obama and a person named Trudeau didn’t want to have Russia in, and I would say that was a mistake because I think you wouldn’t have a war right now if you had Russia in.”

This wasn’t just a jab at past leaders. Trump was drawing a direct line from that decision to the war in Ukraine. According to him, expelling Russia took away any real chance at diplomacy before things spiraled.

“They threw Russia out, which I claimed was a very big mistake even though I wasn’t in politics then, I was loud about it.” For Trump, diplomacy doesn’t mean agreement—it means keeping adversaries close enough to negotiate.

“It was a mistake in that you spent so much time talking about Russia, but he’s no longer at the table. It makes life more complicated. You wouldn’t have had the war.”

Then he made it personal. Trump compared two timelines—one with him in office, and one without. “You wouldn’t have a war right now if Trump were president four years ago,” he said. “But it didn’t work out that way.”

Before reporters could even process Trump’s comments on Russia, he shifted gears again—this time turning to Iran.

Asked whether there had been any signs that Tehran wanted to step back from confrontation, Trump didn’t hesitate. “Yeah,” he said. “They’d like to talk.”

The admission was short but revealing. For the first time publicly, Trump confirmed that Iran had signaled interest in easing tensions. But he made it clear they may have waited too long.

“They should have done that before,” he said, referencing a missed 60-day negotiation window. “On the 61st day I said we don’t have a deal.”

Even so, he acknowledged that both sides remain under pressure. “They have to make a deal and it’s painful for both parties but I would say Iran is not winning this war.”

Then came the warning, delivered with unmistakable urgency. “They should talk and they should talk IMMEDIATELY before it’s too late.”

Eventually, the conversation turned back to domestic issues: specifically, immigration and crime.

He confirmed he’s directing ICE to focus its efforts on sanctuary cities, which he accused of protecting violent criminals for political purposes.

He pointed directly at major Democrat-led cities, saying the worst problems are concentrated in deep blue urban centers. “I look at New York, I look at Chicago. I mean you got a really bad governor in Chicago and a bad mayor, but the governor is probably the worst in the country, Pritzker.”

And he didn’t stop there. “I look at how that city has been overrun by criminals and New York and L.A., look at L.A. Those people weren’t from L.A. They weren’t from California most of those people. Many of those people.”

According to Trump, the crime surge isn’t just a local failure—it’s a direct consequence of what he called a border catastrophe under President Biden. “Biden allowed 21 million people to come into our country. Of that, vast numbers of those people were murderers, killers, people from gangs, people from jails. They emptied their jails into the U.S. Most of those people are in the cities.”

“All blue cities. All Democrat-run cities.”

He closed with a vow—one aimed squarely at the ballot box. Trump said he’ll do everything in his power to stop Democrats from using illegal immigration to influence elections.

“They think they’re going to use them to vote. It’s not going to happen.”

Just as the press corps seemed ready for more, Prime Minister Carney stepped in.

The momentum had clearly shifted toward Trump, and Carney recognized it. With a calm smile and hands slightly raised, he moved to wrap things up.

“If you don’t mind, I’m going to exercise my role, if you will, as the G7 Chair,” he said. “Since we have a few more minutes with the president and his team. And then we actually have to start the meeting to address these big issues, so…”

Trump didn’t object. He didn’t have to.

By then, the damage (or the impact) had already been done. He had steered the conversation, dropped one headline after another, and reshaped the narrative before the summit even began.

By the time Carney tried to regain control, it was already too late.

Wherever Trump goes, he doesn’t just attend the event—he becomes the event.

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Business

The CBC is a government-funded giant no one watches

Published on June 17, 2025

By

This article supplied by Troy Media.

Troy Media By Kris Sims

The CBC is draining taxpayer money while Canadians tune out. It’s time to stop funding a media giant that’s become a political pawn

The CBC is a taxpayer-funded failure, and it’s time to pull the plug. Yet during the election campaign, Prime Minister Mark Carney pledged to pump another $150 million into the broadcaster, even as the CBC was covering his campaign. That’s a blatant conflict of interest, and it underlines why government-funded journalism must end.

The CBC even reported on that announcement, running a headline calling itself “underfunded.” Think about that. Imagine being a CBC employee asking Carney questions at a campaign news conference, while knowing that if he wins, your employer gets a bigger cheque. Meanwhile, Conservative Leader Pierre Poilievre has pledged to defund the CBC. The broadcaster is literally covering a story that determines its future funding—and pretending there’s no conflict.

This kind of entanglement isn’t journalism. It’s political theatre. When reporters’ paycheques depend on who wins the election, public trust is shattered.

And the rot goes even deeper. In the Throne Speech, the Carney government vowed to “protect the institutions that bring these cultures and this identity to the world, like CBC/RadioCanada.” Before the election, a federal report recommended nearly doubling the CBC’s annual funding. Former heritage minister Pascale St-Onge said Canada should match the G7 average of $62 per person per year—a move that would balloon the CBC’s budget to $2.5 billion annually. That would nearly double the CBC’s current public funding, which already exceeds $1.2 billion per year.

To put that in perspective, $2.5 billion could cover the annual grocery bill for more than 150,000 Canadian families. But Ottawa wants to shovel more cash at an organization most Canadians don’t even watch.

St-Onge also proposed expanding the CBC’s mandate to “fight disinformation,” suggesting it should play a formal role in “helping the Canadian population understand fact-based information.” The federal government says this is about countering false or misleading information online—so-called “disinformation.” But the Carney platform took it further, pledging to “fully equip” the CBC to combat disinformation so Canadians “have a news source
they know they can trust.”

That raises troubling questions. Will the CBC become an official state fact-checker? Who decides what qualifies as “disinformation”? This isn’t about journalism anymore—it’s about control.

Meanwhile, accountability is nonexistent. Despite years of public backlash over lavish executive compensation, the CBC hasn’t cleaned up its act. Former CEO Catherine Tait earned nearly half a million dollars annually. Her successor, Marie Philippe Bouchard, will rake in up to $562,700. Bonuses were scrapped after criticism—but base salaries were quietly hiked instead. Canadians struggling with inflation and rising costs are footing the bill for bloated executive pay at a broadcaster few of them even watch.

The CBC’s flagship English-language prime-time news show draws just 1.8 per cent of available viewers. That means more than 98 per cent of TV-viewing Canadians are tuning out. The public isn’t buying what the CBC is selling—but they’re being forced to pay for it anyway.

Government-funded journalism is a conflict of interest by design. The CBC is expensive, unpopular, and unaccountable. It doesn’t need more money. It needs to stand on its own—or not at all.

Kris Sims is the Alberta Director for the Canadian Taxpayers Federation

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

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