Editor:
I am responding to a letter in the Coast Reporter entitled “Looking for Gross National Happiness” (April 5), which suggested that taxes on corporate profits should be increased while work weeks are reduced to four days thus allowing for greater social satisfaction. Let’s look at this proposal more closely.
High taxes on corporate earnings and high personal tax rates have already persuaded many investors to put their money elsewhere. Foreign investment in Canada was US$ 52.6 B in 2022 versus US$65.6B in 2021, a reduction of 20 per cent. The Canadian federal tax rate on corporate profits of 38 per cent minus the provincial abatement of 10 per cent yields an effective rate of 28 per cent. Ireland had similar rates in the 1960s and was a basket case until it reduced corporate rates to 14 per cent, which stimulated a massive influx of investment. We should consider matching their response and perhaps going so far as to reduce corporate taxes to zero. This would allow corporations to pay much higher wages allowing lost corporate tax revenue to be made up by higher personal taxes while providing these same workers with more disposable income, some of which might be invested in corporations thus gaining investment income for the worker.
Capital investment in Canada has fallen to sixth place per population among the G7 nations for a number of reasons. One of the prime factors is the federal government failing to capitalize on our competitive advantages particularly in natural resources and specifically in oil and gas. Canadian workers were at par with American workers 25 years ago. Our dollar was $1.07 versus the US, it is now $0.73, a 40 per cent haircut. Average yearly earnings of American workers is now US $46,690 versus Canadian workers at US$43,867.
Finally, a comment on excessive spending starting with the size of government. Why do we need 338 Members of Parliament to serve 40 million Canadians while the USA has 435 Members of the House of Representatives to serve 341 million Americans? Why do our MPs warrant a salary increase to $203,000/year plus benefits while many Canadians can’t afford groceries?
Canada is a basket case. Debt is high, productivity is low and a recession is sure to follow. Gross national happiness- not so much!
Gordon Politeski
Sechelt
