REPORT: CIBC Warns US Tax Cuts Are Eliminating Canada’s Competitive Advantage

CIBC Capital Markets report says manufacturing could head south, something we’ve already started to see.

A new report by CIBC Capital markets says the tax reform passed by the Trump Administration has eroded the competitive edge Canada once had.

As noted by BNN, “In a report to clients, equity strategist Ian de Verteuil wrote that while much of the focus has been on which Canadian companies could get a boost from the reforms, competitiveness will take a meaningful hit on a number of fronts, including a likely end to so-called tax inversions. “We certainly believe that some Canadian companies with large U.S. operations will now consider moving their domicile to the U.S., were they to make large acquisitions in the U.S.,” de Verteuil wrote.”

Additionally, “Changes to the treatment of capital investment could drive manufacturing south, de Verteuil warned.”

Said de Verteuil, ‘“As part of U.S. tax reform, businesses will be allowed, for tax purposes, to immediately write-off the total investment in equipment… this means that in the first year, the cash outlay for the same piece of equipment in the U.S. could be 20 per cent lower than in Canada,” he wrote. “We still believe that U.S. manufacturers will, on average, have a material tax advantage versus Canadian peers.”’

He pointed out that even though many Canadian companies may not be worse-off than the US, they are now on an “equal footing.” However, that means we have lost the advantage we had when US tax rates were higher. Also, the US has been implementing large-scale de-regulation, while Canada is imposing more regulations and implementing a carbon tax that takes more and more money out of people’s pockets and increases the cost of doing business.

When that increasing regulatory and tax burden is added to the growing uncertainty over projects in the resource sector, and absurd energy costs – particularly in Ontario – Canada is becoming a less and less attractive place to invest.

Spencer Fernando

Photo – Kurtis Garbutt (flickr) cropped

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AL
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The Clown Prince Trudeau will deny this as he does with everything else that doesn’t fit his agenda. After all, Trudeau wants to create a population that is dependent on the government. Then he’s going to anoint himself as Grand Clown Boy and drive Canada further into the ground.

Ben
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Ben

The concern of many Canadians is that lower US taxes will harm the Canadian economy, however, a greater concern is that this situation is playing right into the hands of the Trudeau regime. Many believe the intent is to weaken Canada economically, which leaves the nation vulnerable to more control being implemented, moving the country closer to the ultimate goal of full socialism across the nation. If we watch closely it will be easily seen that Trudeau and Gerald Butts (the real ruler of the country) will make no effort to counter the impending economic down turn!

Canucklen
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Canucklen

Agreed … nor will JT lift a finger to push through the pipeline … we’ll get a bit of lip-service and lots of lies, but he and Butts have no intention of pushing for the pipeline.
Soros is behind this too, along with the Tides Foundation, and the more they can do to crush the Canadian economy the better … and what better place to start than with Alberta, the real engine of the Canadian economy.
Hang on folks, it’s going to get ugly!!
Now, how would everyone like another four years of this drama coach … ???

Valerie
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Valerie

No thanks! He needs to be gone TODAY.

Bruce
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Bruce

And the brain drain goes along with competitive advantage. Think of the implications. #buttsandturdo along with Soros have the pedal to the metal in their quest to erase Canada’s sovereignty, borders and democracy.

Valerie
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Valerie

I’m so glad that so many people understand that the destruction of the Canadian economy is INTENTIONAL. We need to get rid of those responsible if we want this country to survive.

John
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John

Trudeau is a dictator in the First Degree! He is destroying what used to be a FREE country! Many thousands of Canadian men & women fought for Canada & other Countries’ FREEDOM. NOW Trudeau is destroying everything our brave soldiers lost their lives for. If we don’t do the research & find out the truth then we won’t be able to pay our taxes & the government will end up owning our homes. We can share this website with many others who have been blind sighted by Trudeau, George Soros & their cronies.