Boudreau must eliminate capital taxes for all businesses by '09

From the National Post, Monday, December 17th:

On Thursday, Ontario offered encouraging news by eliminating the capital tax for the manufacturing and resource sectors, starting Jan. 1, 2008, and pledged to eliminate capital taxes for all businesses by 2010. We hope the province follows through. The service industry is the sector that will spur future growth in Canada's post-industrial economy, and it should not be weighed down in coming years with the current high level of taxes.

In its annual tax-competitiveness survey, the C.D. Howe Institute reports that the tax load on Canada's service industries "including construction, transportation, communications, public utilities, trade, business and household services, remains the sixth-highest in the world." These companies pay an effective rate of 36.4%, while the average was just over 32% among the 80 countries examined in the C.D. Howe report.

While the tide against capital taxes is becoming stronger -- Ottawa and Alberta have wisely eliminated them, and Ontario and Quebec have plans to do the same -- B.C., Saskatchewan, Manitoba, New Brunswick, Nova Scotia, Newfoundland and P.E.I. continue to maintain capital taxes on companies that employ hundreds of thousands of Canadians.

Mr. Flaherty's mini-budget in October showed that cutting corporate taxes can be done. Rather than lobby for corporate welfare from Ottawa, provincial finance ministers would do better to cut their own corporate taxes in order to give our businesses the level playing field they need to compete in a global economy.

To be sure, the 2007-08 fiscal year will be remembered as a tough time in New Brunswick, a time when the province raked in $79-million in revenues -- $42 million more than originally anticipated --- on the backs of both business and personal taxpayers. It's time for some relief, Mr. Boudreau.