Canada Seems To Have All The Answers

By Global Tax Weekly

It has been well documented how Canada was the only one of the major industrialized countries which didn’t suffer a banking crisis. In fact, the British were so impressed at the way things were run there that they head-hunted Canada’s top central banker, Mark Carney, and put him in charge of the Bank of England. While the recession which followed the financial crisis didn’t leave Canada unblemished, and much was spent in stimulating the economy, requiring the federal Government to run a deficit, Canada still managed to cut its corporate tax to the lowest level in the G8. Now it expects to achieve a balanced budget in 2015/16, having recorded a budget surplus in November 2014. There is one worry for the Government though: oil. Canada is a major producer of oil and natural gas, and like any other nation, it likes to take its cut from the companies that extract it from Canadian soil, as do the provincial Governments. Senior figures in the federal Government, including Prime Minister Stephen Harper, have repeatedly taken to the airwaves recently to confirm that the budget will still balance on time despite falling revenues linked to the cheaper price of oil on global markets. But it’s not just the federal Government this affects. At least two provincial Governments have been weighing up new tax increases to offset dwindling oil revenues, the latest being Alberta, which has however said it won’t go ahead with a proposal to increase the provincial corporate tax. For now at least. These are developments worth watching though, and one does fear that the federal Government doth protest too much. With a general election scheduled for October appearing on the horizon, let’s hope it’s not hiding any nasty secrets from its citizens.

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