Jason Kenney’s corporate tax cuts would ‘pay for themselves.’ That optimistic messaging echoes the failed fiscal policies introduced by Former Prime Minister Stephen Harper.
Alberta’s business tax rate stands at 12 per cent of corporate income. Kenney would slash it by a third, to just eight per cent, over a four-year period.
The revenues lost soon would be made up, through increased economic activity, Jason Kenney declared.
15% corporate tax cut led to 11000 jobs cut for Canadians
Harper came to office in 2006, over the period of five years there were five federal corporate tax cuts for the big corporation with the last 1.5% tax reduction taking effect on 30 December 2011, an expansion of $6 billion in corporate tax cuts, bringing the federal corporate tax to 15 percent.
Consequently, by the end of 2011, the corporates are saving up their corporate surpluses or dead money as former Bank of Canada governor Mark Carney called them. And the cut didn’t pay for itself, the Canadians households paid for it.
11000 jobs were cut within eleven months in 2012. In November 2012, Stephen Harper’s Treasury Board president Tony Clement stated that the federal government had cut 10,980 public service jobs, This include health care cuts.
Here are few of the Harper’s job cuts we were able to track:
|Departments Affected||Jobs cut|
|3||Library and Archives Canada||105|
|5||Aboriginal Affairs and Northern Development Canada||490|
|6||Human Resources and Skills Development Canada||908|
|7||Department of defence||1149|
|8||Human Resources and Skills Development Canada||908|
|9||Institute of the Public Service of Canada||1500|
|11||Agriculture & Agri food||5561|
Corporate tax cuts are supposed to boost the economy by stimulating investment, but corporate tax cuts in Canada over the past 20 years have failed to do that.
As households have gone into ever higher debt, Canadian corporations have built up surpluses that now amount to over $500 billion, equivalent to over $15,000 per Canadian.
Economist Hugh Mackenzie estimates that the net impact of the UCP plan would be to reduce Alberta’s GDP by 2.5 per cent over four years. These estimates are more consistent with figures published by Finance Canada and by Statistics Canada.
The large corporate tax cuts Kenney embarks on would have very small positive economic impacts, if any at all and a large share of these billions in tax cuts would flow out of Alberta to the foreign owners of the province’s large resource companies, at the great expense of ordinary Albertans; Albertans will pay for it.