Saint John, Charlottetown, and Montreal have the highest tax burdens on new business investment amongst major Canadian cities
November 24, 2015 – Saint John, Charlottetown, and Montreal have the highest tax burdens on new business investment amongst major Canadian cities, according to a new C.D. Howe Institute report. In “Business Tax Burdens in Canada’s Major Cities: The 2015 Report Card,” authors Adam Found, Peter Tomlinson and Benjamin Dachis conduct the latest edition of their Business Tax Burden Ranking, that includes business property taxes and land transfer taxes in measuring the tax bite that can drive away or attract new business investment.
“Current government estimates don’t take into account either provincial and municipal business property taxes or land transfer taxes,” remarked Found. “Business property taxes and land transfer taxes represent about two-thirds of the total tax burden on corporate investment in Canada, a large share for governments to continue ignoring.”
Using their more complete measure, the authors find that Saint John, Charlottetown, and Montreal have the highest total tax rates. “Saskatoon now leads the pack of the most investment-friendly climate because of falling property tax costs and because companies in second-place Calgary now face a higher provincial corporate income tax,” according to Dachis.
The report also grades various jurisdictions based on business property tax simplicity and transparency. The authors recommend that the Federal Department of Finance – which provides the provinces with tax burden estimates – include business property taxes in its interprovincial comparison of tax burdens.
Tomlinson concludes: “Despite years of concerted provincial and federal efforts to reduce the tax cost of investment, such as by lowering corporate income taxes, Canadian governments need to address key omissions in their tax burden measure. Our hope is that a more accurate measure of business tax burdens will prompt a closer examination of their potential detrimental impact on business investment.”
Click here for the full report.
The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.
For more information contact: Adam Found, Assistant Professor, Trent University, and a Fellow-in-Residence, C.D. Howe Institute; Peter Tomlinson, Sessional Lecturer, University of Toronto; or Benjamin Dachis, Senior Policy Analyst, C.D. Howe Institute; 416-865-1904, or email: amcbrien@cdhowe.org.