That's a big question.
First of all, I think the view is well supported by studies done by Professor Mintz at the University of Toronto and others that Canadian tax burdens on corporate activity are relatively high by world standards. Now, that's all the taxes that corporations pay, not just income taxes. For example, one of the most significant disadvantages that Canadian corporations face is the fact that in Ontario and a number of other provinces they have to pay provincial sales tax on their business inputs. This puts them at a material disadvantage to taxpayers in Quebec and in Europe who have a value-added system that doesn't have this drawback.
It's a complex question. It's the total tax burden, not just one.
Our tax breaks are relatively good if you compare only the tax rates with the United States. But our tax rates are high compared to those that apply in Europe, which is a very active and growing part of the world. The U.S. has features to their tax system, including a substantial number of loopholes, that also make it very attractive to investors.
The big issue here is that you have to say that, as the Carter report pointed out 35 years ago, corporations don't pay tax, they pass it on to other people. When you impose a tax on people, the burden of the tax falls on somebody who has to take money out of their pocket and cut back on their consumption of goods and services in order to pay the tax. When you impose a tax on corporations, they either have to reduce their payments to their workers or their payments to their suppliers or increase their prices or reduce their return to investors.
Incidentally, in a global economy it's not very easy to get investors to take a lower return when they have lots of other places to go.
But the main point is that corporations just pass taxes on, and that's the heart of it.