Yes, we at the Confédération des syndicats nationaux, or CSN for short, are of the view that the corporate tax burden is not the only factor that determines a business's capacity to invest or the economy's ability to grow productivity. As Mr. Patry mentioned, we went from a corporate tax rate of 29% in the early 2000s to a rate of 15%—and that isn't the reduced rate.
Although the corporate tax rate is important, we've seen that other factors do come into play. Even before the great recession of 2008-09, it was clear that challenges already existed around accessing sufficient investment in a number of industries, investment required to upgrade plants and provide economic stimulus to developing high-tech sectors.
Against the backdrop of globalization, we nevertheless believe that our corporate tax rate should be competitive internationally, particularly when it comes to the U.S., where the competition is something else altogether. We are keeping a close eye on the tax reform package, but, according to published analyses, the U.S. is moving towards lowering its tax rate and adopting territorial taxation. The Americans are trying to expand their tax base to fund the tax cuts they want to give businesses, whose rate would go from 35% to 20%, depending on what Congress decides. The rate could be higher if Donald Trump succeeds in going ahead with his plan.
Economists are saying that the move would actually hurt U.S. small businesses, who would have to pay more for their exports. The increase in the value of the U.S. dollar is expected to offset that but likely won't be enough to really create a more competitive tax environment.
Furthermore, with the U.S. depriving itself of certain imports, including Canadian imports, it will put upward pressure on U.S. costs because the Americans won't easily be able to build the production capacity they need to fill the resulting void in the medium and long terms, thus driving costs up. What they gain fiscally, they will lose in production and import costs.