Jason Kenney has proposed that he will revive the Alberta economy and create jobs by cutting corporate taxes from 12% to 8%. The thinking goes that profitable businesses already located in Alberta will take their larger tax returns and make capital investments or hire more workers. This also assumes that businesses in other provinces will decide to move their operations to a lower tax jurisdiction, increasing the tax and employment base for the province.
In practice, cutting tax rates for profitable corporations doesn’t create jobs. It didn’t work for the BC Liberals when they tried it. And recent experience at the federal level showed that it only made it more likely for corporations to sit on ‘dead money’, as former Bank of Canada Governor Mark Carney put it. Bigger tax returnsRead More »