Changes to Improve Tax Competitiveness Coming Soon
As discussed in a prior blog post, the Canadian government has been considering ways to respond to the competitiveness issue created as a result of tax reform in the United States. Bill Morneau has already ruled out a cut to the corporate tax rate, but has suggested enhancing other tax deductions that relate to investment, such as capital cost allowance and interest deductibility. A recent article by Bloomberg drops a few more hints of what might be in store. Bloomberg spoke with a government official who is familiar with the plans. The official said that the tax changes will be unveiled with the fall economic statement, which is expected in the coming weeks. The official again suggested that no broad reduction to the corporate tax rate should be expected, and commented that changes to capital cost allowance is one of the measures under consideration.