OTTAWA — Business associations are warning that substantial tax changes in the U.S. could end up inflicting more damage on the Canadian economy than the possible termination of the North American Free Trade Agreement.
Two of the country’s biggest business lobby groups say much of their attention these days is focused on the negatives of the recent U.S. decision to slash corporate taxes to levels comparable to those in Canada.
The warning follows on the heels of the Bank of Canada’s first public estimate on the impact of the U.S. tax changes on the economy north of the border.
The bank predicts NAFTA uncertainty and the tax reforms will encourage firms to divert more of their planned investments from Canada to the U.S., trimming half a percentage point off Canadian investment by the end of next year.
Business Council of Canada president John Manley says he believes the fallout from the U.S. tax changes on the Canadian economy could be even bigger than the negatives associated with the potential demise of the NAFTA.
Canadian Chamber of Commerce president Perrin Beatty says the U.S. tax reforms should be a wake-up call to spur Canada into finding ways to make the country more attractive for both domestic and foreign investors.
The Canadian Press