Corporate tax cuts make no contribution to economic recovery — Mackenzie

Hugh Mackenzie, an economist with the Canadian Centre for Policy Alternatives, says in today’s Toronto Star that the current deficit hysteria is no excuse for the Harper government to end economic stimulus. In fact, Mackenzie argues, most of our stimulus has yet to flow from the Federal government, placing Canada well behind the response of other countries. Both the International Monetary Fund and the World Bank have pointed out that governments that pull their stimulus too early may cause another recessionary dip – sentiments Ontario Finance Minister Dwight Duncan has echoed publicly. MacKenzie takes a shot at one policy the McGuinty and Harper governments are committed to: “Corporate tax cuts don’t make sense.” he writes. “They put Canada out front in a race to the bottom in North America that we shouldn’t be in. They make no contribution to the recovery of businesses hurt by the recession – and not making any profit anyway – while delivering savings to industries that don’t need the help.” Duncan has already announced Ontario is giving away $4.5 billion in corporate tax cuts. Mackenzie says this week’s federal budget should put the emphasis on investments that will pay off for Canada’s economy in the long run, including addressing the health system challenges of an aging population.