Advance View: Be cautious on big mergers

Burger King and Tim Hortons are merging, making a giant fast food conglomerate poised to take over the world. And media on both sides of the 49th parallel have been making much of the fact that the HQ for this new mega-corporation will be based in Canada, not the United States.

The reason seems to be one of tax savings. Money from international operations that returns to head office will now be taxed at the Canadian rate, rather than the American one. And the Canadian rate has been lower for some years.

In fact, many western countries have a lower corporate tax rate than the U.S. Britain is lower, Italy is lower, even France’s highest corporate tax rate is 33 per cent, below the maximum 39 per cent U.S. rate. Several countries in Europe are actually planning to reduce their rates further in the future.

But those other countries don’t share a border and a long-standing trade pact with the U.S. So if you had to relocate your corporate headquarters, would you choose Canada, or…?

In the short run, this means (mostly) good things for Canada. Bringing corporate headquarters here means more money for our treasury, and at least theoretically more jobs for Canadians.

The threat is that this can easily become a race to the bottom.

Our world is structured so that moving corporations, and goods, and jobs, is relatively easy. But for people, flitting around the world is not so simple.

Canada’s advantages today could be undermined tomorrow, and then it could be France or Japan or South Korea to which corporations flock, leaving us with less tax revenue and abandoning workers who can’t simply uproot and move to another continent.

This has happened before, many times. It’s the same reason car companies started building factories in the American South in the 1970s and ’80s, and it’s the same reason that well over half of everything you can buy today was made in China, Indonesia, or Bangladesh.

We could see a day, in the near future, when we are faced with a choice of cutting taxes again and again, or watching corporations and jobs vanish over the horizon. It won’t be a pleasant choice for Canada, whichever way we jump.

– M.C..

Just Posted

Langley Township mulls new study on 208th Street widening

The cost may be high, warned several councillors.

Abbotsford ‘not in a foreign country,’ judge chastises lawyer

Judge addresses complaint about inconvenience of driving from Vancouver

Walking tours and drumming offer indigenous look at Langley

The Kwantlen First Nation and Fort Langley National Historic Site offer spring events.

CHAMBER WEEK: Langley offers year-round education and networking options

TONIGHT: Lunch, coffee, and dinner meetings tackle issues pertinent to a growing business community.

Surrey branch of youth mentoring program to share in $5 million

Cloverdale-Langley City MP John Aldag announces $5 million in federal funding for youth program

UPDATED WITH VIDEO: Slippery roads didn’t deter runners in the 11th annual Fort Langley marathon

PHOTOS TOO: Most registered runners and walkers came out, despite ice from overnight snowfall.

Gone Country: Gord Bamford, Washboard Union play Surrey benefit concert this summer

Annual party in Cloverdale raises funds for cancer-related causes

Sechelt man pleads guilty to second degree murder of mother

Denise ‘Esme’ Lachance was found dead on Oct. 1, 2014 in Sechelt

Moose creates uber Canadian Olympic moment

A Calgary man shares a truly Canadian moment on Twitter of a Moose enjoying the Olympics

Lower Mainland clinic forced to close after reaching daily patient limit

Maple Ridge one of many cities ailing from shortage of physicians

B.C. drunk driver unknowingly drags snowmobiles along highway

North District RCMP stopped a driver Sunday near Prince George whose two sleds had fallen off a flat deck trailer and were being dragged along behind his truck.

Canada reacts to Cassie Sharpe’s Olympic gold

From Prime Minister Trudeau to Ryan Reynolds, congratulations abound

BCHL Today: Shorthanded scoring binge for Victoria Grizzlies and Krall named POW

BCHL Today is a (near) daily look at whats going on around the league and the junior A world.

Search for missing Okanagan diver ends

Vernon’s Gloria Anne Miller was last seen Thursday, Feb. 15 diving in Puerto Vallarta

Most Read