A Liberal government in Canada may need to “adjust” its corporate tax rate if the U.S. reduces levies on companies, the party’s leader said today.
Liberal Leader Justin Trudeau, whose party polls show is the biggest threat to Prime Minister Stephen Harper’s Conservatives heading into this year’s election, was asked in a television interview Monday if he would rule out any increase to Canada’s corporate tax rate.
“We always have to stay competitive on the international stage and where we are now is a very good place,” Trudeau told BNN Monday. “We know the Americans are maybe looking at dropping their corporate income tax rates, so we might have to make adjustments.” Trudeau didn’t elaborate.
Reducing corporate tax rates “stimulates growth and investment” in Canada, he said. “We just have to make sure that we’re doing it in a way that is creating opportunity and fairness for everybody in this country.”
Asked for details on Trudeau’s comments, a Liberal spokeswoman said later the party supports maintaining the current corporate tax rate.
“We’re proud of the Liberal record on this. As a result, we are significantly more competitive than the U.S. and our plan calls for the rate to stay where it is,” spokeswoman Kate Purchase said in an e-mail.
American corporate tax rates vary based on income, but in 2014 ranged from 15 percent for small companies to as high as 39 percent, according to the Internal Revenue Service website. The largest companies pay a 35 percent rate on taxable income.
Trudeau spoke earlier in the day to a business audience in Toronto, where he outlined his plan to raise taxes on higher earners to fund a tax cut for middle-income earners.
Canada’s federal corporate income tax rate is 15 percent, down from 21 percent when Prime Minister Stephen Harper and his Conservative party took power, and from 36 percent in 1980.