Two myths seem to abound regarding corporate tax hikes and cuts that surprise me. I guess the level of fear mongering regarding these issues just blows me away.
Myth number 1
If you do not cut taxes businesses will not move to our province.
What most politicians fail to tell you is it does not matter to an existing business if you cut taxes or not. Unless they are paying an exorbitant tax rate in comparison to what we offer, they are not moving.
The reason is simple. You need to take into account the expense of moving a company, buying new property, building new factory, getting new equipment, etc. The added expense of shipping material here as well as shipping product from here further complicate matters. So unless a company does not have a physical location or is looking to open a new location it is highly unlikely to move as it is simply not cost efficient.
Myth number 2
If you raise taxes businesses will leave this province.
The problem here is close to the same. A company would have to shut down existing facilities, ship materials from here as well as purchase new property and build a new factory (both of which cost far more money in western provinces then it does here )
The reality is we need to look not at existing companies but at new corporations just setting up for the first time. We need to convince entrepreneurs from here that they should set up here and attract new entrepreneurs from elsewhere. There is no percentage in poaching companies from other jurisdictions because you will basically have to pay for their new facilities to make it worth their while.
Our present tax rates are not the real issue to job creation regardless what the Con/Lib conspiracy theorists will try to say to you. The real issue is creating a good solid workforce that is capable of producing the product and offering as good a value for services as other provinces can offer.