|Canada Schools U.S. on Growing the Economy
Washington doesn’t have to look far to find a model for spurring America’s struggling economy: Canada.
“The Obama administration and its economic czars have flailed about for years, baffled about how to get the U.S. economy growing,” Investor’s Business Daily (IBD) observes.
“In reality, the president need look no further than our neighbor, Canada, whose solid growth is the product of tax cuts, fiscal discipline, free trade, and energy development. That's made Canada a roaring puma nation, while its supposedly more powerful southern neighbor stands on the outside looking in.”
Canadian Prime Minister Stephen Harper recently slashed corporate taxes again in the final stage of his Economic Action Plan, lowering the federal business tax burden to just 15 percent. The top U.S. corporate tax rate is 35 percent.
Considering new tax cuts in the provinces, total taxes for businesses in Canada will drop to 25 percent, one of the lowest in the G7 group of developed countries.
In the United States, "when additional state rates are added, the average tax rate for U.S. corporations rises to 39.2 percent, the second highest in the developed world, only slightly behind Japan's," according to the Tax Foundation.
Harper has also made signing free trade treaties a priority. Canada now has 11 free trade pacts in force, and 14 under active negotiation — including pacts with the European Union and India.
And unlike the U.S., Canada has encouraged domestic energy production by enacting market-friendly regulations. Canada is moving ahead with the Keystone Pipeline, and urging President Obama to move forward on it or risk Canada selling its oil to China.
For Canada, government policies have brought big benefits. Incomes are rising, unemployment is two percentage points below the U.S. rate, Canadian currency is strengthening, and the country boasts Triple-A or equivalent credit ratings across the board from the five top international ratings agencies.
“Is it too much to ask Washington to start paying attention to the Canadian success story?” IBD observes.
“These sound principles work every time they are tried, and they have led to a transformation in Canada. Imagine what they could do in the U.S.”