Foreign acquisitions of Canadian-controlled firms, particularly in mining, manufacturing, retail and accommodation and food services industries, drove the 13.7% increase in assets under foreign control in 2006, the fastest rate of growth since 1999. Canadian assets under Canadian control rose 8.2%, according to the Statscan study entitled “Foreign control in the Canadian economy”, available here
This trend in the foreign acquisition of Canadian companies was enhanced by Flaherty’s elimination of withholding tax on short-term and related party debt. Why are foreign holders of Canadian assets given tools to structure ownership in a way that reduces/eliminates corporate tax and Canadian citizens are prohibited from using the same tools? Perhaps Jack Layton or Thomas Mulciar could answer that question, as the NDP used to stand for Canadian nationalism as opposed to tax induced foreign takeovers, and tax policies supported by the NDP which place Canadian investors at a distinct disadvantage to foreigners.
To see the effect of Flaherty’s trust tax on foreign takeovers, Click here
To see the net effect of Flaherty’s trust tax on government tax revenues Click here
Tuesday, March 3, 2009
Posted by Fillibluster at 9:47 AM