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
Foreign acquisitions drove a 13.7% increase in assets under foreign control in 2006
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2 comments:
Flaherty has been on a one-man mission to dismantle home grown ownership of our businesses.
He seems to think this is an absolutely smart & incontrovertible solution to what never did ail us.
Allowing this to happen opens this country up to employment pull-back to the country of origin.
It becomes just one more nail in the coffin that holds a large number of Canadian jobs & all those hopes & aspirations that go with them.
You would think his boss the "trained economist" would have seen this coming.
Well .............
Dr Mike Popovich
If Canadians had equal weight in a global economy, then Flaherty's moves would make sense from a theoritical point of view. "Let companies with the mostest go to where they'll be best; blah, blah."
In practical terms, you want a Finance Minister who balances Canadian income out-flows with foreign income in-flows.
Duh? We want more corporate income from away coming into Canada than foreign corporations take out of Canada. Get it?
In fact, Flaherty has gimped Canadian companies investing abroad. Ya, it's the tilted playing field that no one talks about.
Why? Because Harper is promoted-creature of the big oil companies in Calgary. In a nutshell, he's given his Dad's old buds a real swell deal.
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