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Competing for global talent

   

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Lorn Kutner, a Tax partner with Deloitte Canada, articulates the firm’s vision for a personal tax system that is more globally competitive: “This would help Canada attract the innovative, educated and entrepreneurial individuals who will drive Canada’s economic growth in the future.”
Tags : personal taxes, taxation, T1, marginal tax rate, entrepreneurs, human capital, human resources, talent, competitiveness, the future of tax, Canada, Deloitte

Canada’s competitiveness is closely tied to individuals with the vision, drive and qualifications to contribute to the growth of new industries. Globalization is driving international mobility among these entrepreneurial, productive and innovative people. We need to ensure that our personal tax system attracts those who can contribute the most to our economy. Therefore, we support:

  • An increase to the threshold at which the top rate of personal tax begins
  • A reduction of the top rate of personal tax

Phasing in these measures over several years can drive behavour from the start, as was seen with reductions to corporate tax rates.

In consideration of Canada’s overall tax base, we note that the goods and services tax (GST) rate is low when compared to value-added taxes in other countries. With this in mind, we believe that the appropriate way to increase government revenue is through a consumption tax, while stimulating growth through reduced corporate and personal tax rates.

Coupled with a globally competitive personal tax system, Canada requires a plan aimed at increasing immigration to fill gaps in the Canadian workforce and to support a sound knowledge base. Increased immigration of highly productive and innovative people will not only increase the competitiveness of Canadian enterprises, but will also enhance government tax revenues. Personal taxation accounts for almost half of government revenues — a larger population of well paid, skilled individuals will contribute to an increase in the overall amount of personal taxes collected, even with recommended personal tax rate reductions. Therefore, we support the development of an immigration vision with a long-term perspective:

  • The federal skilled worker program should be refined to target desired immigrants — appropriate attention must be given to all sectors including blue collar workers who build Canada’s infrastructure
  • The federal government could also encourage provinces to seek these same immigrants in a way that complements the federal skilled worker program

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