Alberta Politics & Government Thread 3.0

[Fuzz]

Originally Posted by Cowboy89

Most Canadian companies do not have major business lines outside of Canada. Some of Alberta's largest companies do. it's a real threat and 'lowest in Canada' is not competitive with the jurisdictions we want to compete with in a business sense.

My point was businesses make decisions based on all sorts of factors. Saying we are at risk of losing companies becuase we change the tax percent form one arbitrary number to another doesn't hold a lot of sway. It's just far to simplistic to suggest that. Is it a factor? Of course. But so are many other things.


So can you provide any other examples of this happening when a provincial government raised taxes in the past 20 years?

[Cowboy89]

Originally Posted by Ozy_Flame

How did they survive during the years prior and up to that of 12%?

The company's asset bases were more Alberta and Canada focused at the time and moving head offices to the US wouldn't have made any sense because they didn't have large US businesses then. Since that time period Enbridge and TC in particular have expanded by buying large companies and assets in the US that in of themselves rival their Canadian businesses since many of their Canadian growth projects were killed by our inability to build pipelines. Now CP has made a major acquisition of KC Southern. Any more acquisitions by CPKC there and they could be more US based than Canadian. To keep our big businesses we need to view their economic impact more holistically than simply as a cow to milk for more funds because they are not entirely captive in Alberta. These companies wouldn't be moving to BC or Ontario, they would be moving out of the country so again, being lowest in an uncompetitive country such as Canada isn't the point.

[Fuzz]

Originally Posted by Cowboy89

The company's asset bases were more Alberta and Canada focused at the time and moving head offices to the US wouldn't have made any sense because they didn't have large US businesses then. Since that time period Enbridge and TC in particular have expanded by buying large companies and assets in the US that in of themselves rival their Canadian businesses since many of their Canadian growth projects were killed by our inability to build pipelines. Now CP has made a major acquisition of KC Southern. Any more acquisitions by CPKC there and they could be more US based than Canadian. To keep our big businesses we need to view their economic impact more holistically than simply as a cow to milk for more funds because they are not entirely captive in Alberta. These companies wouldn't be moving to BC or Ontario, they would be moving out of the country so again, being lowest in an uncompetitive country such as Canada isn't the point.

Easy solution, a corporate exit tax = 200% of what they paid in total taxes over the past 30 years.

[Cowboy89]

Originally Posted by Fuzz

My point was businesses make decisions based on all sorts of factors. Saying we are at risk of losing companies because we change the tax percent form one arbitrary number to another doesn't hold a lot of sway. It's just far to simplistic to suggest that. Is it a factor? Of course. But so are many other things.


So can you provide any other examples of this happening when a provincial government raised taxes in the past 20 years?

I pointed out many other factors. Once companies have enough business elsewhere, the number charged for corporate tax becomes important to where they domicile. Alberta in particular is more at risk of this than say BC, Ontario or Quebec where many of their companies do not have as much international business interests and actually benefit more from being in Canada due to protective federal regulations than they get soaked in corporate taxes (Telco's, Banks, etc.)

[Cowboy89]

Originally Posted by Fuzz

Easy solution, a corporate exit tax = 200% of what they paid in total taxes over the past 30 years.

Ok, then a lot of new companies would avoid forming here in the first place moving forward after such a policy, which wouldn't be a good idea to implement.

[Ozy_Flame]

Originally Posted by Flames0910

Slashing them to 8% was the original bad policy so let's not let the UCP off the hook for Kenney's "failed experiment" in corporate welfare either.

Not to mention slashing the corporate tax didn't equate to hiring more people. Many O/G companies used the downturn to switch to things like machine learning, robotic process automation and automated systems; many used the time to beef up ERP systems like SAP S/4HANA, Oracle NetSuite, and Dynamics 365. They also gave more profits back to shareholders.

Then we saw O/G companies pulling profits and not really re-investing them back into the Alberta economy as one would expect. Here's an article about it last year:

CBC: Oil industry booming, but profits aren't staying in Alberta like they used to

It's even debateable if the Job Creation tax cut actually created more jobs at all.

One thing I get frustrated with proponents about "job creation" tax cuts is that reality isn't a textbook from 1994. "Jobs" in the classical sense are no longer the spending priority when companies have extra corporate capital, unless the corporation is actively looking to give people jobs, which is hardly the mantra of a competitive organization. Shareholders and operational efficiency are usually prioritized first.

[Flames0910]

Originally Posted by Cowboy89

8% vs. 12% was more about keeping what we have than filling the office towers. The companies I identified and more could be at risk of leaving if we're not competitive.

No, I'm sorry. This is simply not true. You might honestly remember it differently, but this is revisionist history -- Kenney himself repeatedly argued it would create 55,000 jobs and grow the economy by $13B. In fact, he called it the centre piece of his platform and specifically called this out as new business investment.

Five seconds of googling found me three articles from three different publications with Kenney himself saying these things and slapping back at anyone who disagreed (notably Nenshi and Trevor Tombe but I also remember many folks on this forum arguing against it):

United Conservative Leader Jason Kenney called the announcement “the centre piece of our job creation strategy designed to get Alberta back to work.”

The new premier argues the corporate tax cut would grow the Alberta economy and create 55,000 jobs.

But lowering the rate even sooner would give Alberta, “by far, the most attractive environment for new business investment in Canada and amongst the lowest rates in all of North America,” Kenney said.

Kenney said. "And we need to get that advantage back in order to see investment and new companies locating back in Alberta.

Unfortunately, it didn't do any of this. The only things this policy did were reduce government revenue and pad annual reports for already profitable corporations. You can't move the goal post now and say "well we didn't lose companies that would have moved" when Kenney himself said the goal was to spur new investment.

Given that didn't happen, I don't see how slashing corporate taxes can be viewed as anything but another UCP failure (and an expensive one at that). Good for business owners like Murray Edwards but no help to regular Albertans.

https://www.reddeeradvocate.com/news...ation-tax-cut/
https://www.cbc.ca/news/canada/calga...nshi-1.5134438
https://calgaryherald.com/news/local...ic-reboot-plan


Edit: Let's see what Notley said at the time. Oh ya, she called it reckless and said the revenue could have been used to fund two major hospitals or 224 new elementary schools. If we'd started on those projects four years ago we might have been in a better spot with shovels in the ground and projects coming to completion to help the current healthcare crisis.

https://www.cbc.ca/news/canada/calga...tion-1.5081413
https://edmontonjournal.com/news/pol...-rachel-notley

[Torture]

Originally Posted by Cowboy89

Most Canadian companies do not have major business lines outside of Canada. Some of Alberta's largest companies do. it's a real threat and 'lowest in Canada' is not competitive with the jurisdictions we want to compete with in a business sense.

Companies aren't going to do large scale operational and human capital restructuring just to save a few % in corporate taxes, particularly when they were paying more just 4 years ago, give me a break. Do you have any idea how much the restructuring cost would be for the examples you gave to pick up and move their corporate head offices from Calgary?

[Looch City]

Sounds like we should just abolish corporate taxes?

[Yoho]

https://twitter.com/user/status/1658809029336997891

What you resort to when things aren’t going well.

[Fuzz]

I would think we'd have good data to narrow down what the right number is. We have had it dropping from 11 down to 8, so at what point were dollars maximized? Was it 11, or 8, or somewhere in between?

[Looch City]

Originally Posted by Yoho

https://twitter.com/user/status/1658809029336997891

What you resort to when things aren’t going well.

Hahahahahahaha the resort of....using Smith's own words?

Hahahahahhahahahahaaaaaaaaaaaaaaaaaaa

What a [mod edit: swear filters are there for a reason people] joke you all are.

[belsarius]

Originally Posted by Looch City

Sounds like we should just abolish corporate taxes?

Now you're getting it. You have passed Preston Manning's Economics 101.

[Cowboy89]

3 points on ENB's Net Earnings is ~$60 million. Probably pays for itself in a few years. Especially if that's where your business is headed because the government has put expanding your business in the crosshairs

[MoneyGuy]

Originally Posted by undercoverbrother

I guess a large number of Albertans are stupid as ####

Perhaps the stupidest people in Canada.

[kermitology]

If the current state of the Canadian business environment is untenable at 8% why are there even any companies in Alberta at all?

[kermitology]

Originally Posted by MoneyGuy

Perhaps the stupidest people in Canada.

Not stupid per se, but closed-minded. I've never seen a population that is so headstrong about ####ing their own future because they can't see past the now.

[BlackArcher101]

So from what I understand, we should keep the business tax rate stupid low and give up more revenue in order to keep a smaller piece of revenue (ie enbridge)?

And if we raise the rates and get much more revenue, that's bad because we actually won't get as much (still more, but not as much), because we are afraid a few companies may leave.

Either option would still net more revenue correct?

Honestly, sounds like if a companies majority dealings are in the USA, it's sadly only time, not the tax rate that will eventually make them move. Just like all the previous companies that have already.

[Cowboy89]

Originally Posted by BlackArcher101

So from what I understand, we should keep the business tax rate stupid low and give up more revenue in order to keep a smaller piece of revenue (ie enbridge)?

And if we raise the rates and get much more revenue, that's bad because we actually won't get as much (still more, but not as much), because we are afraid a few companies may leave.

Either option would still net more revenue correct?

It's not stupid low. It's lowest in Canada, but in the context of North America, 8% wouldn't be considered low if you included all US States. It's also not one dimensional, if a few large companies leave it's probably thousands of the provinces highest paying jobs and all the ancillary revenue that comes from that. It's not just about amount of revenue from one source. My point is this isn't a slam dunk simple logic argument that corporate tax increase = better for Alberta as a whole.

[Torture]

Originally Posted by kermitology

If the current state of the Canadian business environment is untenable at 8% why are there even any companies in Alberta at all?

Nevermind Alberta, why do ANY companies locate themselves in Canada??