Canada is not as tax competitive as the Carney government claims (The Hub)

Listening to some commentators examining the fallout of the 2025 Budget, I am increasingly concerned that Finance Canada’s estimates of corporate tax competitiveness are being swallowed hook, line, and sinker without understanding the limitations of the analysis. The budget claims:

    The productivity super-deduction will reduce Canada’s [marginal effective tax rate (METR)] by more than two percentage points, strengthening our competitiveness with the U.S. following measures implemented in the One Big Beautiful Bill Act (OBBBA). Moreover, Canada will have the lowest METR in the G7 and below the OECD average. This means that businesses can invest and scale more easily and that Canada will remain an attractive destination for investment.

As I explain below, we are not as “tax competitive” as we think ...

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