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3 months ago

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Today is the day BC! Make sure you get out and vote!! If you're still undecided, read where each party stands on the issues that matter to you. #BCelection2020 ...

2020 British Columbia

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I CAN Party is a user-friendly guide to understanding the national political party platforms. It provides short summaries of the parties’ stances on key electoral issues without analysis or party rhetoric.
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Our #BCelection platform is live!! Check out it out and see which party matches you best. Don't forget to #vote tomorrow!!

www.icanparty.ca/en/2020-british-columbia/
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2020 British Columbia

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I CAN Party is a user-friendly guide to understanding the national political party platforms. It provides short summaries of the parties’ stances on key electoral issues without analysis or party rhetoric.
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Still undecided on who to vote for in the #BCElection? Find out where the parties stand on healthcare here. ...

BC 2020 Blog: Healthcare

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I CAN Party is a user-friendly guide to understanding the national political party platforms. It provides short summaries of the parties’ stances on key electoral issues without analysis or party rhetoric.
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Is housing an election issue for you? Here's what each party is proposing. #BCElection2020 ...

BC 2020: Housing

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I CAN Party is a user-friendly guide to understanding the national political party platforms. It provides short summaries of the parties’ stances on key electoral issues without analysis or party rhetoric.
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Housing is a big issue in the #BCElection. Here's our breakdown of what each party is proposing. ...

BC Election 2020: Affordable Housing

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I CAN Party is a user-friendly guide to understanding the national political party platforms. It provides short summaries of the parties’ stances on key electoral issues without analysis or party rhetoric.
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Corporate Tax

Updated on September 30, 2015

The federal net corporate tax rate is currently 15%. For small businesses, this figure is 11%. However, businesses are also subject to provincial taxation, so their total tax rate will be higher. Canada’s average combined federal-provincial tax rate is currently 26.3%. By comparison, the average corporate tax rate for G7 countries is 29.9% and in the United States it is 39% (but the U.S. has a complex system of tax deductions which effectively reduces overall corporate tax rate). Those in favour of lowering corporate tax rates argue that high taxation harms economic growth. They point out that a reduction in corporate tax rates does not always lead to a significant reduction in government revenues from corporate taxes. As taxes decrease, companies are more likely to invest and expand, potentially leading to more taxable profits and higher tax revenues by government. Reducing corporate tax rates also provides incentives for multinational firms to shift taxable activities into countries with lower tax rates. By contrast, increasing corporate tax levels would initially increase government income, but this may be short-lived as corporations alter their spending habits and investment in the long-run to avoid taxation. Those in favour of raising corporate tax rates argue that there is no definitive proof that higher taxes harms economic growth, and could in fact help spur growth through increased government spending and investment. They also argue that corporations gain benefits from government spending such as better infrastructure, healthier workers, and better human capital from education and social programs, so corporations should be expected to contribute to these. There is debate as to the extent and ability of some high-income professionals to reduce the amount of income tax they pay by abusing the lower corporate tax rate for small businesses . They can do this by shifting their income into a Canadian Controlled Private Corporation (CCPC) that qualifies as a small business, and then giving their revenue as dividends to lower-income family members—all while taking advantage of other benefits to reduce their tax burden. Economist Jack Mintz has estimated that 60% of the small business deduction goes to households with incomes of more than $150,000, while economist Michael Wolfson has estimated that 5-10% of small businesses act as tax shelters (a means of avoiding taxes), and that the government loses around a half billion dollars per year due to this. However, these estimates are difficult to prove and small business associations have argued that this is the exception to the rule. Moreover, they argue that small businesses should be given greater tax benefits as they face higher wages, tax, and other costs relative to larger corporations.

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  • Reduced the corporate tax rate to 15% from 22% in 2006 (1, 2)

  • Has legislated a reduction in the small business tax rate from 11% to 9% by 2019 (2)

  • Has steadily reduced subsidies to oil and gas industries and will eventually phase them out (4)

  • Has legislated a reduction in payroll taxes (money businesses and employees contribute to the Employment Insurance program) from a tax of $1.88 per $100 earned to $1.49 per $100 earned by 2017 (7, 8)

  • Pledges to extend the Northern Mining Exploration Tax Credit, which gives a 15% tax credit for those who invest in mineral exploration in Northern communities, by another three years (3, 4, 5, 6)

  • Pledges to provide an enhanced credit  of 25% of a company’s corporate tax to subsidize proposed mining projects that face steep overhead costs due to remote locations or distance from transportation routes (such as the Ring of Fire in Ontario and Plan Nord in Quebec) (4, 5, 6)


  • Pledges to impose a "slight and graduated increase in corporate taxes" that would remain below the average that the Conservatives have had in place for 10 years (17.5%) (9, 13)

  • Promises to reduce the small business tax rate from 11% to 9% (2, 11, 13)

  • Believes the small business tax credit should be “tweaked” to ensure that it cannot be used as a tax dodge by wealthy individuals (12)

  • Will immediately end all subsidies to the oil and gas industries and shift the tax breaks to clean and renewable energy projects (14, 16, 17)

  • Pledges to create a new Innovation Tax Credit and offer targeted tax breaks to manufacturers and businesses that invest in machinery, equipment, and property to promote innovation and increase productivity (10, 11, 13)

  • Promises to extend the accelerated capital cost allowance for machinery and equipment by two years (13)

  • Opposes extending the Northern Mining Exploration Tax Credit (4)


  • Pledges to keep corporate tax rate the same (15)

  • Promises to reduce the small business tax rate from 11% to 9% (2, 13)

  • Believes the small business tax credit must be significantly changed to ensure that it cannot be used as a tax shelter by wealthy individuals (12, 15)

  • Pledges to reduce payroll taxes (where money businesses and employees contribute to the Employment Insurance program) from a tax of $1.88 per $100 to $1.65 per $100 earned (7)

  • Will end all subsidies to oil and gas industries and invest $200 million per year into clean and renewable energy projects (14)

  • Opposes extending the Northern Mining Exploration Tax Credit (4)



  • Pledges to return corporate taxation to 2009 levels, 19% (2, 18, 20, 21)

  • Promises to reduce the small business tax rate from 11% to 9% (2, 20, 21)

  • Believes the small business tax credit should be changed to ensure that it cannot be used as a tax dodge by wealthy individuals (19)

  • Will end all subsidies to oil and gas industries and create $1 billion per year in technology commercialization grants for entrepreneurs to accelerate emerging technologies (19)

  • Promises to create a carbon-fee-and-dividend that taxes polluting industries and returns all funds to Canadian citizens above the age of 18 (13, 18, 19)

  • Will work with provinces to increase taxes on alcohol and tobacco (2, 21)

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References

  1. The Toronto Star
  2. National Post
  3. The Toronto Star
  4. CBC
  5. CBC
  6. Conservative Website
  7. The Winnipeg Free Press
  8. The Toronto Star
  9. Macleans
  10. The Star Pheonix
  11. NDP Website
  12. The Toronto Sun
  13. The Toronto Star
  14. CBC
  15. CBC
  16. NDP Website
  17. Macleans
  18. The Globe and Mail
  19. CBC
  20. Green Party Website
  21. Green Party Website

Further Reading

  • Macleans on Corporate Taxation
  • Forbes on Why Tax Cuts for Corporations Increase Government Revenue
  • Business Insider on why Tax Cuts for Coprorations Undermine Growth
  • Macleans on Small Buisnesses Being Used to Avoid Taxation
  • Global News on Small Buisnesses Being Used to Avoid Taxation
  • School of Public Policy at the University of Calgary, “Small Business Taxtion” Duanjie Chen and Jack Mintz
  • “Piercing the Veil – Private Corporations and the Income of the Affluent,” Michael Wolfson, Mike Veall, Neil Brooks
  • Huffington Post on Small Buisnesses Being Used to Avoid Taxation
  • Financial Post on Small Buisness Taxation
Posted in The Economy and Environment | Tagged fed2015
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I CAN Party is created and maintained by a team of interested citizens and does not have ties to any political parties. Research is conducted by our team of contributors, and though we strive at all times to provide the most accurate information possible, our website may contain inaccuracies. The site has received donations from individuals, who do so on the condition of having no editorial oversight, but does not receive any formal funding or investment. Copyright 2019 I CAN Party.

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