Canadian Bankers Association

Canadian Bankers Association

September 26, 2007 08:15 ET

Regulatory Efficiency and Tax Competitiveness Vital to Canadian Businesses and Canada's Prosperity

TORONTO, ONTARIO--(Marketwire - Sept. 26, 2007) –

Attention Business Editors:

A competitive tax and efficient regulatory environment are key to helping businesses from Bay Street to Main Street compete in today's global economy and to ensure the long-term prosperity of Canadians. That is the message that Nancy Hughes Anthony, president and chief executive officer of the Canadian Bankers Association (CBA), delivered this morning in a speech to the Economic Club of Toronto.

In her speech, entitled "The Intersection of Main and Bay: Driving Canada's Competitive Advantage", Ms. Hughes Anthony said that Canadian businesses would be better equipped to compete with increased regulatory efficiency. She highlighted securities regulation as a prime example, noting that a move to a common regulator would benefit businesses both large and small. She pointed to CBA research that found this move would lower the cost of capital for small- and medium-sized firms, reduce their fees and improve their access to investors throughout the country. In fact, the time may be approaching for the federal government to take further action to bring about needed reform.

"It is quite unfortunate that some provinces are not willing to give up their local fiefdoms for the benefit of Canadian entrepreneurs and for the economy of Canada as a whole," Ms. Hughes Anthony said. "Minister Flaherty has shown leadership on this issue - he has endeavoured to work with the provinces on common solutions and he has agreed to form an expert panel to advise on possible approaches. All good steps, but the time may be coming when more concerted action is necessary, and we would fully support him if he took the steps necessary to put in place a single securities regulator."

In addition, changing Canada's corporate tax policy is the single most effective step Canada can take to heighten its competitive advantage since a country's tax regime can be a key factor in encouraging investment.

Canada ranks 16th in the World Economic Forum's global competitiveness index, behind the largest of the G-7 countries and also rates poorly in terms of tax rates and regulations. Moreover, the C.D. Howe Institute's 2007 Tax Competitiveness Report noted that Canada has the 11th highest effective tax rate on capital among 80 industrialized and leading developing countries.

"We all know that global competition reaches into every community in Canada. This means that if we as a country are to give our businesses a competitive tax edge, then all levels of government in Canada need to participate and contribute to achieving this goal," said Ms. Hughes Anthony.

The CBA is recommending that the scheduled reductions in the federal corporate income tax rate should be accelerated and then reduced even further to 16.5 per cent by 2012. Relief in personal income tax, particularly in the lowest income tax bracket, will also help attract and retain a viable labour force and encourage a strong work ethic through economic rewards.

Ms. Hughes Anthony said there are several upcoming opportunities for the federal government to increase Canada's competitiveness, including the Speech from the Throne, the economic and fiscal update, and the panels reviewing tax fairness, a common securities regulator and competitiveness.

She outlined the benefits for Canada to become one of the world's most competitive jurisdictions: "It means creating quality jobs, attracting investment and talent, encouraging innovation, and building a strong tax base than can support the social programs we hold dear. It means opportunity for all. Canada's advantage is not simply an advantage for business, but for all Canadians."

The Canadian Bankers Association works on behalf of 54 domestic chartered banks, foreign bank subsidiaries and foreign bank branches operating in Canada and their 249,000 employees to advocate for efficient and effective public policies governing banks and to promote an understanding of the banking industry and its importance to Canadians and the Canadian economy.

The full text of Ms. Hughes Anthony's remarks is available at

Contact Information

  • Canadian Bankers Association
    Melanie Minos
    (416) 362-6093, ext. 220, Cell: (416) 587-7733