Canadian Corporate Tax Rates Slide to 25% Floor
Canadian Finance Minister Jim Flaherty says unemployment will rise through 2010 despite some growth in the economy after meeting with the finance ministers of other nations.
Even though the economy is in the process of stabilizing, he and his fellow colleagues expect a continued increase in unemployment, as the labour markets have not improved and they are concerned about the effect on workers.
"We'll start to see stabilization, which we are seeing now, and then a return to economic growth but continuing deterioration in employment," he said.
"We can expect that to happen into 2010, but we're optimistic we will then see the unemployment numbers start to improve."
U.S. payrolls fell in June by 467,000, far more than was expected. Growth was predicted to resume by the fourth quarter but now some think that it may not happen so quickly.
Canadian economists expect Statistics Canada to report another 30,000 jobs to have been lost in June 363,000 jobs have been lost in Canada since October 2008.
Flaherty has in the past warned Canadians that times may continue to be tough however he is also confident that our recovery would be swift and strong, leading most of the industrialized countries.
Recently he has been more conservative in his estimates though, concurring with other finance ministers that recovery will be slow.
"The anticipation is that the recovery will be modest, so that we'll experience some continuing increase in unemployment, but as we move into 2010, we'll start to see modest recovery," he said.
In the January budget, Flaherty predicted a strong rebound from the recession, with GDP growth of 4.3 per cent in 2010, 6.4 per cent in 2011 and 6.1 per cent in 2012, all higher than the private sector's average estimates.
Notably, the finance minister said he believed Canada's low corporate tax regime in comparison to other nations will attract corporations here.
Tim Hortons Inc. (TSX:THI) announced this week that it would relocate its corporate registration back to Canada from the U.S. in order to take advantage of lower taxes. Flaherty thinks other companies will follow suit as Canada's corporate tax rates decrease to the new 25 per cent floor in combined federal and provincial taxes.
Incorporate in Canada with CorporationCentre.ca
Click. You're incorporated ®