Per the conclusions of a report prepared by PricewaterhouseCoopers for the Business Council of Canada, the nation is likely to experience adverse effects due to the major tax reforms passed by the U.S. in December 2017.
These issues will most likely stem from a compromised ability to compete for foreign investments. Canada’s corporate tax rates are now much greater than America’s, because Finance Minister Bill Morneau didn’t make any significant cuts to the nation’s budget in terms of taxes, according to Global News.
However, Canadian tech will largely go unaffected by this upheaval – a major plus for the nation’s economy. PwC consultants stated that Canada’s recent history of attracting foreign workers with tech skills from all over the world will work considerably in its favor. This could be especially true among tech-savvy émigrés from majority-Muslim countries who may be put off by fear of anti-immigrant sentiments in the U.S., as The Globe and Mail reported on earlier this year regarding Canada’s appeal to international programmers and coders.
There is also little risk of Canadian tech workers picking up stakes and bringing their talents to U.S. firms. According to PwC, the tax reform “marginally increases incentives for highly skilled Canadian workers to relocate to the U.S.,” meaning they likely have better chances in their own country.
Tech aside, the risks caused by the American tax cuts will still trouble Canadian business leaders. The reforms could ultimately cause Canada to lose $85 billion in gross domestic product and siphon away up to 635,000 jobs.