Speech (committee meeting)

{
    "time": "2007-05-10 11:25:00",
    "attribution": {
        "en": "Dr. Roger Martin (Dean, Rotman School of Management, University of Toronto)",
        "fr": ""
    },
    "content": {
        "en": "<p data-HoCid=\"643036\" data-originallang=\"en\">Thank you, Mr. Chairman.</p>\n<p data-HoCid=\"643037\" data-originallang=\"en\">I'm going to take a little different tack from what I'd planned coming in here, because I don't think repeating what these very smart individuals have already said makes any sense. I agree with Mr. Pantaleo, Mr. Raizenne, and Dr. Hines on what they've said.</p>\n<p data-HoCid=\"643038\" data-originallang=\"en\">Maybe I'll just step back and ask, what is the context that I would encourage the committee to take as the setting in which all of this is happening? We've seen, in the last 25 years, a massive globalization of the business world, so lots of corporations are globalizing, operating in more countries, and facing situations where they are operating under very different tax jurisdictions. As was pointed out, there are many more tax treaties than there used to be and all sorts of complicated rules.</p>\n<p data-HoCid=\"643039\" data-originallang=\"en\">What's happening is that the opportunity for international tax arbitrage is increasing dramatically, and companies--wisely, as Dr. Hines has said--in the interest of being as efficient and effective as they can be, are being much more sophisticated than they would have been 25 years ago on this front. That's not going to change. If anything, they're going to get more sophisticated as more opportunities arise.</p>\n<p data-HoCid=\"643040\" data-originallang=\"en\">The big question for Canada is what's the incentive that we create for these companies to be more aggressive rather than less on international tax planning? I think the fact that we are an exceedingly highly taxed jurisdiction as it relates to corporations is the root issue we should be looking at. So I think this is why the corporations right now are very upset with this particular measure. It's not because it's crazy; it's an attempt to get more neutrality in the tax system. But any tax that increases for us, to make us an even higher corporate tax jurisdiction, will hurt our corporations and cause them to come and object to this.</p>\n<p data-HoCid=\"643041\" data-originallang=\"en\">I think we will have these kinds of challenges in trying to get neutral tax regimes on the corporate side as long as we have, along with Germany and the U.S., the highest marginal effective tax rates on corporate income in the world. I think that's what the committee should be paying attention to, the need to get that rate down considerably, because right now we have a tax system that, overall, discourages corporations from making investment. The result is that corporations invest less in Canada in machinery and equipment than they should to make themselves more productive. That is the bigger question, not the question of particular measures of interest deductibility.</p>\n<p data-HoCid=\"643042\" data-originallang=\"en\">Thank you very much.</p>",
        "fr": "<p data-HoCid=\"643036\" data-originallang=\"en\">Merci, monsieur le pr\u00e9sident.</p>\n<p data-HoCid=\"643037\" data-originallang=\"en\">Je vais aborder la question sous un angle un peu diff\u00e9rent de celui que j'avais pr\u00e9vu car il ne serait pas utile de r\u00e9p\u00e9ter ce que vous ont d\u00e9j\u00e0 dit les brillants t\u00e9moins qui m'ont pr\u00e9c\u00e9d\u00e9. Je suis d'accord avec messieurs Pantaleo, Raizenne et Hines.</p>\n<p data-HoCid=\"643038\" data-originallang=\"en\">La premi\u00e8re chose \u00e0 faire est peut-\u00eatre de se demander dans quel contexte j'encouragerais le comit\u00e9 \u00e0 poursuivre son \u00e9tude. Nous constatons depuis 25 ans une mondialisation massive des affaires qui am\u00e8ne beaucoup d'entreprises \u00e0 op\u00e9rer en dehors de leurs fronti\u00e8res d'origine, ce qui les expose \u00e0 des r\u00e9gimes fiscaux parfois tr\u00e8s diff\u00e9rents. Comme on l'a dit, il y a aujourd'hui beaucoup plus de trait\u00e9s fiscaux qu'autrefois et toutes sortes de r\u00e8gles tr\u00e8s compliqu\u00e9es.</p>\n<p data-HoCid=\"643039\" data-originallang=\"en\">De ce fait, les possibilit\u00e9s d'arbitrage fiscal international augmentent de mani\u00e8re spectaculaire et les entreprises \u2014 ce qui est sage, comme l'a dit M. Hines \u2014 sont beaucoup plus comp\u00e9tentes dans ce domaine qu'elles ne l'\u00e9taient il y a 25 ans pour \u00eatre aussi efficientes et efficaces que possible. Cela ne changera pas. En fait, ce ph\u00e9nom\u00e8ne ne peut que s'intensifier.</p>\n<p data-HoCid=\"643040\" data-originallang=\"en\">La grande question pour le Canada est de savoir dans quelle mesure il incite ses entreprises \u00e0 \u00eatre plus agressives du point de vue de la planification fiscale internationale. Je pense que le fait que nous soyons un pays o\u00f9 l'imposition des entreprises est extr\u00eamement \u00e9lev\u00e9e est la question fondamentale sur laquelle nous devrions nous pencher et que c'est la raison pour laquelle les entreprises sont actuellement tr\u00e8s m\u00e9contentes de la mesure envisag\u00e9e. Ce n'est pas que cette mesure soit fonci\u00e8rement folle puisqu'elle vise \u00e0 instaurer plus de neutralit\u00e9 dans le r\u00e9gime fiscal. Le probl\u00e8me est que toute augmentation de l'imp\u00f4t au Canada, dont le r\u00e9gime est d\u00e9j\u00e0 tr\u00e8s lourd, p\u00e9nalisera nos entreprises et suscitera leur opposition.</p>\n<p data-HoCid=\"643041\" data-originallang=\"en\">Je pense que nous ferons face \u00e0 ce genre de d\u00e9fi chaque fois que nous essaierons de rendre le r\u00e9gime d'imposition des entreprises plus neutre tant que nous aurons, avec l'Allemagne et les \u00c9tats-Unis, les taux d'imposition effectifs marginaux des profits des entreprises les plus \u00e9lev\u00e9s au monde. Voil\u00e0 la question sur laquelle le comit\u00e9 devrait se pencher, \u00e0 mon avis, c'est-\u00e0-dire la n\u00e9cessit\u00e9 de r\u00e9duire consid\u00e9rablement nos taux d'imposition car, \u00e0 l'heure actuelle, nous avons un r\u00e9gime qui d\u00e9courage globalement l'investissement des entreprises. Le r\u00e9sultat est que les entreprises investissent moins au Canada en machinerie et en \u00e9quipements qu'elles ne devraient le faire pour devenir plus productives. Voil\u00e0 la grande question, qui compte beaucoup plus que la d\u00e9ductibilit\u00e9 des int\u00e9r\u00eats.</p>\n<p data-HoCid=\"643042\" data-originallang=\"en\">Merci de votre attention.</p>"
    },
    "url": "/committees/finance/39-1/82/dr-roger-martin-1/",
    "politician_url": null,
    "politician_membership_url": null,
    "procedural": false,
    "source_id": "2073089",
    "document_url": "/committees/finance/39-1/82/",
    "related": {
        "document_speeches_url": "/speeches/?document=%2Fcommittees%2Ffinance%2F39-1%2F82%2F"
    }
}