Good move for Canada

Article Excerpt

Our Canadian dollar is soaring and our economy is expanding largely due to the ongoing boom in the resources sector, particularly oil and metals. High resource prices push up earnings at Canadian resource companies, and attract foreign investment. However, the resources sector is cyclical by nature. That will never change, and it’s a drawback for our currency and economy. Periodic resource booms and busts echo through our economy, disrupting growth with sudden swings in jobs, income, tax collections and so on. Past Canadian governments tried to deal with this situation by spurring growth in non-cyclical industries. To do that they used tax concessions, subsidies and other taxpayer financed gifts. Inevitably this leads to favouritism, corruption and wasted tax dollars. Favouring certain fields and firms over others can also scare off foreign investors. It makes foreigners wonder if one day they will have to compete against Canadian companies that get special tax breaks or subsidies denied to foreigners. It makes far more sense to cut corporate…