Passport system of securities regulation "second-best solution"
TORONTO, Sept. 26 /CNW/ - 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
"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
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 www.cba.ca.
For further information:
For further information: Melanie Minos, Canadian Bankers Association,
Tel: (416) 362-6093, ext. 220, Cell: (416) 587-7733, E-mail: firstname.lastname@example.org