CALGARY, Sept. 12, 2012 /CNW/ - Manitoba and Saskatchewan are among the least tax competitive Canadian provinces according to the Annual Tax Competitiveness Ranking by The School of Public Policy. Report authors Jack Mintz and Duanjie Chen analyzed the business tax regimes of the 10 provinces and ranked them based on their Marginal Effective Tax Rate (METR) on capital investment.
High METR rates inhibit a jurisdiction's ability to attract investment and grow their economy, the authors argue. The METRs for Manitoba and Saskatchewan are 27.1 and 25.2 percent respectively - only B.C. has a higher METR at 27.7.
"The common feature in these provinces is a provincial sales tax that is not in the form of a value-added tax like the federal GST, and hence adds additional tax costs on capital investment through its levy on purchases of capital goods," the authors write. "This provincial sales tax effectively raised METRs by over nine, 10 and 14 percentage points, respectively, for Saskatchewan, British Columbia and Manitoba."
As a comparison, Alberta, which has no provincial sales tax, has a METR of 17.9 percent and New Brunswick has the lowest METR at 4.6 percent. Canada's national average is 19.9 percent.
The report can be found at www.policyschool.ucalgary.ca/publications
SOURCE: The School of Public Policy - University of Calgary