Canada less competitive than US, especially when it comes to taxes: CPA survey
Optimism about the economy holds from from Q1 but plunges compared to Q2 last year.
TORONTO — Canada continues to be seen as less competitive when compared with the US and tax weighs heavily in that viewpoint, according to a survey of business leaders by Chartered Professional Accountants of Canada (CPA Canada).
The quarterly CPA Canada Business Monitor (Q2 2018) surveyed professional accountants in leadership positions (CFOs, CEOs, COOs and other roles) and found 68% view Canada as a less competitive place to invest and do business versus the US, compared to a year ago. This view is basically unchanged from last quarter. Canada’s overall tax burden (29%) was the top reason why. US tax reform was second, referenced by 14% of those surveyed.
“Canada’s tax system is fundamental to creating a competitive environment,” said Joy Thomas, president and CEO of CPA Canada. “The survey findings reinforce the need for a comprehensive review of Canada’s tax system, led by an independent expert panel, that would strive to reduce complexities, address inefficiencies, improve fairness and ensure economic competitiveness.”
Thirty-two percent of respondents expressed optimism about the prospects for the Canadian economy over the next 12 months, essentially unchanged from the opening quarter but down significantly from the 50% of the second quarter of 2017.
The top two challenges to the Canadian economy are US trade protectionism (39%) and uncertainty in the Canadian economy (14%).
Company optimism sits at 53% and 68% say revenues will increase in the next year. Sixty per cent say profits will increase.
Finding skilled people is an issue for 58%. Hardest to fill positions over the past two years were: skilled trades (37%), skilled/IT positions (22% ) and middle management (17%).
Eighty-three per cent say the federal government should continue to warn Canadians to reduce their level of personal debt with 41% contending the level of personal debt is a threat to future demand for their company’s products and services.
E-mailed surveys were completed by 466 of 5,922 identified by CPA Canada as holding senior positions in industry (CFOs, CEOs, COOs and other leadership roles). The response rate was 9.7%, with a margin of error associated with this type of study ±4.4% at a confidence level of 95%.