Canada applauds government's resource super-tax idea

UPDATE Peter Foster of Canada’s National Post has seen this craziness before: While this doesn’t exactly rank with Canada’s infamous 1980 National Energy Program, which not only hoisted taxes but also set prices and sought to promote Canadian ownership, it comes into the same category of no-consultation, populist, them-and-us, grab-the-windfall, damn-the-consequences political grandstanding. If one were to seek a more recent Canadian parallel, it would be Alberta premier Ed Stelmach’s hoisting of petroleum royalty rates three years ago in the name of “fairness.” We all know what happened next. Investment went elsewhere, the province was hit particularly hard by a drop in oil and gas prices, and two months ago Mr. Stelmach was forced to reverse the decision, thus further imperiling his own tenuous political future. Behind an appeal to “soak the fat cats,” Mr. Rudd’s move is a naked tax grab on behalf of a cash-strapped government. And the Canadian Government is gloating: AUSTRALIA’S proposed new tax on its resources industry could be a huge competitive advantage for Canada, according to that country’s finance minister, Jim Flaherty. Mr Flaherty noted that Canada had been reducing its corporate tax rate, and corporations in most of Canada would face a combined 25 per cent tax rate by 2012. He said the “easiest thing” for a politician to do is raise taxes, which immediately increases revenues, but limits growth. More here

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