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Sep 25, 2018

Canada should be cautious of U.S.’s ‘dangerous experiment’ tax reform: Shopify CEO

Shopify CEO: Canada should be cautious of U.S.’s ‘dangerous experiment’ tax reform

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The CEO of Canadian e-commerce giant Shopify calls recent U.S. tax reforms a “very dangerous experiment,” and is warning Canada not to follow suit in order to stay competitive.

Tobi Lutke, founder and CEO of Ottawa-based Shopify, told BNN Bloomberg that he wouldn’t recommend the Canadian government cut corporate taxes exactly as the Trump administration has done.

“I think every country, including Canada, should continue to look at its taxes, optimize it, but do it evidence-based,” Lutke told BNN Bloomberg’s Amanda Lang on Tuesday. “The American tax reform was largely emotion-based and not data, science, or anything other based than that.”

“I think they are attempting a very dangerous experiment over there, and I want to caution Canada from doing the same frankly,” he added.

Lutke’s comments come as several prominent Canadian business leaders have sounded the alarm over the country losing competiveness to the U.S. since the Trump administration implemented tax cuts earlier this year.

Finance Minister Bill Morneau has said he is looking at all aspects of the U.S. tax cuts as he prepared a fall update that would address Canada’s response to the U.S. measures.

Lutke said trade tensions between Canada and the U.S. are creating uncertainty in Canada’s relationship with the U.S., but the American trade war with China presents a “certain opportunity” for Canada.

“I think we have this economic consideration, overhang of NAFTA, where no one really knows which way that’s going to go,” Lutke said  “It’s an opportunity, in general, for Canada to say ‘hey, you know a significant percentage of our trade is with the United States, and we want to probably diversify that a little bit.’”

Lutke said the government needs to look to Asia and Europe for a better trading relationship.

“We have a free trade agreement with Europe and I think that may end up being quite good for economy,” he said.