Dec 1, 2016
Trump tax cut could cause Canadian brain drain, David Dodge says
BNN Bloomberg
,Former Bank of Canada Governor David Dodge is concerned Donald Trump’s plan to cut high-income tax rates could deprive Canada of the skilled workers it needs to increase productivity. In an interview on BNN, Dodge, now a senior advisor with law firm Bennett Jones, said Trump’s plan would undercut Canada’s marginal tax rate, and could trigger a problematic brain drain.
“That’s going to make it very hard for Canada to attract and retain the very people we need to drive growth. I think this is a real problem,” he said. “I think we have a real risk here and there will be a real pressure on Canadian operations to decamp and go to the States with that big a personal income tax gap.”
Dodge said Canada has already taken policy moves that raise the specter of driving highly-skilled, highly-paid workers to lower-tax jurisdictions -- and the confluence of those moves with the U.S. election result increases the likelihood those workers will leave.
“We faced a challenge when the Minister of Finance raised the [high-earner tax] rates last time, and when provincial ministers raised rates,” he said. “Now we face that [new] challenge in Donald Trump.”