Trump's corporate tax rollback won't siphon businesses from Alberta, economist predicts

Deep corporate tax cuts promised in the United States by president-elect Donald Trump are not likely to trigger an exodus of businesses from Calgary, an economist says.

The incoming Republican president campaigned on a pledge to slash the business tax rate from 35 per cent to 15 per cent.

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University of Calgary economist Ken McKenzie saysdespite what some analysts have predicted, Trump's tax cuts are not likely to cause a southbound stampede of corporate head offices, especially in the oil and gas sector.

"So as long as they can earn a rate of return on their investment in Alberta that is high enough to satisfy their shareholders, they will invest here after the payment of taxes, royalties and things like that," he said.

"As long as they can make money here, they will drill here and produce here."

McKenzie says any positive impact Trump's tax changes have on the U.S. economy would also be good for Canada, since it would likely stimulate trade.

Still, he says political leaders in Canada need to be flexible about future corporate tax strategies if they want to continue to attract companies and investors.

"We still need to think in terms of being competitive not just in oil and gas but all dimensions," he said.

McKenzie says Alberta continues to offer a lot of reasons for corporations to open up shop, including a highly-trained and educated workforce.

Notley says Canada's single-payer health care system is also a major enticement for U.S. companies looking to come north, since it saves them the cost of providing insurance coverage.

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