Darryl White believes Canada has "fiscal capacity" for tax cuts despite deficits
Bank of Montreal CEO Darryl White believes Canada's federal government should be cutting taxes, despite fears of increasing an already large deficit.
Speaking at the Toronto Global Forum on Wednesday, White said that Canada lacks competitiveness when it comes to tax policy. He argued that the cancellation of a proposed hike in the capital gains inclusion rate for annual gains over $250,000 hasn't gone far enough. He wants to see new policies that would allow businesses to write off capital assets and R&D spending sooner, as well as lowering the corporate and income tax rates.
White professed to normally support balanced budgets, but he argued that Canada has "a little bit of fiscal capacity to play with." He argued that in the midst of a trade war and a repositioning of Canada's economy o nthe global stage we can throw a preference for balanced budgets "out the window and take a little bit more risk."
The Parliamentary Budget Officer (PBO) recently called out Canada's deficits as "unsustainable" projecting a fiscal deficit of $68.5 billion for the 2025-26 fiscal year. Bloomberg reports that National Bank of Canada Chief Economist Stefane Marion has predicted a deficit of around $100 billion.
White's proposals echo somewhat a recent report from CPA Ontario which called for tax simplicity as well as cuts to the higher brackets of personal income and corporate tax rates. Despite what appear to be high deficits, he argues that Canada's debt to GDP ratio is lower than many of its peers in the developed world, offering some room to cut taxes with the stated goal of increasing competitiveness.
