Tuesday, 26 August 2014

Scandalous Double-Double: the Tim Hortons/Burger King Deal

Has Canada become a flag of convenience?  That's certainly what it looks like as two fast food giants get ready to merge and take advantage of the tax benefits that accrue from being a Canadian corporation.

When I first heard about the Tim Hortons/Burger King plan which would see BK buy TH, forming a new entity with head offices in Canada, I couldn't believe my ears.  American corporations have been criticized for setting up shell companies in foreign countries to avoid US taxes through a process called tax inversion, but in the past they've usually been places like Bermuda, the Cayman Islands or Panama. 

More recently Ireland has gotten in on the act, but we know just what a hit that country took in the 2008 meltdown, so perhaps it's not surprising the Irish are making things easy for corporation.

But Canada doesn't have that excuse.  We did pretty well post-2008, in large part because Stephen Harper had his feet held to the fire by the Liberals and NDP, forcing him to actually stimulate the economy intially.  Since then, though, Harper hasn't let a good crisis go to waste (as Naomi Klein would say) and has  continued to undermine our tax system by lowering coporate taxes (first started by the Paul Martin Liberals) while dismanteling our social safety net.  Believe it or not, Canada now taxes corporations considerably less than the US.

This is scandalous--and another reason to get rid of Stephen Harper.

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