Canada goes deeper into debt to compete with Trump tax cuts
In a fiscal update Wednesday Canada's finance minister ditched a promise to balance the budget next year, and instead rolled out measures to help companies compete with the United States.
The delivery of Can$17.6 billion (US$13.3 billion) in new spending and forgone revenue over six years comes after US President Donald Trump brought in massive US corporate tax cuts that have taken a bite out of investment in Canada.
The Canadian measures include accelerated capital cost allowances and more tax write-offs of equipment and machinery to encourage businesses to invest in Canada, sooner.
The government also pledged to build additional port and rail infrastructure to get more goods to Atlantic and Pacific ports and tap new overseas markets in an attempt to diversify trade.
Nearly 80 percent of Canada's current trade is with its US neighbor.
The government also offered a hand to struggling Canadian media by allowing non-profit news organizations to apply for charitable tax status, and providing tax credits to newsrooms that expand local coverage as well as to Canadians who buy digital newspaper subscriptions.
Opposition parties spent the day hammering Prime Minister Justin Trudeau for breaking his balanced budget promise.
Trudeau had vowed in the 2015 election campaign to post small budget deficits of about Can$10 billion per year, before returning to balance in 2019 when he will again face the electorate.
In a speech to parliament, Finance Minister Bill Morneau said dealing with "a new administration in the United States" has posed "some interesting challenges."
“The current (US) administration has moved forward with an aggressive package of tax cuts for large corporations," he noted.
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