Low Tax Rate Encourages Many U.S. Businesses to Move to Canada
On tonight's Special Report, Steve Brown explained what's causing many business owners in the U.S. to take their companies to Canada.
Last year Forbes magazine named our neighbor to the north the top country to do business in, due in large part to a lower corporate tax rate. Canada's federal and provincial rates are around 25 to 28 percent, while the United States' is 35 percent, surpassed only by Japan.
Target is adding 100 to 150 stores in Canada in its single-largest expansion, while Wal-Mart -- which already has a foothold there -- has plans to expand their reach as well.
Part of Canada's appeal is its stable economy. Ken Harris, the CEO of Kantar Realty Group, explained that "the mortgage issue in the U.S. that devastated a lot of banks didn't have the same impact in Canada ... people are generally more frugal as a population."
Austan Goolsbee, a former Obama economic advisor, believes this move north by US companies will help both countries economically. "You want American companies to be exporting to try to support jobs in the US, and to get to do that you have to go where the customers are and where it's growing."