Taxation And Economic Climate In Canada

Canada is one of the largest and strongest economies in the World with annual GDP of $1.6 trillion. The key industries, which contribute the most to the economic growth, are real estate, leasing, manufacturing and oil or gas extraction. Retail sector is also very developed. It employs about 12 percent of the population. As for the banking system, in 2010, the World Economic Forum named it the best in the World and gave it a score of 6.7 out of 7, which means that Canada’s banking system is healthy with sound balance sheets.

shutterstock_199224047Healthy economic climate is a key to success

Such strong performance is explained by great economic freedom, i.e. protection of property rights, open-market policies and independent judiciary. The World Bank, ranked Canada 23rd out of 190 countries in its anual ‘Doing Business 2017’ report. Canada is placed second in the World regarding the ease of starting business. There are only two procedures and it takes just 1.5 days to complete them. For comparison, an average for OECD high income countries is 5 procedures and 8 days. So if you consider to study Bachelor of business in Canada, you have made a right choice.

North American tax haven

Taxation system is also very attractive in Canada. Companies make only 8 payments per year and the total tax rate is 21 percent of profit. It is twice as low as OECD high income countries average. To prepare and pay taxes, Canadian companies spend usually 131 hours per year or 16 working days. It is again a very good result, as for example, in the neighboring United States, companies spend 22 working days for this purpose. Tax rate is 44 percent in the US. So it is no wonder, why big American automobile producers prefer to move their factories to Canada.