Liberal Leader Stephane Dion pledged to reduce the federal corporate tax rate on Friday to further bolster economic growth and fuel competition with foreign markets.
During a speech at the Economic Club of Toronto, Dion said the previous Liberal government lowered the rate from 28 per cent to 19 per cent.
He went on to slam the Conservative government for its pledge to reduce the rate to 18.5 per cent by 2011.
"What I have said for our economic prosperity, what will be especially important is to have a competitive tax system and to have a way to decrease our corporate tax, deeper than what was planned," Dion said after his speech at a downtown hotel.
The Liberal leader said that reducing the tax will lower the cost of capital for Canadian corporations, allowing for future investments in capital equipment and its workforce.
Canadian companies invest $1,600 per worker less than U.S. firms and $700 per worker less than the Organization for Economic Co-operation and Development average, Dion said during his speech.
The OECD is an international resource for global economic and social data statistics and serves to monitor, analyze and forecast economic developments.
Dion said the tax cut would also protect Canadian corporations from foreign takeovers and will facilitate foreign investment in the country, diverting dollars away from the U.S. market with a "big hook."
"A key competitive advantage for Canada used to be our weak currency. Now that our dollar is at par, and we have lost this weak currency advantage, a key advantage must be a competitive corporate tax rate," Dion said.
"A lower corporate tax rate is a powerful weapon in the federal government's arsenal to generate more investment, higher living standards and better jobs."
Dion also took the opportunity to reiterate key issues the Liberal Party must see addressed in the Oct. 16 throne speech for it to support the current minority government.
He said an end to Canada's combat mission in Afghanistan in February 2009 is imperative and called for stronger action on climate change and Canadian poverty.
"We will read the throne speech and discuss it between us taking into account only the interests of Canadians," Dion said.
"There is Afghanistan, there is the challenge of the environment and climate change, there is the need to fight poverty in this country and there is the need to have a more competitive Canada at a time when the low currency is not the strategy we will follow anymore."
