This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, August 24, 2026
Although tariffs are top of mind these days it isn’t just tariffs, quotas and subsidies that impact our trade balance. Taxes can have an even more powerful effect on trade. We ignore that at our peril.
What if I told you we impose taxes that exempt imports from other countries but tax our own exports to those countries? Not very smart, you might say, but that’s precisely what the corporate income tax does. Corporate taxes add to production costs just as much as wages and capital costs do, thus making it more expensive to export goods and services from Canada. But since Canada’s corporate income tax is not paid by foreign companies exporting to Canada, their products enter Canada tax-free (although foreign companies do pay corporate tax to their home governments).
Consider the auto industry, which is currently being hurt by United States tariffs. When a car company exports a vehicle to the United States, the cost of that vehicle includes corporate income taxes, municipal property taxes and sales and excise taxes.
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Jack Mintz is the President’s Fellow at the University of Calgary’s school of public policy and a distinguished fellow at the Macdonald-Laurier Institute.
