Vive Le Canada

The Hollowing Out Of Corporate Canada

Posted on Wednesday, December 17 at 13:08 by N Say
This is what any city, any country cherishes-big, thriving head offices anchoring vast empires. Head offices provide challenging, high-paying jobs, which in turn create other jobs, from accountants and lawyers to ad designers and chefs. They support the arts and pay taxes that buy social services. They keep talented university grads from fleeing. It is no exaggeration to say that Royal and the other Big Five banks keep downtown Toronto from looking like Buffalo, N.Y., on a bad night.

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The hollowing out trend will go in fits and starts-the bear market has substantially reduced the takeover pace-but the long-range outlook doesn't look favourable for Canada. What can be down to slow it down, even reverse it? There is no easy answer. Federal governments, no matter what their political stripe, will likely keep some sort of ownership restrictions on "strategic" industries, with financial services at the top of the list. Making Canada more competitive, Nixon's solution, is probably the best idea. Among other things, it means keeping tax rates competitive, ditching the onerous capital tax, eliminating inter-provincial trade barriers and ramping up research and development expenditures (Canada's R&D spending is among the lowest in the world). It also means convincing Ottawa not to act simply as a money-transfer point, sucking tax dollars out of Toronto and Calgary and pumping them into loser industries and have-not provinces. If the world discovers that Canada is a superb place to invest, it will attract and keep head offices. This process could take decades. In the meantime, watch Canada's cities get more hollow before they fill up again.

Eric Reguly writes a business column for The Globe and Mail and co-hosts "The Close" on Report on Business Television.

The Hollowing Out of Corporate Canada

Note: The Hollowing Out of Co...

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Comments

  1. by Jim Callaghan
    Fri Dec 19, 2003 5:28 am
    Make sure you read the entire article through the link. There is some good info in there, and Eric uses Mel Hurtig\'s \"The Vanishing Country\" to make a couple of good points.

    I would say that great sucking sound you hear isn\'t only our jobs heading south, it\'s American jobs heading to China and India.

    The pendulum is still swinging to the right, and perhaps, if Canada manages to survive, it will swing back again.

    I won\'t be here to see it, one can only hope that common sense prevails.



    ---
    "Arrogance in Politics is unacceptable"
    Jim Callaghan
    Minden, Ontario
    705-286-1860
    www.misterc.ca

  2. by Dave Ruston
    Fri Dec 19, 2003 6:36 am
    We`ve got to re-elect a government that will tell the uSA and the WTO and IMF to mind their own business, and then erect more investment rules preventing more Canadian companies from foreign takeover, and also telling foreign corporations that if they want to do business here, not only do they make their product here, but they also have a Canadian head office! Governments can also get re-involved in business, \'crown corporations\' as i remember! Governments are here to better the life chances of all Canadians! We must retake control of our country, and get it out of the hands of the transnationals!

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    Dave Ruston

  3. by avatar Dr Caleb
    Fri Dec 19, 2003 4:32 pm
    Crown corporations pi$$ me off. The government is there to provide for the *citizens* of Canada, not the *consumers*.<p> Too many companies like Telus and Epcor have been built with my tax dollars, only to end up under the control of American corporations. FYI, Telus is 30% owned by Verizon. If you're going to set up a company with tax dollars, then when the company goes private, it should pay those tax dollars back.<p> <p>---<br>"History does not repeat itself, but it does rhyme" Mark Twain

  4. by Dave Ruston
    Fri Dec 19, 2003 7:55 pm
    First, you don`t privatize crown corporations that are essential services like hydro, natural gas, or water. Secondly, crown corporations provide jobs right here, in CANADA! Thirdly, Canada once again should place rules RESTRICTING foreign ownership of this country! If we don`t, it`s like letting your next door neighbour run your household finances. This is not to say that there isn`t room for private corporations. Of course there is. But once again, capitalism must be governed, and not do the governing! Foreign investment must also come in the form of NEW JOBS and a CANADIAN HEADQUARTERS instead of a take-over of a Canadian company, where the foreign firm shuts down the Canadian competition and eliminates jobs, as well as relocating the high paying executive jobs to the USA! There is a place for crown corporations, and they can be run efficiently, and provide affordable services by people who have a vision for Canada like me!

    ---
    Dave Ruston



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