Manitoba's provincial government would be doing a great service to taxpayers if they focussed as hard on cutting taxes as they did on planning a party for the Queen. A recent study on investment conducted by the Institute of Chartered Accountants of Manitoba (ICAM) has reaffirmed what the Canadian Taxpayers Federation has been saying for a long time - business taxes need to be cut.

ICAM's study looked at six jurisdictions, measuring Manitoba to Alberta, BC, Saskatchewan, and Ontario (and Canada as a whole) as a place to work, live and invest. Manitoba has fallen behind Alberta, BC and Ontario in providing meaningful tax relief. The study concluded that even though the province has been reducing the small business tax, the rates charged to large business is the highest of the six jurisdictions studied.

ICAM's CEO, Gary Hannaford stated "the small business corporate tax reductions make Manitoba very competitive with other provinces, however we have not seen the same aggressiveness in reductions to the general corporate tax rate."

Here is the problem: Manitoba's tax rate is 17% and has not changed since the mid 1990's. Alberta boasts a 13.5% rate while Ontario is 14% for 2001. These percentages alone show that Alberta and Ontario are going to enjoy a higher return on their investments since the rates are lower.

Paying down debt is also a priority when it comes to investment dollars coming to Manitoba. ICAM's study showed that as the debt-to-GDP ratio is reduced, the investment climate will improve. Since less money would be allocated for interest payments on debt, there is more flexibility to allocate those funds elsewhere.

High taxes result in businesses relocating to jurisdictions with lower tax rates. In some cases they go to other countries, but more often than not they go to another province. Governments need to recognize that by lowering taxes they actually retain and can even grow their tax base

The government should be doing whatever it can to ensure that Manitoba stays competitive with other provinces because according to budget documents, our province relies heavily on business income taxes. Since 1999, the province has raked in over $1.2 billion from business income taxes alone. In that same time period, Alberta amassed over $6.6 billion. During the same time frame, Manitoba's population grew by 0.6% and Alberta's by 3.5% Maybe there is something to be said about having a lower rate

It is worth mentioning that compared to other industrialized nations, Canada has one of the highest combined federal-provincial business tax rates. This already puts us at a significant disadvantage, however Manitoba could do its part by lowering its business tax rate. This would help stimulate the economy, put downward pressure on outmigration, and most importantly, it would give Manitoba businesses a competitive advantage.

So, Mr. Finance Minister here's a thought - rather than wait for every other province to lower its tax rates and attract all of our businesses there, why doesn't our province take the initiative and get ahead of the game Bottom line is Manitoba should reduce business income tax rate to a level much lower than 17 percent, it is just makes sense.