Trump tax cut could cause Canadian brain drain, David Dodge warns
Former Bank of Canada Governor David Dodge is concerned Donald Trump’s plan to cut high-income tax rates could deprive Canada of the skilled workers it needs to increase productivity. In an interview on BNN, Dodge, now a senior advisor with law firm Bennett Jones, said Trump’s plan would undercut Canada’s marginal tax rate, and could trigger a problematic brain drain.
“That’s going to make it very hard for Canada to attract and retain the very people we need to drive growth. I think this is a real problem,” he said. “I think we have a real risk here and there will be a real pressure on Canadian operations to decamp and go to the States with that big a personal income tax gap.”
Dodge said Canada has already taken policy moves that raise the specter of driving highly-skilled, highly-paid workers to lower-tax jurisdictions -- and the confluence of those moves with the U.S. election result increases the likelihood those workers will leave.
“We faced a challenge when the Minister of Finance raised the [high-earner tax] rates last time, and when provincial ministers raised rates,” he said. “Now we face that [new] challenge in Donald Trump.”