While they have slightly differing views on the landmark tax cuts just adopted in the U.S., and their potential effect on Canada, some of the country鈥檚 leading fiscal-policy experts agree on one thing.

In short: Don鈥檛 expect Canada to engage in a corporate-tax-cut-war with the U.S. That鈥檚 according to three prominent fiscal experts contacted by The Canadian Press as the U.S. passed a bill that will make it cheaper to do business down south.

Kevin Page, Jack Mintz, and Kevin Milligan all agreed Canada has different policy tools to respond. And they expressed doubt the likeliest tool involves taking a chainsaw to corporate tax rates.

The University of Calgary鈥檚 Mintz believes Canada should worry about its neighbour鈥檚 tax reform; he鈥檚 expressed it in National Post pieces with titles like, 鈥淭rump鈥檚 tax tsunami is about to wallop Canadian jobs and investment.鈥�

His view is that for several decades Canada had two business advantages: lower corporate taxes, and free trade. Now the taxes are about equal, and free trade is in jeopardy. He said Canadian businesses also face new challenges, like carbon taxes; while the U.S. eliminates regulations.

But he said Canadian policy-makers can respond with a variety of solutions. One is tax rates. Others include simplifying regulation, or designing tax policy to benefit investment, say, by steering the proceeds of carbon taxes back to businesses.

鈥淭here are a gamut of different policies,鈥� he said in an interview.

鈥淚t鈥檚 wrong to think that a single nugget is going to solve, deal, with the issue.鈥�

He suggests Canadians seek some clues in an annual World Bank document. In the bank鈥檚 annual Doing Business report, Canada scores high in several places 鈥� it鈥檚 No. 2 in the world for ease of starting a business.

But it points to sore spots.

Overall, Canada ranks as the 22nd-best country to run a business, sandwiched between Lithuania and Malaysia 鈥� 13 spots behind its neighbour, the U.S. It鈥檚 57th in dealing with construction permits, and 108th in getting electricity.

Page, Canada鈥檚 first parliamentary budget officer, also doubts copycat tax cuts are coming.

鈥淚 think it is unlikely Canada will try to match U.S. tax cuts,鈥� Page said in an email.

鈥淭ax reform pressures will likely build in Canada over the next few years leading up to the 2019 elections but it is more likely to have a broader agenda than tax reductions , including fairness, sustainability, growth, (the) environment.鈥�

He said corporate income taxes are one important cost of doing business 鈥� but that companies look at a variety of things: dividend, capital and payroll taxes; regulations; and production costs like wages.

He said Canada might even draw some early benefit from the U.S. tax bill. That鈥檚 because economic growth in the U.S. tends to spill into Canada. Scotiabank鈥檚 models estimate that for every percentage point of growth in the U.S., there鈥檚 a half-point growth in Canada.

Page said he expects a short-term positive impact for Canada. But he said that dissipates as the bill鈥檚 less-desirable aspects kick in 鈥� like the $1.5 trillion added to the debt, Republicans鈥� talk of offsetting that through social-spending cuts, growing inequality, and the diminished fiscal manoeuvring room whenever another recession hits.

He offers a term to describe the temporary boost for Canada: 鈥滱 sugar high.鈥�

Kevin Milligan, a UBC economist who has advised the Trudeau Liberals on tax reform, said he鈥檚 not nearly as concerned about this bill as he would be if it gave U.S. businesses a permanent tax advantage of, say, five percentage points, rather than simply putting the countries at similar rates.

鈥淭hen we鈥檇 be in a world where we鈥檇 be really, perhaps, in trouble 鈥� where you鈥檇 see firms wanting 鈥� to shift profits out of Canada. The fact that we鈥檙e tied, at about the same rate, means there鈥檚 no incentive to move profit,鈥� he said.

鈥淭hat鈥檚 why I don鈥檛 have apocalyptic concerns that some others might have expressed.鈥�

He said businesses will continue making choices based on numerous factors, like the cost of providing health insurance to employees, a significant issue in the U.S.; good transit links; pleasant communities; workforce training; and the ability to attract talented immigrants 鈥� an area where Canada has gained some advantage, he said, given the current U.S. political climate.

鈥淪o that鈥檚 the question,鈥� Milligan said.

鈥淎re we best off getting into a tax-rate competition with the U.S., or competing on other grounds?鈥�

Alexander Panetta, The Canadian Press

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