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MONTREAL – The Canadian government needs to shave a bit off the corporate tax rate and provide financial incentives for investments in artificial intelligence and robotics following U.S. tax reforms, says a leading tax expert.“I think there’s room for tax reform,” said Jack Mintz, a professor at the University of Calgary.READ MORE: Donald Trump complains ‘Canada does not treat us right,’ threatens global tax
Story continues belowHe said the combined Canadian corporate rate should drop two percentage points to 25 per cent to protect the government’s tax base while the government also gives a signal encouraging more investment.The U.S. cut its corporate tax rate to 21 per cent from 35 per cent, allowed firms to immediately write off investments in equipment and removed taxation on dividends.“We’re going to have to think a lot more about how we can keep up, otherwise our businesses won’t be competitive relative to the U.S.,” he said in an interview.TD deputy chief economist Derek Burleton said the tax reform bill has considerably eroded Canada’s favourable corporate taxation position, giving the U.S. an edge.However, he added that the temporary nature of key elements of the tax reforms and uncertainty over future rates could offset the push to deploy investments in the U.S.WATCH: Federal budget will be tabled February 27: Bill Morneau