OTTAWA - The Conservatives are threatening the ability of Canadian businesses to compete globally and must reverse two key policies that could result in job losses and foreign takeovers, Liberal Leader Stephane Dion said Monday.
The Conservatives made a big mistake in the federal budget by eliminating a tax write-off for businesses that expand overseas and also with a "crippling'' non-refundable, 31.5-per-cent tax on income trusts, Dion said.
The write-offs are granted to companies in the United States, Europe and Japan and Canadian businesses will be left behind if the competitive disadvantage isn't corrected, he said.
"Canadian businesses should not be forced to go into the arena of a globalized economy with one arm tied behind their backs,'' Dion said during a visit to Toronto's financial district.
"It is nonsensical that the Conservative government would make the playing field uneven for Canadian businesses.''
The end of the tax write-off -- which allows companies to receive interest-free loans for foreign investment -- is the biggest change to the corporate tax system in 30 years and the Conservatives didn't do enough to research the idea and the impact on Canadian businesses, Dion said.
But Finance Minister Jim Flaherty said the change is simply about tax fairness, and was recommended twice by the auditor general.
"(Dion's) in favour of individual Canadians having their taxes raised to pay for corporate tax breaks, that's what it amounts to,'' Flaherty said.
Dion also said the Liberals would change the income-trust tax if elected, by reducing it to 10 per cent and making it refundable to Canadian investors.
The tax change has resulted in 15 takeover attempts in the last five months and could threaten Canada's economic sovereignty, Dion said.
"With foreign companies clamouring to take over Canadian companies, this government is only making it easier for them,'' Dion said.
