Lou Pushelberg

Why Companies Won't Invest in Canada Canada’s economic dynamism depends on company formation and investment but in the last decade every metric in this area has been moving in the wrong direction. In Q2 2025, Statistics Canada recorded a $43.7 billion capital outflow, the largest since 2007. Today, for every dollar foreign investors put into Canada, Canadians send $2.17 abroad. The current federal approach of offering subsidies to individual companies, one deal at a time, to bribe them to set up offices and factories in the country cannot reverse this trend. Instead of chasing companies with cheques or picking winners and losers, Canada must build a business environment that attracts them naturally. The single most powerful lever to resolve this situation is corporate tax reform. Research spanning more than half a century has confirmed repeatedly that corporate taxes are the most harmful tax type for growth and in particular for company formation and investment. It is not a coincidence that Canadian company investments have shrunk since the US made its corporate tax regime more competitive compared to Canada in 2017. Countries from Ireland and Singapore to Estonia have proven this by using a competitive and creative corporate tax regime to attract huge foreign investments and local company formation. If Canada copies that creativity to reform corporate tax to only tax profits taken out of a business rather than profits that are reinvested it could change the environment for company formation and investment overnight. Read the full memo: buildcanada.com/memos/corpor…