Over the last 40 years, trade agreements and ever closer trading ties between the U.S. and Canada might lead one to assume that Canada has had to become much more like its larger neighbour to the south to accommodate these tighter bonds. Not so, says Watson. As he notes in his book, the members of the European Union have been integrating their economies for four decades and yet the various governments in the E.U. oversee very different spending and taxing rates. A recent study of G-7 countries pointed to a wide range in corporate tax rates in these countries despite globalization. Watson notes that the different tax rates haven't led to an overwhelming stampede of capital away from countries with high tax rates to those with lower rates.
Companies simply pass on higher tax rates to suppliers, consumers or employees.
Governments haven't been forced to dramatically lower their taxes, nor have they had to savagely slash their social programs. The point of freedom, however, is that it is not an obligation. Watson thinks Canadians pay too many taxes and that our government is too big. The current set-up has other drawbacks. This kind of situation puts business people in bed with the government.