British Columbia is reducing knowledge-based industries where earnings are taxes on investment, work and savings in favour of rising faster than the rest of the economy (4.3 consumption taxes, albeit a carbon tax that will percent annually for communications and 3.2 The authors wish to thank participants in Tax Competitiveness Council of the C. D. Howe Institute for their comments on the paper. [...] Much of the increase in the the marginal tax burden on the cost of doing business 3 Tax holidays, also used in Quebec, are high-cost, low-impact policies, typically found in Third World countries and well proven to be ineffective (Shah 1995). [...] We prefer using this measure in order to separate out the influence of dispersion as a measure of inter-asset and inter-industry distortions from the size of the effective tax rate that is related to the inter-temporal distortion – a standard deviation of 1 percent, for example, implies much more variability when effective tax rates are low. [...] A shift in the tax burden away Taxes on capital investment reduce the incentive from investment, savings and work effort and on for companies to invest in Canada and, to the to consumption would be appropriate. [...] Overall, sales tax harmonization in the hold-out provinces would have a dramatic impact Effects of Budget Changes in 2008 in reducing effective tax rates on capital (but have less impact on the cost of doing business since the The most important changes in business taxes taxation of labour would increase).