Tax

The advocates of a tax on advertising could reply that such a tax should be imposed on advertising that endeavours to persuade consumers to buy and not on advertising that informs consumers. From the consumer’s point of view, what matters is whether a reduction in advertising will lead to lower prices. Funds becoming available from a reduction in advertising may be transferred to other promotional efforts. In 1965 Canada had a balance of payments deficit with the United States of $1.9 billion and a total balance of payments deficit with all other countries of $1.1 billion. Adverse balance of payments repercussions of a tax on advertising would not only affect the value of the Canadian dollar and foreign exchange stability. The competitive position of Canadian industry is too valuable an accomplishment, achieved as a result of a struggle over a century, to be trifled with temporary expedients that may bring results contrary to what the measures were designed to achieve.