Finance Minister Chrystia Freeland delivers remarks during an event at the Peterson Institute for International Economics, in Washington, on April 12.Kevin Dietsch/Getty Images
Finance Minister Chrystia Freeland is warning of the dangers of a global “race to the bottom” as government spending fuels the growth of the new green economy.
Freeland issued the “polite reminder” today during a speech hosted by the Peterson Institute for International Economics in Washington, D.C.
She prefaced her warning by heaping praise on the Biden administration and its “transformative” Inflation Reduction Act, a climate spending bonanza that she says will change the world for the better.
The danger, she says, is if all that spending results in lower corporate tax rates, weakening the domestic tax bases that are essential to a healthy middle class.
Freeland also urged her D.C. audience to embrace free and fair trade as a growth engine, provided it maintains a level playing field and doesn’t exclude the working class.
The finance minister and deputy prime minister is in the U.S. capital for the annual meetings of the World Bank and the International Monetary Fund.
“A corporate subsidy war might be good for some shareholders, but it would deplete our national treasuries and weaken the social safety nets that are the foundation of effective democracies,” Freeland said.
“It is in our collective interest as friends, as partners and as allies to work together to ensure that our incentives drive innovation and investment, rather than create a vicious spiral.”