Tim Horton’s is the largest fast food chain in Canada.  For that reason, most people assume it’s a Canadian company.  It’s not. 

It may operate out of Oakville, Ontario, but it’s incorporated in Delaware.  90% of it’s revenue may come from Canada, but it’s still technically and American company, paying American taxes – and that’s the problem. 

The combined state and federal corporate tax rate in the US is now almost 40%.  It’s the second highest on Earth and (depending on whose numbers you use) 5-10% higher than Canada.

So, Tim Horton’s is saying goodbye to the red, white, and blue in favor of the red and white. 

According to one analyst, the move will give the company a tax savings of up to 8% by 2012.

This should surprise no one.  There’s very little reason for ANY company to stay in the US, given that right off the bat you’ll be giving almost half of your company’s income to the feds.  Add to that our increasing amount of interfering government regulations combined with rumors of new “sin taxes” that punish consumers for their unhealthy lifestyles, and you have a recipe for financial disaster that any business would be wise to avoid.  As the president continues to raise taxes in the United States, expect to see more of this.

Good luck North of the border, Tim.

-Robert Laurie