Canada’s uncompetitive tax system needs an overhaul. Here’s how we can make it happen
Why Canada needs a comprehensive tax review
You would be hard pressed to find anyone who thinks Canada’s tax system is in working order.
The business groups calling for a comprehensive review of our tax system represent more than 200,000 companies of all sizes across Canada, as well as more than 210,000 tax experts and more than half the value of the Toronto Stock Exchange.
A review is nice, but it’s time for Canada’s 30-year tax revamp
The most notable element of the new U.S. tax law is a reduction in both corporate and personal tax rates – the former on a permanent basis and the latter temporarily through 2025. Many expect the changes will have a stimulative effect on U.S. economic growth, inbound investment and job creation. Others express concern about their effect on federal deficits, the national debt and the after-tax distribution of personal income.
Canada’s tax system: What’s so wrong and why it matters
It's good that Finance Minister Bill Morneau has announced a review of tax expenditures. I would go further. With low normal growth, Ottawa needs to jolt the economy by revamping Canada's overall tax structure for the first time since the tax reforms of 1986-87. We should broaden the tax base, lower marginal rates and shift reliance on to the less economically harmful taxes to encourage investment, risk-taking and entrepreneurship.
Canada’s tax system is mired in the past and falling short of delivering a competitive environment and a fair society. It needs an overhaul so that Canada’s businesses and people can prosper and compete internationally.