Home Page Election 2019 News Opinion Foreign Policy Politics Policy Legislation Lobbying Hill Life & People Hill Climbers Heard On The Hill Calendar Archives Classifieds
Hill Times Events Inside Ottawa Directory Hill Times Store Hill Times Careers The Wire Report The Lobby Monitor Parliament Now
Subscribe Free Trial Reuse & Permissions Advertising
Log In
Opinion

Canada’s tax system isn’t working for Canadians or our economy

By Bruce Ball      

The reality is Canada’s tax system is no longer fit for purpose and it is hurting Canadians, our competitiveness and our economy. Parliamentarians seem to agree.

Finance Minister Bill Morneau, pictured, is expected to release the federal budget the week of March 18. Canada has been warned by international organizations like the OECD and the International Monetary Fund that we need to get our tax house in order or risk the consequences, writes Bruce Ball. The Hill Times photograph by Andrew Meade
Share a story
The story link will be added automatically.

Every day throughout Canada, the daily lives of Canadians and businesses are negatively impacted by our outdated tax system. Through recent research, we have heard about a person with a disability in Nova Scotia missing out on tax credits due to the paperwork required; a single mother in British Columbia wrestling with a decision to go back to work and losing benefits as a result; a charity care home in Ontario getting wrapped up in a two-year dispute with the Canada Revenue Agency over a tax bill and seeing patient care suffer; and a small company in Manitoba missing out on tax credits, for apprentices and for research and development, due to the time and money required to apply and the uncertainty of success.

The reality is Canada’s tax system is no longer fit for purpose and it is hurting Canadians, our competitiveness and our economy. Parliamentarians seem to agree. Standing committees in the House of Commons and the Senate have recently recommended that the government launch an independent review of our tax system—and for good reason.

Canada’s last tax review was concluded in 1967 when the world was a very different place. In the intervening 52 years we have seen a dramatic transformation in what were once seen as traditional family roles, a digital revolution that has bought us technologies that were once the realm of science fiction, and an explosion in global trade and commerce. What has emerged over those many years is a far from perfect tax system saddled with a myriad of tax breaks and exemptions by successive governments that made it even more bloated and complicated. We can’t ignore this issue any longer.

Every year more than a thousand chartered professional accountants (CPAs) volunteer for clinics to help people fill out their tax forms and get the credits they are entitled to. Beyond those tax filers however, more than $1.2-billion in federal benefits for low-income households goes unclaimed each year due to complexity, according to Prosper Canada. Fewer than 40 per cent of the more than 1.8 million adults who report qualifying disabilities claimed the credit in 2012, as noted in a June 2018 study by the Standing Senate Committee on Social Affairs, Science and Technology. Even large multinationals struggle to navigate the intricacies of Canada’s tax system, let alone small family businesses across the country which in many cases cannot afford professional advice.

Many of the tax expenditures introduced over the years were done so with noble aims but now complicate the system and it’s not known if they are delivering on their goals. Among professional accountants in leadership positions, 79 per cent think a comprehensive review of Canada’s tax system is required, according to the CPA Canada Business Monitor survey in the fourth quarter of 2018. Among the perceived benefits of a comprehensive review of the tax system, 64 per cent of those surveyed think the tax system would become less costly and time-consuming for both individuals and businesses.

Canada has been warned by international organizations like the OECD and the International Monetary Fund that we need to get our tax house in order or risk the consequences. The recent report Canada’s Tax System: What’s so Wrong and Why It Matters captures both the research on what ails our tax system along with case studies from members of Chartered Professional Accountants of Canada.

A full tax review is clearly the necessary next step. It will not be a simple undertaking, but we can learn the lessons of other countries. We are now seriously lagging behind, and the world isn’t waiting for us. This must be a priority for the next parliament.

Bruce Ball, FCPA, FCA, is vice president of taxation at the Chartered Professional Accountants of Canada.

The Hill Times 

Explore, analyze, understand
Charting the CBC’s challenging present and uncertain future
Charting the CBC's challenging present and uncertain future: Where it has been and where it is going provides an insider profile of the struggles faced by Canada’s public broadcaster in the 21st century.

Get the book
You Might Be From Canada If…
You Might Be From Canada If . . . is a delightful, illustrated romp through this country as it celebrates its 150th birthday.

Get the book
Inside Ottawa Directory – 2019 Edition
The handy reference guide includes: riding profiles, MPs by province, MP contact details, both Hill and constituency and more.

Get the book
Related Policy Briefings
Agriculture Policy Briefing
Short and informative analyses on policy challenges that bring background and recommendations to policymakers, journalists and the general public.

Read policy briefing
Environment
Short and informative analyses on policy challenges that bring background and recommendations to policymakers, journalists and the general public.

Read policy briefing
Energy: Carbon Pricing Policy Briefing
Short and informative analyses on policy challenges that bring background and recommendations to policymakers, journalists and the general public.

Read policy briefing

Politics This Morning

Get the latest news from The Hill Times

Politics This Morning


Your email has been added. An email has been sent to your address, please click the link inside of it to confirm your subscription.

McKenna wins re-election in Ottawa Centre, trumpets voters’ support for climate fight

News|By Neil Moss
'I’m so relieved,' Catherine McKenna said, about continuing with the Liberal climate change plan.

Election 2019 was a ‘campaign of fear,’ say pollsters

'There may well be a message to this to the main parties, that slagging each other will only take you so far,' says Greg Lyle.

Election 2019 campaign one of the most ‘uninspiring, disheartening, and dirtiest’ in 40 years, says Savoie

News|By Abbas Rana
Green Party Leader Elizabeth May says she has never seen an election where mudslinging overwhelmingly dominated the campaign, leaving little or no time for policy discussion.

Strategic voting to determine if Liberals will form government, say political players

News|By Abbas Rana
As many as nine per cent of progressive voters could vote strategically in this close election potentially affecting the outcome in more than 100 ridings, says Innovative Research president Greg Lyle.

Turkish offensive should pressure feds to act on repatriation of Canadian citizens in Kurdish-controlled ISIS detention camps, says expert

News|By Neil Moss
The issue of repatriation will be less politically fraught after the election, says expert.

Business tops experience among 2019 candidates, one-third have run for office before

Here’s an analysis of the record 1,700-plus candidates running for the six major parties this election.

Pod save us all: the growing role of political podcasts in election 2019

News|By Mike Lapointe
The Hill Times spoke with some podcast hosts taking a deeper dive into the political nitty-gritty, within a medium that only continues to grow in popularity.

No-shows from Conservative candidate could hurt party’s chances in tight Kanata-Carleton race, say politicos

News|By Palak Mangat
The Conservative's candidate, Justin McCaffrey, has skipped two events, including a debate on the environment, intended to feature all candidates.

For whom will the bell toll in Peterborough-Kawartha?

In a riding where voters are deeply engaged in the political process, candidates avoid the low-hanging fruit and stay out of the mud as they grapple with who to send to the House of Commons.
Your group subscription includes premium access to Politics This Morning briefing.