Canada’s tax system holds business back, costs people money

Tax accountants say it’s time to bring the system up to date

Canada’s tax system holds business back, costs people money
Steve Randall

Canada’s tax system is wrong and badly needs changes to bring it in line with international standards according to tax accountants.

A report from Chartered Professional Accountants of Canada (CPA Canada) says that the outdated and complex system is damaging competitiveness and costing individuals money.

Using real case studies from tax professionals, the report finds that many people and businesses are losing out because of the way the system operates.

For example, for vulnerable people and those on low incomes the complexity of the CRA’s processes means they miss out on much-needed income support. 

For businesses and their advisors, compliance is becoming increasingly difficult, putting the system in jeopardy. And the report says the system is out of step with international trends or not doing enough to promote global competitiveness.

"The report makes clear that it's time to move the conversation beyond the need for a comprehensive review of the country's tax system to how to conduct such an undertaking," stresses Bruce Ball, vice-president, tax, with CPA Canada. "We need a tax system that helps create jobs, attracts investment and keeps the Canadian economy competitive. Unfortunately, the current system is falling short on those vital measures.”

Long term solutions are needed
CPA Canada has been calling for changes as the last major review was more than 50 years ago. And while, recent announcements may help ease the burden for small businesses, they are not a long-term solution.

"While the new measures introduced in the Fall Economic Statement to help accelerate business investment have been welcomed by business groups, these measures are temporary and do not reduce the need for a more comprehensive review of the entire tax system.  A sound tax system is essential to Canada's competitiveness," added Ball.

The report notes some key issues that should be addressed:

  • Canada's tax system does not align with international trends nor does enough to promote global competitiveness.
  • Canada's tax system needs to do more to help businesses grow and innovate.
  • Questions remain about whether or not Canada's tax expenditures are achieving intended goals at the right cost, but it is clear they do make the system more complex.
  • Canada's personal tax system discourages compliance in many cases, and there may be better ways to deliver social benefits more efficiently and effectively.

The full report can be seen at