Canada’s tax system is becoming less competitive on the global stage, according to the 2024 International Tax Competitiveness Index, sparking calls for urgent tax reform. The Canadian Taxpayers Federation (CTF) is urging politicians to prioritize tax relief to prevent further economic decline."Canada is falling behind many of our peers on tax competitiveness, and this report should be a five-alarm siren to stop hiking taxes," said Franco Terrazzano, CTF Federal Director. "Canadians know our economy is not firing on all cylinders, and that’s because our governments are taking too much money from families and businesses."The report, compiled by the Tax Foundation, assesses tax systems across 38 countries in the Organisation for Economic Co-operation and Development (OECD). Key findings highlight Canada’s slipping rank:17th overall in tax competitiveness, down two spots from last year.31st in individual tax competitiveness.26th in business tax competitiveness.25th in property tax competitiveness.8th in consumption tax competitiveness.One of the key areas where Canada lags behind is capital gains taxation, which the report notes is "well above" the OECD average. The country also suffers from higher business taxes and the implementation of a digital services tax, which further erodes its global standing."This report shows high capital gains taxes are a reason Canada is falling behind on tax competitiveness," added Terrazzano. "Prime Minister Justin Trudeau is wrong to hike capital gains taxes. We need politicians to encourage success in Canada and stop punishing our doctors, entrepreneurs, and people saving for retirement."Despite the shortcomings, the report also acknowledged some strengths of Canada’s tax system, including the absence of wealth, estate, and inheritance taxes."A bright spot for Canada’s competitiveness is that we don’t have a wealth tax, and politicians should avoid this damaging tax," said Terrazzano. "Instead of more government spending, politicians should let families and businesses keep more of their money to grow the economy."The call for tax reform comes at a time when Canada’s economy is facing numerous challenges, and the CTF warns that without immediate action, the country risks falling further behind in the global marketplace.The full report from the Tax Foundation can be found here.
Canada’s tax system is becoming less competitive on the global stage, according to the 2024 International Tax Competitiveness Index, sparking calls for urgent tax reform. The Canadian Taxpayers Federation (CTF) is urging politicians to prioritize tax relief to prevent further economic decline."Canada is falling behind many of our peers on tax competitiveness, and this report should be a five-alarm siren to stop hiking taxes," said Franco Terrazzano, CTF Federal Director. "Canadians know our economy is not firing on all cylinders, and that’s because our governments are taking too much money from families and businesses."The report, compiled by the Tax Foundation, assesses tax systems across 38 countries in the Organisation for Economic Co-operation and Development (OECD). Key findings highlight Canada’s slipping rank:17th overall in tax competitiveness, down two spots from last year.31st in individual tax competitiveness.26th in business tax competitiveness.25th in property tax competitiveness.8th in consumption tax competitiveness.One of the key areas where Canada lags behind is capital gains taxation, which the report notes is "well above" the OECD average. The country also suffers from higher business taxes and the implementation of a digital services tax, which further erodes its global standing."This report shows high capital gains taxes are a reason Canada is falling behind on tax competitiveness," added Terrazzano. "Prime Minister Justin Trudeau is wrong to hike capital gains taxes. We need politicians to encourage success in Canada and stop punishing our doctors, entrepreneurs, and people saving for retirement."Despite the shortcomings, the report also acknowledged some strengths of Canada’s tax system, including the absence of wealth, estate, and inheritance taxes."A bright spot for Canada’s competitiveness is that we don’t have a wealth tax, and politicians should avoid this damaging tax," said Terrazzano. "Instead of more government spending, politicians should let families and businesses keep more of their money to grow the economy."The call for tax reform comes at a time when Canada’s economy is facing numerous challenges, and the CTF warns that without immediate action, the country risks falling further behind in the global marketplace.The full report from the Tax Foundation can be found here.
