Canada’s tax reform could start with small business changes: official

Wayne Long, an MP for Saint John—Kennebecasis and the secretary of state for the Canada Revenue Agency and financial institutions, has stated that Ottawa plans to address long-awaited tax code reform "one bite at a time." Changes for small businesses are high on the priority list. Long told The Canadian Press that the tax code has become overly complex, with the current version being twice the thickness of what it once was.

He emphasized that a total review of the tax code is essential. Long, along with Finance Minister François-Philippe Champagne, has been conducting pre-budget consultations across Canada this summer. The upcoming fall budget, the second under Prime Minister Mark Carney, is viewed as Chapter Two in the Liberal government's efforts to attract investment and stimulate growth after the U.S. tariff campaign.

The Liberals have already made some changes to the tax system on the corporate side, offering immediate tax writeoffs on new equipment, and on the personal side, cutting the lowest income tax bracket by one percentage point and planning a pilot project for automatic tax filing next year. The Liberals have pledged to conduct an "expert review" of the corporate tax system in the 2025 election campaign.

Current tax reform is long overdue, as 40 years have passed since the last major overhaul of the tax system, which occurred in the 1980s under Prime Minister Brian Mulroney. The current system is seen as straining the economy and deterring high-income individuals and successful companies from investing in Canada.