The Northern Advantage: Why Canada needs a second gateway beyond Lower Mainland

OTTAWA — Prime Minister Mark Carney’s administration plans to address overdue tax code reform, with small business relief a key priority. Tax experts and advocates concur that long overdue simplification of Canada’s tax system is crucial. Wayne Long, MP for Saint John—Kennebecasis and secretary of state for the Canada Revenue Agency and financial institutions, told The Canadian Press that the current tax code is overwhelmingly complex, with successive layers of legislation adding to its bulk.

Long argues that a comprehensive review of the tax code is necessary. The Liberal government, in its second term under Prime Minister Carney, sees tax reform as a critical component of its efforts to attract investment and promote growth following the U.S. trade disputes. Long emphasized that the upcoming fall budget, the second delivered under Carney’s leadership, must address the issues raised by small businesses, which he described as being "strangled" by the current tax system.

The Liberals have made minor changes to the tax system, such as offering immediate tax writeoffs for businesses investing in capital and reducing the lowest income tax bracket. However, Finance Minister François-Philippe Champagne has emphasized that the government plans to conduct an "expert review" of the corporate tax system.

Conservative finance critic Michael Chong contends that the Liberal government has only made small changes and has yet to take on the challenge of comprehensive tax reform. Chong argues that decades of incremental changes, like the introduction of the goods and services tax in the 1980s, have left the current system outdated and restrictive.

He calls for a task force to recommend ways to modernize the tax code. Tax experts agree that meaningful reform is a lengthy and potentially politically challenging process, but they emphasize the importance of removing complexity and simplifying the tax code.