Tax Reform: 96% Say Canada Needs an Overhaul

Is comprehensive personal and corporate tax reform necessary to make Canada’s economy stronger in response to trade wars? Knowledge Bureau readers responded with an overwhelming yes. In the September Knowledge Bureau Report poll, 96% of respondents said comprehensive tax reform is necessary, while just 4% said no. Why? Read on to find out!

The comments suggest the concern goes well beyond Canada’s response to current trade pressures. Readers pointed repeatedly to the complexity of the Income Tax Act, the cost of tax compliance, CRA service and administration, and the need for a tax system that is simpler and more efficient for individuals and businesses.

Complexity is Taking its Toll

Several respondents argued that years of incremental changes have produced a system that is increasingly difficult for taxpayers and tax professionals to navigate.

“Canada’s tax system is overly complex and burdensome. When even tax professionals are looking at new policies and asking, ‘What does that even mean?’, you know we’re in trouble. Meaningful reform would require cooperation between Finance, CRA, tax practitioners, lawyers and international tax professionals—and would likely require looking beyond income tax to Canada’s other tax systems as well.”
– Alex

Alex also argued that reform should extend to CRA itself, including improvements to training, accountability, technology, accuracy and timeliness.

Robert Litschel similarly pointed to the financial and administrative burden created by the current system:

“Canada’s tax regime is very complicated and costly for both government and individuals and corporations to administer. Tax reform that makes completing and paying income taxes more efficient and cost-effective should be a goal of any government. Taxpayers have been complaining for years about the complexity of the system. Let’s get it reformed and better suited to use.”
– Robert Litschel

He added that while reform may not resolve Canada’s trade challenges directly, improving the tax system would still be worthwhile.

CRA Reform is Part of the Conversation

For some respondents, reforming tax legislation is only part of the answer. They also want changes to how the system is administered.

“An overhaul would be nice, but more importantly, overhauling CRA to ensure that they deliver audit responses faster and with fewer errors would help every Canadian taxpayer.” – Gerry Campbell

“Perhaps if we had fewer but better-trained CRA staff, significant funds could be saved and taxpayers could get quicker results because staff know what they are doing. The last ‘simplification’ had the T1 go from four pages to eight. A definite overhaul is needed.” – Pat Gamborg

“An overhaul of the system that would simplify taxation would improve efficiency for taxpayers, both personal and corporate. There should really be a focus on making Canada’s economy stronger, regardless of the situation of the day.”
– Derek T

Can Comprehensive Reform Actually Happen?

While respondents overwhelmingly agreed on the need for reform, some were much less optimistic about whether governments would undertake it.

Gaetan Ladouceur, who said tax reform has been a concern throughout more than 40 years as an accountant, pointed to the political difficulty of undertaking comprehensive change. He cited the mid-1980s reforms led by then-Finance Minister Michael Wilson as one of the closest precedents for broad reform, while noting that complexity subsequently returned to the system.

“Do we need reform? Absolutely. But electing a political leader that will actually do it is currently just a fantasy.” – Gaetan Ladouceur

“The CPA Tax Practitioners Committee has been calling for a total review of the Act, with various concerns outlined to CRA and the Ministry of Finance.” – Joseph A. Truscott, CPA

The September poll provides a striking snapshot of sentiment among Knowledge Bureau readers. While respondents differ on where reform should begin—and how realistic comprehensive reform may be—the result itself is decisive: nearly 96% believe Canada needs comprehensive personal and corporate tax reform to strengthen the economy.

This month we’re asking: “In your view, should Canadians be able to write off more of their out-of-pocket medical expense costs? What amount would be appropriate?” Weigh in here!