TAXES

The closest Canada has come to comprehensive tax reform occurred half a century ago. Since then, an ever-growing list of exemptions, deductions, tax credits and other set-asides have resulted in a tax system as riddled with complexity as it is susceptible to avoidance.

The 2021 campaign will make a bad situation even worse, with both the Liberals and Conservatives continuing to wield the tax code as a wedge to win votes. The NDP is the only major party proposing a comprehensive tax review. Presumably, the New Democrats don’t intend to push for what economists say Canada really needs: a broad debate about simplifying taxation to encourage investment and push up long-term productivity.

Such a debate would focus on eliminating tax credits and incentives in favour of lower rates and simplified rules. It would entail shifting the tax burden away from income – particularly corporate income – and toward consumption. And it would focus on allowing the provinces to increase sales taxes as Ottawa trims marginal income tax rates.

Canadians didn’t get that debate during this campaign. But to galvanize economic growth, it’s one that will need to start soon.