The Big Bang Tax Reform to Get Canada Back on Track
After a decade of stagnant per-capita growth, the C.D. Howe Institute is urging a bold restructuring of Canada's federal tax system, warning that "high marginal tax rates on middle- and upper-income earners discourage work, risk-taking, and the retention of talent — precisely when stronger growth is needed." The proposed "big bang" reform would lower personal and corporate income taxes, introduce a $10,000 tax allowance to reduce complexity, and overhaul investment incentives — offset through either a progressive employer payroll levy or a modest GST adjustment to remain revenue-neutral. The report estimates these changes could raise investment by $140 billion and lift GDP by roughly 2.5%, with the authors concluding that "Canada cannot tax its way to stronger growth if the system penalizes investment, innovation, and effort."
