Urgent Action is Needed to Fix a Canadian Tax System Stifling Economic Growth

Bold recommendations to accelerate investment, entrepreneurship and attract talent.

TORONTO, Oct. 7, 2025 /CNW/ - After years of economic stagnation in Canada and mounting pressures from U.S. trade policy and tax competitiveness, CPA Ontario says it's time to fix a tax system that's holding the country's economy back. A report released today, Tax Reform for Growth in Canada, details 20 recommendations to overhaul the tax system and supercharge competitiveness, productivity, and economic growth.

"The status quo isn't working, and with the Carney government releasing its first budget on November 4, bold tax reform must be part of our national agenda for building a stronger country," said Carol Wilding, FCPA, FCA, ICD.D, president and CEO, CPA Ontario. "With growing global pressure, we need to use every lever to unlock growth and raise the standard of living for all Canadians." 

As experts in tax and strategic advisors across every sector of the economy, Ontario's 105,000 CPAs have critical insight into how tax policy affects economic growth. Tax Reform for Growth in Canada is informed by consultation with CPAs, tax experts, and academic and policy research and recommends:

• Modernize innovation tax policy to support Canada's start-ups and scale ups by reforming the Scientific Research and Experimental Development (SR&ED) tax credit, introducing a capital gains rollover provision and a preferred corporate tax rate for domestic intellectual property (patent box).
• Improve Canada's business tax competitiveness by lowering general corporate income tax rates, removing tax barriers to small business scaling, and considering immediate expensing of capital investment.
• Align Canada's personal incomes tax rates and the income levels at which they apply with peer nations to encourage, attract, and retain Canada's best resource – its talent.
• Shift the tax mix to reduce Canada's reliance on economically harmful personal income and corporate income taxes and increase revenue from broad-based consumption taxes, while protecting low- and middle-income households through an enhanced GST credit or targeted transfers.
• Simplify the Income Tax Act to reduce uncertainty, complexity and compliance costs for all Canadians, including lower-income households and small businesses.

"CPAs are calling for change," said Wilding. "These recommendations, informed by consultation with Ontario CPAs, must be part of any pro-growth, pro-productivity agenda for Canada."

In a survey of Ontario CPAs, a resounding 88 per cent emphasized the importance of reforming the personal and corporate income tax system, with 84 per cent describing it as overly complex. And nearly two-thirds believe the tax system inhibits economic growth.

Read Tax Reform for Growth in Canada to learn more.

Quotes:
"If you are looking to incentivize long-term investing in the Canadian economy you can't keep creating temporary windows. Short-term measures just encourage people to make quick trades to capture the benefit, rather than building lasting investment in the economy." John McKenzie, FCPA, FCMA, CEO, TMX Group

"We're way too dependent on personal income tax and our rates are simply too high. I'd love to see us move toward the OECD average with higher consumption taxes." – Jamie Golombek, FCPA, FCA, Managing Director, Tax & Estate Planning, CIBC

"Right now, we're losing valuable IP to other jurisdictions. A patent box could bring some of that back to Canada, so we at least get some tax revenue from it instead of watching it all flow offshore." – John Ruffolo, FCPA, FCA, Founder and Managing Partner, Maverix Private Equity

About CPA Ontario

CPA Ontario governs and regulates CPAs and accounting firms in Ontario. We grant CPA designations and public accounting licenses. We enforce the highest professional and ethical standards, provide professional guidance, and support the continuing development of our members. We educate and assess students, so they are ready for market demands. We enable mobility of CPAs through inter-provincial and international agreements. We are a community of over 105,000 CPAs in Ontario. 

SOURCE CPA Ontario

Media Contact: Kathryn Hanley, Vice-President, Communications, [email protected]