Toward a More Competitive Canadian Tax System

To be able to sustain broadly based economic growth in the rapidly changing global economy, Canadians must improve productivity. This will be difficult if Canada's tax burden puts us at an economic disadvantage. Comparisons with the United States, our neighbour to the south, demonstrate our need for improved competitiveness in various areas of taxation. Total Canadian taxation by all levels of government accounts for almost 47% of our gross domestic product, compared to just over 32% in the United States. How long can the Canadian economy and standard of living withstand this inequity?

The Canadian economy has a significant international dimension. Accordingly, Canada's tax system must be viewed in relation to the world economy, with particular attention to the United States, with which we conduct over 70% of our foreign trade. Almost 40% of our gross domestic product is derived from exports and about 20% of capital for our businesses is provided by foreign investors.