Strong Business Call for Comprehensive Tax Reform
A fresh survey commissioned by KPMG reveals an overwhelming appetite among Canada’s business community for a sweeping review of the nation’s tax framework. The poll, which captured the views of 346 owners and decision‑makers from firms generating between $10 million and over $1 billion in annual revenue, found that almost nine in ten respondents believe a full‑scale overhaul is essential. “I think the findings are pretty clear in saying that there is considerable business appetite for tax reform in this country,” said Lachlan Wolfers, KPMG’s national leader for law and global head of indirect taxes, in an interview. The sentiment is echoed across the spectrum of corporate Canada, with a clear consensus that the current system is too complex, lacks competitiveness, and fails to deliver adequate incentives for investment.
Key Demands from the KPMG Survey
The KPMG 2026 federal budget survey, conducted online by Angus Reid between 22 September and 2 October, uncovered several priority areas for reform. Eighty‑eight per cent of respondents want the tax system to provide more incentives for investment, while 85 per cent call for simplification to cut red tape. Competitiveness is a close third, with 82 per cent urging a more competitive regime. Personal taxation is also a focal point: 81 per cent favour reductions, and 63 per cent advocate lower corporate rates. These figures align with a recent series of reports by The Globe and Mail titled “Tax and Effect,” in which a host of business and policy experts warned that Canada’s tax code has become overly burdensome. They argue that removing carve‑outs and streamlining the system would attract capital and stimulate growth.
A recurring recommendation is to fund lower personal and business taxes by shifting toward consumption taxes and trimming the myriad targeted tax breaks—what are officially known as tax expenditures. Such measures are politically attractive because they can be aimed at specific voter groups and are generally cheaper than broad‑based cuts. However, successive governments have been reluctant to pare back these “boutique” provisions, which have accumulated over decades to create what many describe as a “Frankenstein’s monster” of a tax code.
Government’s Recent Tax Moves and Future Outlook
Finance Minister François‑Philippe Champagne has not yet set a date for the 2026 federal budget, but last year’s fiscal plan was unveiled in early November. The government made three budget‑style tax announcements last month, beginning with an extension of a gas‑tax break that was due to expire on Labour Day. At the Canada Investment Summit—hosted by Prime Minister Mark Carney in Toronto in September—authorities unveiled a “productivity mega deduction” estimated at $36 billion over five years. Mr Champagne also announced that the Canada Revenue Agency will fast‑track advance income‑tax rulings for investments of $1 billion or more, helping firms better gauge their tax obligations.
The Liberal Party’s 2025 platform pledged that a Mark Carney‑led government would “conduct an expert review of the corporate tax system based on the principles of fairness, transparency, simplicity, sustainability, and competitiveness.” When asked about the status of that promise during a June interview with The Globe and Mail, Mr Champagne was non‑committal, stating he was more interested in concrete proposals for change. “I know what the issues are. I’m a man of action,” he said as he launched pre‑budget consultations. His spokesperson, John Fragos, reiterated on Wednesday that the government remains focused on action, pointing to the recent wave of tax announcements. “We will continue to work with our partners and industry to advance measures that better advance Canada’s tax competitiveness,” he said in an email.
Mr Wolfers of KPMG believes business leaders are looking for a more substantial overhaul than what has been announced so far. He doubts that the current budget will deliver such a comprehensive package, given the country’s preoccupation with trade tensions with the United States. He predicts any new trade deal with Washington will likely materialise after the November midterm elections but before the year’s end. “Until this is cleared, you’re not going to see realistic discussions on major tax reforms really coming to the fore. That’s how I see the two issues linked,” he observed.
Why It Matters
The KPMG findings underscore a pivotal moment for Canadian economic policy. With business confidence hinging on a tax system that is both competitive and straightforward, the government’s ability to deliver meaningful reform will shape the nation’s capacity to attract investment, foster innovation, and sustain growth amid a volatile global trade environment. The looming trade negotiations with the United States add urgency: any delay in addressing tax complexity could erode Canada’s attractiveness as a destination for capital, while a well‑designed tax overhaul could serve as a strategic lever to bolster productivity and secure a more resilient economic future.
