OTTAWA, ON: The Canadian Taxpayers Federation is calling on politicians to prioritize tax relief in response to the 2024 International Tax Competitiveness Index, which shows Canada’s tax system is becoming less competitive.

“Canada is falling behind many of our peers on tax competitiveness and this report should be a five-alarm siren to stop hiking taxes,” said Franco Terrazzano, CTF Federal Director. “Canadians know our economy is not firing on all cylinders and that’s because our governments are taking too much money from families and businesses.”

The Tax Foundation’s 2024 International Tax Competitiveness Index compares tax systems for 38 countries that belong to the Organisation for Economic Co-operation and Development.  

Key findings from the report include:

• Canada ranked 17^th (out of 38) on overall tax competitiveness, which is two spots worse than last year’s rank
• Canada ranked 31^st on individual tax competitiveness
• Canada ranked 26^th on business tax competitiveness
• Canada ranked 25^th on property tax competitiveness
• Canada ranked 8^th on consumption tax competitiveness

Weaknesses of Canada’s tax system include taxing capital gains “well above” the OECD average, higher business taxes than the OECD average and implementing a digital services tax, according to the report. 

“This report shows high capital gains taxes are a reason Canada is falling behind on tax competitiveness and it’s more proof Prime Minister Justin Trudeau is wrong to hike capital gains taxes,” Terrazzano said. “We need politicians to encourage success in Canada and stop punishing our doctors, entrepreneurs and people saving for retirement.”

The report notes “some strengths of the Canadian tax system” include the fact “Canada does not levy wealth, estate, or inheritance taxes.”

“A bright spot for Canada’s competitiveness is that we don’t have a wealth tax and politicians should avoid this damaging tax,” Terrazzano said. “Instead of more government spending, politicians should let families and businesses keep more of their money to grow the economy.”

You can find the Tax Foundation’s 2024 International Tax Competitiveness Index here.