Senate Committee Recommends Review of Tax System and Immediate Action
On October 16, 2018, the Senate published a report titled: Canada: Still Open for Business? The report examines issues that affect the ability of Canadian businesses to compete internationally. The report, by the Standing Senate Committee on Banking, Trade, and Commerce, was produced as a result of hearing from many witnesses. Among the issues discussed were stalled energy projects, protection for intellectual property, and tax competitiveness.
Notably, the Committee recommended that the government establish a Royal Commission on Taxation to examine Canada’s tax system with the goal of improving the efficiency, simplicity, and international competitiveness of the system, and that the study by completed within the next three years. If this recommendation is acted upon, it will be the first examination of the tax system since the Carter Commission was appointed in 1962.
The Committee also recommended that the federal government act immediately to implement measures that would encourage companies to continue to invest in Canada, such as reduce the corporate income tax rate and temporarily allowing the full deduction of capital expenditures. With respect to fostering innovation and protecting intellectual property, the Committee recommended that the government expand the SR&ED and ITC program.
The full report is available on the Senate website.