Tax review is badly needed

The tax reforms federal Finance Minister Bill Morneau has proposed are a welcome, if modest, step toward realizing his oft-touted top goal of tax fairness. The government has set its sights on three iniquitous tax breaks that allow wealthy individuals to avoid paying their fair share. They should be scrapped.

But such loopholes, which have proliferated in recent decades, are everywhere in Canada’s sprawling tax code. We hope the sensible package now before Canadians is not all the Trudeau Liberals have to offer on this issue, but is instead a down payment on the comprehensive reform we need and they promised.

The three measures now being floated all aim to limit the ability of high earners to use the small-business tax system to dodge paying their share on income. Taken together, the package could save Ottawa hundreds of millions of dollars annually.

This is a start, but it likely won’t get Morneau even a tenth of the way toward his stated aim of saving $3 billion annually through a review of so-called tax expenditures.

The promised review is crucial. Over the past century, Canada’s tax code has grown into an unwieldy mess. The code is now roughly 200 times longer than it was in its original form.

It’s been more than 50 years since the Carter Commission, the last time Ottawa took a comprehensive look at our tax system. Since that time, Canada’s tax code has expanded exponentially in an often thoughtless, piecemeal fashion. We’ve lost track of whether our tax system is doing the job it is intended to do. In taking another look, we will no doubt find significant savings to be had and injustices to redress.