The last time that Canada had seen a comprehensive review was in 1966, during the Carter Royal Commission on Taxation, but it was not until 1972, that many of its recommendations were implemented. This took about a decade from the start of the Royal Commission. However, this is not to say that a more in-depth review of Canada’s tax reform would be all wrong, rather, it would be too much to accomplish if the review would be as all-encompassing as the Carter review.
Instead of focusing on the bigger picture, it would prudent, in this case, to focus on a few priority areas for the tax reform. The Senate Committee recommended that the government of Canada should undertake an independent and comprehensive review of the tax system, stating that the purpose is to reduce complexity, ensure economic competitiveness, and enhance fairness.
With all said and done, what should really be the focus of the tax reform?
Well, because of the recent “Paradise Papers” scandal, there should now be a comprehensive review of taxation of offshore income. The scandal revealed to us the fact that taxation of offshore income should be a main concern for tax reform in Canada. There should major improvements in the enforcement against tax evasion and the detection of serious tax avoidance strategies (which can be legal in nature, but very prone to abuse), such efforts require considerable international collaboration.
However, no specific details have been given by the Senate Committee with regards to a comprehensive review. This is turning out to be nothing more than just a delay tactic as it blatantly avoids a more thorough/thoughtful and probing and identification of what should be the areas for review and which ones are supposed to be placed as a major concern or priority.