Canadian Chamber reveals 30 simple changes in tax policy to help Canadians and businesses through COVID

While a more comprehensive report to be published early next year will set out ideas for long-term structural reform, the Canadian Chamber is releasing 30 specific recommendations for the government to enact now to help Canada recover from the pandemic’s impact.
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(OTTAWA) – December 8, 2020 –After years of calling on the federal government to conduct a full review of the tax system, the Canadian Chamber of Commerce took matters into its own hands to explore tax reform options. Today it revealed the early results.

“Reforming Canada’s tax system can help the economy recover, and our tax panel experts have provided some initial steps that can be taken right now. Canadians and the businesses employing them need our government to build a competitive and growth-focused tax system, because any true recovery must, and inevitably will, be led by business,” said Perrin Beatty, President and CEO, Canadian Chamber of Commerce.

After consultations with a broad mix of Canadians, businesses and tax practitioners on how to harness Canada’s tax system to foster job retention and growth, the Canadian Chamber is sharing what its panel heard  is needed now.

While a more comprehensive report to be published early next year will set out ideas for long-term structural reform, the Canadian Chamber is releasing 30 specific recommendations for the government to enact now to help Canada recover from the pandemic’s impact.

“There are many small, simple actions the federal government can take right now that together will go a long way to helping Canadians and businesses cope with the pandemic’s economic fallout,” said Patrick Gill, Senior Director of Tax and Financial Policy for the Canadian Chamber. “There’s no reason the government can’t use tax policy as a lever to create better business conditions today to spur a faster recovery tomorrow. While it may be still too early to move forward with more far-reaching structural tax reform, Canada  can’t afford to let its tax system keep falling behind its G7 competitors.”

The Chamber’s simple tax reform suggestions to help Canadians and businesses include:

Support Canadians by:

• Automating filing for simple returns
• Enhancing the deduction for childcare
• Simplifying the work-space-in-the-home deduction
• Improving the use of electronic communications, includingthe broader use of email and permitting documents to be electronically attached to filings.

Support small employers by:

• Introducing a temporary GST/HST holiday to spur local purchases
• Demonstrating continued leniency with small business audits during the pandemic
• Simplifying rules around income-splitting with children
• Removing tax disincentives that arise on the sale of a small business to family members.

Support large employers by:

• Processing work-space-in-the-home deductions without a T2200 form
• Deferring the CRA’s right to collect disputed tax amounts
• Increasing deductibility on capital expenditures in the year incurred
• Accelerating the ability to turn tax losses into cash.

“As political leaders consider their next steps to foster recovery and prosperity post COVID-19, they would be well advised to consider the aggregate voices of everyday Canadians, tax experts and business leaders captured in the Canadian Chamber’s independent review,” said Dr. Trevin Stratton, Chief Economist and VP of Policy for the Canadian Chamber.

To review all 30 recommendations, click here.

The roundtables were conducted between August and November 2020, with over 450 participants. A panel of leading tax and business experts helped inform The Canadian Chamber’s tax review process. For more information about the Canadian Chamber’s independent tax review, visit www.thinkgrowth.ca