Ottawa plans to begin a long-awaited overhaul of Canada’s tax code by addressing measures affecting small businesses, a Liberal MP involved in federal budget consultations said Friday.
Steady, staged approach to reform
Wayne Long, the member of Parliament for Saint John—Kennebecasis and secretary of state for the Canada Revenue Agency and financial institutions, told The Canadian Press the government will take a measured, step-by-step approach to tax reform. He said a full-scale review is necessary but will be tackled “one bite at a time,” with the upcoming fall budget expected to contain elements of that work.
“When you say the word tax code to people, everybody rolls their eyes. Everybody’s like, ‘Oh, the tax code used to be one book thick, now it’s two books thick. We just keep piling on,’” Long said.
Long framed the forthcoming budget — described as “chapter two” of the Liberal agenda since Mark Carney took the prime minister’s office — as an opportunity to refine Canada’s tax framework to attract capital and foster growth after the disruption caused by recent international trade friction.
Focus on competitiveness and foreign capital
According to Long, the federal government has heard from at least one unnamed “major international player” that they would consider increasing investment in Canada, but only if Ottawa revises some tax and investment governance features. The MP said other jurisdictions sometimes present a more user-friendly environment for capital, and Ottawa needs to lower barriers to make Canada more competitive.
The comments come as the Liberals continue pre-budget consultations across the country alongside Finance Minister François-Philippe Champagne. Over the last year, the government has implemented several tax changes, but stakeholders and tax experts reached by media organisations have argued that deeper simplification and reform of the tax code is overdue.
Small businesses as the opening salvo
Targeting small-business provisions first makes pragmatic sense: those measures affect a broad swath of Canadian entrepreneurs and can be adjusted without waiting for the political consensus needed for sweeping changes. It is also a domain where technical revisions could yield visible results for constituents ahead of larger structural reform.
- Incremental reform: The government plans staged changes rather than an immediate, comprehensive rewrite.
- Small-business priority: Early changes will centre on provisions that affect small and medium-sized enterprises.
- Investment signalling: Federal officials say revisions aim to attract greater international capital.
While specifics were not disclosed, Long’s remarks signal the government’s appetite to address issues that critics have long identified: complexity, compliance burdens and perceived competitiveness disadvantages relative to other jurisdictions.
| Actor | Role |
|---|---|
| Wayne Long | MP; secretary of state for the Canada Revenue Agency and financial institutions |
| François-Philippe Champagne | Finance minister (leading pre-budget consultations) |
| Mark Carney | Prime minister (referred to as having delivered chapter one) |
Implications for businesses and investors
For small-business owners, adjustments to tax provisions could ease administrative costs or clarify rules that affect incorporation, income attribution and intergenerational transfers. For international investors, the government’s stated aim is to make Canada a more straightforward and attractive destination for capital.
Rewriting tax law is politically and technically challenging. Even with an incremental approach, Ottawa will need to balance revenue implications, fairness across taxpayers and the desires of businesses for simplicity. The government’s consultations this summer are intended to gather input to shape those trade-offs ahead of the fall fiscal plan.
As the budget process moves forward, market participants and tax professionals will be watching for concrete measures aimed at small businesses and any indication of broader reforms to come. The administration’s ability to translate consultation feedback into actionable policy will determine whether investors who have raised concerns about Canada’s tax environment follow through on promises to increase their commitments here.
