August Poll Results: Pros Want a Review of Canada’s Tax System

Beth Graddon

With global trade uncertainties and other factors, including debt, new taxes and demographic change all putting pressure on Canadians’ ability keep their heads above financial waters, tax and financial advisors who participated in our August poll are sending a strong message in this pre-election time: Canadians are finding things unaffordable.

Our August poll asked, “In your view, have recent federal tax changes contributed to economic resilience and powerful competition in Canada?” A total of 217 people, or 86.8% of respondents said “no”. Only 33 people, or 13.2% thought that things were looking up due to recent tax changes.

That sentiment supports findings in a recent Fraser Institute Report which indicated that Canadian families are spending more on taxes than ever before. In 2018, an average of $39,299 went to taxes, totalling 44.2% of the average Canadian family income, which is more than they spent on basic life necessities.

In the Knowledge Bureau’s July poll many tax and financial advisors voice concerns about inequity in Canada’s tax system. This comes at a time when there’s already a risk of a recession on the horizon, and the pressures from the increasingly unaffordable housing costs that directly impact the average Canadian’s ability to afford to live well; all important considerations that affect Canada’s economic resilience, a topic that is the theme of the 2019 Distinguished Advisor Conference (DAC) this November 10-13 in Puerto Vallarta, Mexico.

Here’s what poll respondents had to say:

“Another Tax Guy” outlined why this is such a complex question to answer: “I think the simple answer to the question is no. Our economic system is effectively focused in three main sectors. To establish economic resilience, our country needs to expand into other economic areas. Taxation and competition are factors that can hinder or stimulate such expansion. Going overboard on reducing taxes will end up in a future deficit. However not reducing taxes enough will limit expansion. Conceivably reducing tax rates can actually increase total tax revenue by virtue of more competition and the entry of more businesses into our market. Finding that sweet spot has always been a challenge for all governments.”

Trevor said, “No, if one looks at how the ordinary working-class Canadians are coping with the Liberal government’s tax changes. Clearly, the government’s focus is to “increase” taxes, through clawbacks, and eliminations of some non-refundable tax credits that are important to most Canadians with families.”

Nancy referenced the imbalance outlined in the Fraser Institute report statistics: “I read somewhere that Canadians now pay more in tax than they do on living expenses. That is not good.”

Lenka pointed out how this is a global issue: “Consider how many people own most of world wealth today. Most of the so-called developed countries have been gradually losing their middle class and acquiring a new social class of working poor.”

Ron said, “The only change the federal tax changes have brought is reduced lifestyle and increased burden for John and Jane Canadian-Taxpayer. Again.”

D. Burns simply stated, “Not likely, has anything helped?”

And finally, Jim summed it up with a strong sentiment: “Recent changes are a disaster for all Canadians. Those without any economics education just don’t realize it yet.”

Ahead of the upcoming election, we’re asking an important follow-up question: “Do you believe this is the right time for a meaningful tax reform in Canada?" Cast your vote and add your voice to the conversation.

Additional educational resources: The registration deadline for DAC in Puerto Vallarta, Mexico November 10-13 is coming up on September 15. Register today and learn how to better advocate for an equitable tax system, defend your clients against economic uncertainty, and make your contribution to a resilient Canadian economy.

Can’t make it? Study with us in 4 Canadian cities at the CE Summits this November 4-7 where special guest speakers Larry H. Frostiak and Doug Nelson, B.Comm. (hons.), CFP, CLU, MFA, CIM, RWM will be joining Evelyn Jacks to discuss the theme year-end tax planning, with a focus on family business and retirement income planning. Visit the detailed agenda for more information.

If you are bound to your home or office – take an online tax program – we recommend the DFA-Tax Services Specialist™ designation to get a handle on Canadian taxation.

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