Canadians and businesses are critical of the country’s tax system, calling it confusing, unfair, and overly taxing, according to a survey commissioned by the Canada Revenue Agency.
“Impressions of Canada’s tax system focused on its complexity, lack of fairness, and rates of taxation, which were characterized as high,” said the report, 2023-2024 conducted by Phoenix Strategic Perspectives for the CRA.
The findings were based on responses from 26 focus groups nationwide, comprising a total of 187 taxpayers, small business leaders, and tax intermediaries such as bookkeepers and accountants. The CRA paid approximately $170,000 for the survey, which was first covered by Blacklock’s Reporter.
The qualitative survey found overall impressions of the Government of Canada and the tax system were “mostly critical.” When asked to describe the tax system, participants used terms like “complex,” “complicated,” “confusing,” and “overwhelming,” while also highlighting its high tax rates and perceived unfairness. Some respondents said the system is particularly challenging for new Canadians.
Participants described taxes as unfair or too high, a view more common among taxpayers than small business representatives and intermediaries. Terms like “heavy,” “heavily taxed,” “overtaxed,” and “gouged” were used to express this sentiment. Some participants also suggested that Canadians do not receive services proportional to the taxes they pay, and that taxes are too high relative to average earnings. A few expressed frustration with how tax dollars are spent, describing it as “annoying.”
Most participants said the CRA could improve transparency in collecting income tax and delivering benefits. Key suggestions included better outreach, using plain language, directing people more effectively to online resources, consolidating benefit or credit information in one place, and simplifying eligibility requirements.
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The focus group surveys were conducted between June and July 2024, around the time Parliament passed a ways and means motion to increase capital gains taxes. The change, announced in the government’s April budget, would raise the taxable portion of companies’ capital gains from one-half to two-thirds. The policy would also apply to individuals who earn more than $250,000 in capital gains.
After Gov. Gen. Mary Simon granted the Liberals’ request to prorogue Parliament on Jan. 6, the federal government announced that the CRA will continue administering the capital gains tax changes proposed in Budget 2024, even though they haven’t passed in Parliament.
Prime Minister Justin Trudeau announced the prorogation of Parliament until March 26, along with his intention to step down as Liberal Party leader and prime minister.
