The right fiscal incentives key to boost economic growth and alleviate fiscal pressures

Tax incentive modernization would promote more innovation, commercialization of ideas, competitiveness and certainty which are key elements to attracting investment, capital and talent.

OTTAWA, Oct. 8, 2014 /CNW/ - Canada's global competitiveness would be improved with a revitalization of its system of fiscal incentives, according to the first publication of The Conference Board of Canada's newly launched Centre on Tax Analysis, Fiscal Incentives, and Competitiveness (TAFIC).

"Over several decades, Canada's system of taxation and targeted fiscal expenditures has become a web of complex, often-competing policies, one that is in need of re-evaluation and reform," said Glen Hodgson, Senior Vice-President and Chief Economist at The Conference Board of Canada.  

TAFIC gathered senior business leaders earlier this year, and they suggested that tax reform in Canada should focus on three priorities: removing the barriers the system creates to innovation and competitiveness, simplifying a complex system to provide more certainty, and making it more balanced to reflect our modern economy and demographics.

HIGHLIGHTS

• The right fiscal incentives would improve productivity performance and economic growth prospects in Canada.
• Business leaders have identified three areas to target for reform: system complexity, barriers to innovation and competitiveness, and inequality and lack of trust in the system.
• The tax system's complexity has been built up over decades, without consideration to the modern digital and electronic age.

The first TAFIC report, Examining Fiscal Incentives – The Need for Tax Reform: Perspectives of Business Leaders, suggests that Canada's economic growth and competitiveness in world markets would benefit from a review of the built-in inefficiencies of its system of fiscal incentives, to ensure that the overall system is as effective and efficient as possible.

"Canada continues to provide an attractive business tax climate, and tailoring fiscal incentives and tax policies to reflect a more modern economy would allow us to continue to compete globally, fuel business innovation to improve our productivity and increase domestic commercialization. This will create and promote a sustainable economy with interesting jobs and careers for Canadians," said Elio Luongo, Managing Partner of Tax, KPMG in Canada, a Champion investor of TAFIC.

TAFIC was created to provide Canadian business leaders and policy-makers with credible, leading-edge quantitative research on all aspects of the Canadian system of taxation and fiscal incentives. Using sophisticated econometric tools to measure the impact of proposed reforms on the Canadian economy, TAFIC publishes evidence-based and accessible reports on key issues related to taxation and fiscal incentives.  

SOURCE: Conference Board of Canada

Yvonne Squires, Media Relations, The Conference Board of Canada, 255 Smyth Rd., Ottawa, ON K1H8M7, Tel.: [phone] ext. 221, E-mail: [email protected]; For those of you interested in broadcast-quality interviews for your station, network or on online site, The Conference Board of Canada now has a studio capable of double-ender interviews (line fees apply) or we can send you pre-taped clips upon request.