Economists urge sweeping tax overhaul to shield Canada from U.S. tariff pressures

Ottawa’s Prime Minister Mark Carney describes a wave of U.S. tariffs as an attack on Canada, leading the government to roll out temporary support for affected firms and workers. However, a coalition of economists and senior bank executives contend that short-term measures are insufficient and that a comprehensive tax reform is essential to “Trump-proof” the economy. Their blueprint calls for cuts to corporate and personal income taxes, arguing that lower rates would spur investment, increase exports and raise living standards.

They also point to Canada’s heavy reliance on personal income taxes—11 % of GDP in 2010 rising to 13 % in 2023—as a competitive disadvantage. Additional recommendations include dismantling inter-provincial trade barriers, loosening foreign-ownership caps and accelerating project approvals, all aimed at diversifying trade beyond the United States.