With the income tax deadline looming, Canadians challenged by an increasingly complex tax system

“Canadian families and businesses incur significant costs to comply with the tax system including time and direct spending on accountants, lawyers and computer software packages. A key factor driving these costs is the complexity of our tax system,” said Charles Lammam, director of fiscal studies at the Fraser Institute and co-author of Measuring Tax Complexity in Canada. The study aims to quantify just how byzantine Canada’s tax system has become. For example, between 1990 and 2014, the text area (the number of pages multiplied by the size of the pages) occupied by the federal Income Tax Act increased to 1,575,537 cm2 from 974,050 cm2. Expressed differently, Canada’s printed tax laws now cover 62 per cent more space than they did in the 1990s. Other indicators examined in the study include:

• Administrative documents: From 2001 to 2011, the federal personal income tax guide (for Ontario)— a document which provides information, instructions, and references for tax preparers — increased in size by 25 per cent, to 70 from 56 pages.
• Tax legislation: The ever-rising number of court cases on Goods and Services Tax (GST)-related legislation suggests a growing intricacy in Canada’s sales’ tax laws. In 2011 there were 499 court cases on GST matters —up from 320 in 1993.
• Tax expenditures: From 1991 to 2011, the number of personal income tax expenditures—which include the credits, deductions, exemptions and exclusions available to Canadians— increased to 123 from 105. The number of corporate tax expenditures rose to 64 from 48.

“What’s clear is that all indicators point to an increase in federal tax complexity for Canadian families, businesses and even governments. A worthwhile goal is to simplify the tax system, making it easier to understand and less expensive in time and money. Lammam said. Charles Lammam, Director of Fiscal Studies, Fraser Institute