OTTAWA, ON: The Canadian Taxpayers Federation is calling on governments to cut income and business taxes following the release of the Tax Foundation’s 2026 International Tax Competitiveness Index, which shows Canada lagging behind on both measures.

“The report shows Canada falling behind the United States on business and income taxes and that should be a real wake-up call for our politicians,” said Franco Terrazzano, CTF Federal Director. “Canadian workers and businesses are fighting to survive tariffs and our governments are making it harder by imposing less competitive business and income taxes than the Americans.

“We need income and business tax cuts now.”

The Tax Foundation’s 2026 International Tax Competitiveness Index compares tax systems for 38 countries that belong to the Organisation for Economic Co-operation and Development.

Canada ranks a dismal 28^th out of 38 countries on individual taxes. Canada ranks 17^th on business taxes. 

Canada falls behind the U.S. on both measures. The U.S. ranks 17^th on individual taxes and 8^th on business taxes.

Overall, Canada ranks 15^th, behind 14 other OECD countries.

Canada ranks relatively well on consumption taxes, coming in 8th. The report also notes “Canada does not levy wealth, estate or inheritance taxes.” 

Weaknesses of Canada’s tax system include capital gains taxes that are “well above” the OECD average and a business tax rate that is “above average among OECD countries,” according to the report.  

“The fastest, simplest and easiest way to make life more affordable and our economy more competitive is for politicians to stop taking so much money in the first place,” Terrazzano said. “Governments need to cut income and business taxes so workers keep more of their paycheques and businesses keep investing here instead of moving south of the border.”

You can find the Tax Foundation’s 2026 International Tax Competitiveness Index here.