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If all you have is a hammer, everything starts to look like a nail.

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That’s never been truer than in the realm of Canadian tax policy, especially under the governing Liberal Party of the past 10 years. Whether the issue (the “hammer”) has involved climate alarmism, housing challenges, “intergenerational fairness,” taxing the rich, digital disruption, etc., the instinctive political response has been predictable: tax it or tax it more (the “nail”).

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The carbon tax is the most obvious example, but the list is long: luxury taxes; digital services taxes; the now-abandoned capital gains inclusion rate hike; the four per cent increase in tax rates for the so-called rich in 2016; numerous and silly housing tax measures (such as the flipping tax and the prohibition of deductions on short-term rentals in certain instances).

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All of these are not signs of thoughtful, evidence-based policymaking. They’re symptoms of a deeper problem: a government that views taxation less as a tool of sound economic stewardship and more as a blunt ideological instrument for social engineering and political messaging.

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The Liberals are most certainly not interested in change since they want to continue using taxation policy as a blunt political instrument.

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The Liberals’ election platform only reinforced this concern. Rather than committing to comprehensive tax reform (such as the Conservatives did), they proposed to “conduct an expert review of the corporate tax system based on the principles of fairness, transparency, simplicity, sustainability and competitiveness.”

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That sentence might sound good, especially if you have a cursory understanding of taxation policy. But read it again. Can you tell me what it means? I certainly have no idea what it means, but I never like it when “fairness” and taxation policy are used in the same sentence by political parties. The sentence, however, certainly doesn’t promise a comprehensive tax review or reform.

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Here’s why. Total revenues for the federal government were $459.5 billion for the 2023-24 fiscal year. Corporate tax revenues were $82.5 billion, 17.9 per cent, of that total; personal tax revenues were $217.7 billion, or 47.4 per cent; and GST revenues represented $51.4 billion, or 11.2 per cent.

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Why only focus on corporate tax when personal tax and GST account for almost 59 per cent of federal revenues?

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Second, there are many areas of taxation that are very important, but don’t directly or materially contribute to government revenues. The proper and efficient administration of the tax system — conducted by the Canada Revenue Agency — is an example of that. It desperately needs attention and big fixes.