Mr. Speaker, the introduction of an inheritance tax would be a very complex way of raising a relatively small amount of additional tax revenue. In fact, based on OECD experience, an inheritance tax would contribute less than 1 per cent of federal tax revenues.
This revenue potential is small compared to the high administrative and compliance costs that it would entail since another tax collection operation would have to be established. This would require measures to obtain and verify information on wealth transfers at death, as well as complex rules to capture tax planning in order to avoid paying taxes.
Moreover, Canada already has a tax system which derives considerable revenue from wealth holders through the taxation of capital gains at death, property taxes and certain taxes on transfers of property. Revenues from property taxes in Canada are higher than the combined revenues from property and wealth taxes in all other OECD countries with the exception of the United States.
Rather than introducing a new tax that would be very complex and add a significant tax compliance burden, the budget introduced a number of tax measures which affect high income Canadians. An example of such a change on the personal income tax side is the elimination of tax advantages that flow from the establishment of family trusts.