Canada's personal income tax system ranks 28th out of 38 developed countries, and its treatment of capital gains and dividends ranks 34th, according to the Tax Foundation's 2026 International Tax Competitiveness Index, which the Canadian Taxpayers Federation (CTF) publicized on Monday.

The Washington-based Tax Foundation scores every member of the OECD (the Organisation for Economic Co-operation and Development, a group of 38 mostly wealthy democracies) on how its tax code treats work, business and investment. Canada's overall rank is 15th, the same as in 2025, with a score of 72.2 out of 100, down from 72.3.

The rank the CTF picked up on was the 28th place on individual taxes. The number buried deeper in the index tables is worse. Within that category, on the component that measures taxes on capital gains and dividends, Canada scores 41.1 out of 100 and ranks 34th of 38.

Only four OECD countries tax capital gains and dividends more harshly by the index's measure. On real property taxes Canada ranks 33rd. On the corporate tax rate itself Canada ranks 26th, behind the United States at 24th, even though Canada's overall corporate ranking of 17th is lifted by its cost recovery rules, where it ranks 6th.

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The U.S. ranks 17th on individual taxes against Canada's 28th, 8th on corporate taxes against Canada's 17th, and 26th on capital gains and dividends against Canada's 34th. The United States ranks 17th overall, two places behind Canada; its 37th-place cross-border rules are its weakest category.

The index notes that Canada abolished its digital services tax in 2025 and cancelled the planned increase in the capital gains inclusion rate, and that its rank held at 15th.

Franco Terrazzano, the CTF's federal director, said the report "shows Canada falling behind the United States on business and income taxes" and that "We need income and business tax cuts now."

Federal tax policy sits with Finance and National Revenue Minister François-Philippe Champagne.

The federal tax bill he currently has before the Commons is Bill C-38, which extends the temporary fuel excise tax holiday to January 31, 2027; it is at report stage. No bill cutting personal or corporate income tax rates appears on LEGISinfo under his name.