With less than a week before Canadians go to the polls, there has been little focus on Canada’s tax competitiveness, which is unfortunate given the major real-life impact of tax policy on Canadians.

Yes, both the Conservative and Liberal party have pledged to cut personal income taxes. According to party platforms, the Conservatives promise to reduce the bottom tax rate (for income up to $47,630) from 15 per cent to 13.75 per cent, while the Liberals pledge to raise the basic personal exemption—the portion of tax-free income—from $12,069 to $15,000.

Both of these proposed tax cuts will provide some tax relief throughout much of the income spectrum, leaving more money in the pockets of Canadians.

However, neither tax change sufficiently improves Canada’s diminishing tax competitiveness and the economic consequences that accompany it. Personal income taxes are only one piece of the puzzle. To improve Canada’s competitiveness and promote economic growth —benefiting all Canadians—the next government should target corporate income taxes.

Corporate income taxes (CITs) are one of the most harmful forms of taxes in terms of the damage done to the economy for each dollar of government revenue raised. A relatively high CIT can prompt companies to shift their investment (and subsequently, profits) outside of Canada. This is a particularly important consideration today as the United States—Canada’s closest neighbour and largest trading partner—recently enacted comprehensive business tax reform and thus dramatically enhanced its competitiveness and attractiveness for investment.

And policy change cannot come soon enough as damage has already been done. Economists cite Canada’s relatively uncompetitive CITs as a significant factor in discouraging investment and prompting companies to relocate outside the country.

One study shows that in recent years, a majority of Canadian industries reduced their capital expenditures—spending on assets such as new buildings, equipment or land to improve or expand their businesses—which would contribute to economic growth in Canada. Another study found that (relative to other developed countries) investment by Canadians abroad has increased while foreign investment into Canada has decreased (again, relative to other developed countries), suggesting Canada has become a relatively less attractive place for investment.

Of course, some proponents of higher corporate taxes claim these taxes fall entirely on “the rich.” But in reality, the cost of CITs fall on individuals and families throughout the income spectrum by influencing how many workers companies choose to employ and the wages workers receive.

For example, one study found a negative (and significant) effect of higher CITs on wages, meaning higher CIT rates push down wages. In other words, it’s not just shareholders who bear the burden of higher CIT rates, it’s the workers as well.

Clearly, corporate tax reform would benefit all Canadians. A reduction in the CIT may encourage more companies to operate in Canada, stimulate business investment, support job growth and promote higher wages.

Any form of tax relief will help improve Canadian tax competitiveness, and personal income taxes are undoubtedly an important part pf the equation. The next government in Ottawa should make comprehensive tax reform, including more competitive corporate taxes, a priority.