It is my privilege to represent the Canadian Chamber of Commerce and deliver a simple but alarming message. Canada's economic competitiveness is slipping. Ultimately, it is economic growth that underpins our standard of living and our ability to provide the services Canadians require. Absent a vibrant economy, future generations will not enjoy the same quality of life and the same quality of opportunity that we around this table have.
To remedy this, Ottawa must turn its focus to nurturing growth driven by the private sector. As we have outlined in our official submission, Ottawa can enact immediate change to improve the fundamentals of our economy. Measures like simplifying the tax code, undertaking regulatory reform and removing internal barriers to trade need not be expensive but will generate abundant growth and investment. Reducing the barriers that prevent the private sector from capitalizing on our strategic economic advantages must be at the forefront of government policy.
It is a common refrain in this committee and among the economic commentariat that poor productivity is Canada's most pressing economic issue. Indeed, the matter is urgent. Canadian productivity is no longer stagnant but declining. Correcting this trend requires encouraging both private sector innovation and capital investment. Regrettably, we have historically been at pains to promote ourselves as an attractive destination for capital, and this has stymied our standard of living.
To deliver the shot in the arm our economy badly needs, we must avoid pitfalls such as new business taxes that repel investment. Canada should strive for a tax environment that encourages rather than deters investment. A streamlined and efficient tax system, based on best practices from around the world, is not only a priority but a necessity. Indeed, our creaky tax system is a hindrance to investment, hence our repeated call for simplifying the tax code.
We also call on the government to avoid imposing new taxes on the business sector, as it currently intends to do in the case of the digital services tax, or DST. As it stands, Ottawa intends to enact a retroactively imposed DST on certain online platforms' revenues. This is despite Canada's participation in international negotiations in which nearly 140 countries, including our largest trading partner, have agreed to delay imposing such taxes.
Our objections are numerous, but I'll outline just a few for you today.
First, we strongly object to the principle of retroactivity that robs businesses of the certainty they need to make productive investments in innovation and growth. Second, we oppose any measure that will increase the costs for businesses and consumers at a time of such economic precarity. Finally, we must sound the alarm that successive administrations in Washington have stated that enacting a DST would provoke damaging trade retaliation, potentially against key sectors of the Canadian economy. For the benefit of all Canadians, we urge the government to immediately stand still on its plan to enact the DST and allow the OECD process to complete.
Another tax quandary that Ottawa could quickly rectify at minimal cost is the scientific research and experimental development tax incentives program. As they stand, Canada's tax rules provide Canadian-controlled private corporations with access to its incentives that are not available to publicly listed companies, thereby creating an artificial barrier to growth.
The mention of publicly listed companies typically conjures images of large multinationals, yet, in Canada, two-thirds of TSX-listed companies are SMEs. This is a unique feature of our capital markets relative to the rest of the world and should be accounted for in crafting policies that encourage innovation. In Canada, preventing these publicly listed SMEs from accessing incentives that encourage more spending on research and development is weighing down our economic potential.
Budget 2024 presents an opportunity for decisive action. We urge Ottawa to adopt pro-growth policies that will invigorate Canada's economy. As ever, we stand ready to facilitate collaboration between policy-makers and the business community to make this happen.
Thank you.