The Canadian Chamber of Commerce is calling on the federal government to make Canada’s income tax system the most competitive in the world.

The announcement came Monday in a statement on Canada’s fiscal policies at the Canadian Chamber Annual General Meeting in Quebec City.

“Canada remains behind our major international competitor, the United States in terms of personal income tax rates and the overall tax burden,” said Gerry Protti, volunteer chair of the board of directors of the Canadian Chamber of Commerce. “It is time for tax relief for all taxpayers, regardless of income.”

In its statement, the Chamber notes that for many low- and modest-income families, the effective marginal tax rate is higher than 60% and higher than the rate facing Canada’s top income earners as a result of clawbacks of multiple benefits.

The Canadian Chamber also stated that the top marginal personal income tax rate in Canada averages 45.4% (federal/provincial combined) whereas in the U.S. it is 38.2% (on a weighted average basis). Moreover, Canada’s top marginal tax rate kicks in at a much lower level of income than the top marginal rate in the United States.

“The federal government should raise the threshold at which the top federal marginal personal income tax rate kicks in to $150,000 from the current $104,649,” aid Nancy Hughes Anthony, President and CEO of the Canadian Chamber of Commerce. “By making our tax rates more competitive, Canada can attract and retain more high-tech skilled workers, upper management, entrepreneurs and professionals.”

Substantial tax relief could be offered over time if the federal government were to create sufficient fiscal room by keeping program spending increases to 3% per annum

According to the Chamber, the government can achieve this by reallocating spending from lower priority to higher priority programs (as the government itself said it would begin do this year) and by instilling greater efficiency in the delivery of public services.

The Canadian Chamber statement also called for any unallocated surplus arising at year-end to be allocated to debt reduction.