Research Project
FACT Stream · Research Program

Tax Policy &
Tax Administration

From foundational public finance pedagogy to cutting-edge questions in digital taxation, employee compensation, and tax compliance — a research program that engages the full breadth of how tax systems are designed, administered, and reformed.

Public Finance

Textbook
Seventh Canadian Edition
Public Finance in Canada
Tedds, Tombe & Rosen

The forthcoming seventh Canadian edition, led by Lindsay Tedds and Trevor Tombe, continues the standard-setting pedagogical treatment of Canadian public finance — covering tax incidence, expenditure theory, fiscal federalism, and the economics of government. Updated to reflect the significant shifts in Canadian fiscal policy and intergovernmental finance since the sixth edition.

📗 Textbook · McGraw-Hill Ryerson · 2023
Sixth Canadian Edition
Public Finance in Canada
Rosen, Tedds, Tombe, Wen & Snodden

The authoritative Canadian public finance textbook, used in undergraduate and graduate programs across the country. Covers the core theory and empirical evidence on government expenditures, taxation, and fiscal federalism, with a distinctly Canadian institutional lens — including treatment of provincial tax systems, the GST/HST, CPP, and intergovernmental transfers.

Tax Administration

Research
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Tax Filing as State Administrative Infrastructure: Governance Gaps in Canada's Tax-Based Benefit System
Petit, Tedds & Robson · Canadian Tax Journal · Forthcoming

Examines the role of the personal income tax return as foundational administrative infrastructure for delivering benefits in Canada — and the governance gaps that arise when large portions of the population do not file. Argues that treating tax filing as a technical compliance matter understates its structural importance as a gateway to income support, and that closing filing gaps requires deliberate policy design rather than incremental administrative fixes.

FACT
⧗ Forthcoming
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Re-Envisioning the Canada Revenue Agency: From Tax Collector to Benefit Delivery Agent
Petit, Tedds, Green & Kesselman · Canadian Tax Journal · Vol. 69, No. 1 · 2021 · pp. 34–52

Examines what it would actually take to deliver basic income — or any expanded benefit program — through the tax system. Argues that the CRA's administrative architecture, filing incentives, and real-time data gaps create significant barriers that proponents of tax-delivered transfers often underestimate. A foundational piece for anyone serious about benefit delivery reform in Canada.

FACT ENABLE
Automatic Tax Filing: Welcome News for Low-Income Canadians but There's More to Do
Gillian Petit · IRPP Commentary · Institute for Research on Public Policy · 2025

Assesses the federal government's move toward automatic tax filing for low-income Canadians — welcoming it as a meaningful step toward closing benefit access gaps, while arguing that filing alone is not sufficient. Identifies the structural gaps that automatic filing does not address and sets out what further policy action is needed to ensure eligible Canadians actually receive the benefits they are entitled to.

FACT ENABLE
Canada Revenue Agency and Tax Administration: Re-Envisioning Tax and Benefit Administration in the Age of Digitalization
Flaim, Petit & Tedds · Prepared for the Social Sciences and Humanities Research Council of Canada and the Government of Canada's Future Skills Centre · 2021

A commissioned policy report examining how digitalization is transforming — and could further transform — the way Canada administers its tax and benefit system. Assesses the CRA's current digital infrastructure against international comparators, identifies structural governance gaps, and sets out a reform agenda centred on proactive benefit delivery, real-time data use, and administrative modernization.

FACT
The Merits of Automatic Income Tax Assessments for Low-Income Canadians
Cameron, Tedds, Robson & Schwartz · The School of Public Policy Publications · February 2020

Examines the case for automatic income tax filing for low-income Canadians — assessing the administrative feasibility, potential benefit access gains, and policy design considerations of moving toward a system where the government files on behalf of eligible individuals.

FACT ENABLE

Tax Non-Compliance & the Underground Economy

Research
📕 Monograph · Canadian Tax Foundation · 2002
Book
Taxes and the Canadian Underground Economy
Giles & Tedds

The definitive empirical treatment of Canada's underground economy. Using the currency demand approach and MIMIC modelling, Giles and Tedds produce estimates of the size and trajectory of unreported economic activity in Canada, trace its relationship to the tax burden, and assess the fiscal implications for government revenue. A landmark contribution to the Canadian tax policy literature published by the Canadian Tax Foundation.

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Estimating the Income Reporting Function for the Self-Employed
Tedds · Empirical Economics · Vol. 38, No. 3 · 2010 · pp. 669–687

Estimates a structural model of income underreporting among the self-employed in Canada, identifying the determinants of compliance decisions at the individual level. Finds that the probability and extent of income concealment respond systematically to tax rates, audit risk, and business characteristics — providing micro-level evidence for what aggregate underground economy estimates can only infer.

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Keeping it off the Books: An Empirical Investigation into the Characteristics of Firms that Engage in Tax Non-Compliance
Tedds · Applied Economics · Vol. 42, No. 19 · 2010 · pp. 2459–2473

Uses firm-level data to characterize which businesses are most likely to engage in tax non-compliance, examining the role of firm size, industry, ownership structure, and cash intensity. Finds systematic patterns in non-compliance that have direct implications for audit targeting and tax enforcement design.

The Underground Economy in Canada
Tedds · In Bajada & Schneider (Eds.), Size, Causes and Consequences of the Underground Economy · Ashgate Publishing: UK · 2005

A country-specific contribution to an international comparative volume on the underground economy. Provides a comprehensive overview of the Canadian literature on the size, causes, and consequences of unreported economic activity, situating Canadian estimates and enforcement approaches within a broader international context.

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The Canadian Underground and Measured Economies: Granger Causality Results
Giles, Tedds & Wekeneh · Applied Economics · Vol. 34 · 2002 · pp. 2347–2352

Tests for Granger causality between Canada's underground economy and measured GDP, establishing the temporal ordering of the relationship between unreported and official economic activity. Finds bidirectional linkages with implications for how policymakers interpret macroeconomic data and revenue forecasts.

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What Goes Up Must Come Down (But Not Necessarily at the Same Rate): Testing for Asymmetry in New Zealand Time Series
Tedds · New Zealand Economic Papers · June 1998 · pp. 41–58

Tests for asymmetric adjustment in New Zealand macroeconomic time series, examining whether upward and downward movements in key economic variables occur at different speeds. An early empirical contribution applying threshold cointegration methods to questions of economic dynamics in a small open economy.

Options Backdating

Research
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Do Insiders Comply with Disclosure Rules?: Evidence from Canada, 1996–2011
Tedds · The School of Public Policy Publications · Vol. 9, No. 30 · 2016 · pp. 1–34

Examines compliance with insider reporting obligations among publicly traded Canadian firms over a fifteen-year period, assessing whether mandatory disclosure rules are effective in practice. Finds persistent and systematic non-compliance, raising questions about the adequacy of enforcement and the degree to which disclosure-based regulatory regimes actually constrain opportunistic insider behaviour.

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Quantifying the Benefits of Backdating: A Canada-US Comparison
Compton, Nicholls, Sandler & Tedds · Columbia Journal of Tax Law · Vol. 3, No. 2 · 2012 · pp. 144–175

Quantifies the financial benefits accruing to executives from stock option backdating in Canada and the United States, comparing the two jurisdictions across regulatory environment, tax treatment, and detected incidence. Provides the first systematic cross-national estimate of backdating gains and assesses the relative effectiveness of disclosure regimes in deterring the practice.

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Insider Reporting Obligations and Options Backdating
Compton, Nicholls, Sandler & Tedds · Banking and Finance Law Review · Vol. 26, No. 3 · 2011 · pp. 473–490

Examines how Canadian insider reporting obligations interact with — and were exploited by — options backdating schemes. Analyses the legal mechanics of reporting requirements, documents how delayed and inaccurate filings facilitated backdating, and assesses the regulatory reforms introduced in response to the backdating scandal. Situates Canadian developments within the broader North American regulatory response.

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Options Backdating: A Canadian Perspective
Compton, Sandler & Tedds · Canadian Business Law Journal · Vol. 47, No. 3 · 2009 · pp. 329–362

Provides the first Canadian-specific legal and economic analysis of stock option backdating — the practice of retroactively selecting a grant date to maximize executive compensation. Examines the Canadian regulatory and tax framework, assesses the prevalence of backdating among publicly traded Canadian firms, and evaluates the adequacy of existing disclosure requirements and enforcement mechanisms.