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Policy Forum: Cognitive Infrastructure for Public Revenue Systems

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  • Benjamin Alarie

    (University of Toronto)

Abstract

Canada's tax administration is in crisis. The Canada Revenue Agency provides accurate answers to individual tax questions only 17 percent of the time, while sophisticated taxpayers increasingly access artificial intelligence (AI) tools that outperform the agency itself. This article argues that incremental digitization cannot close this gap. What is required is cognitive infrastructure: AI systems capable of transparent, auditable legal reasoning, deployed as a public utility under the Supreme Court's Vavilov framework. Drawing on comparative experience in the United Kingdom, United States, Estonia, Singapore, and Brazil, the article proposes a three-phase implementation strategy and a corresponding regime of taxpayer rights and algorithmic oversight. A five-year investment of approximately $150 million could yield returns measured in billions through compliance gains, dispute reduction, and restored public trust.

Suggested Citation

  • Benjamin Alarie, 2026. "Policy Forum: Cognitive Infrastructure for Public Revenue Systems," Canadian Tax Journal, Canadian Tax Foundation, vol. 74(2), pages 367-381.
    • Handle: RePEc:ctf:journl:v:74:y:2026:i:2:p:367-381
    DOI: https://doi.org/10.32721/ctj.2026.74.2.pf.alarie
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