Here’s your chance to remind Justin Trudeau of his promises to close the stock option tax loophole. Remind him that failure to keep his word is costing billions. He chose to keep this perk for wealthy CEOs while telling us we can’t afford Pharmacare, a childcare program or many of the other investments that would make Canada stronger. That’s just not right.
A new report commissioned by a group of MPs in the European Parliament shows that the Royal Bank of Canada directed the creation of 1199 offshore companies in tax havens including Bahamas, Switzerland, Hong Kong, Jersey, Guernsey, and the Isle of Man. It also shows RBC - under a different logo - was associated with the creation of 90 more offshore companies in those same low or no-tax jurisdictions.
In Canada, there is one set of tax rules for corporate insiders, another for the rest of us. The stock option loophole is among the more blatant examples of this lopsided state of affairs.
It is a favourite of bank presidents and other wealthy CEOs. Under current tax laws, they can be paid in stock options and later cash them in, drawing millions in income. But, unlike a regular salary, the first 50 per cent of stock option income is tax free. What’s not for these guys to love?