OTTAWA - Documents that show that Finance Minister Bill Morneau knew that most of the benefit of the stock option loophole fell to a small group of very wealthy CEOs and that he received “urgent” messages from business lobbyists days before the federal budget, raises serious questions about the influence of Bay Street within the Liberal government.
“The Prime Minister campaigned on a promise to get rid of the stock option loophole which has put billions back into the pockets of wealthy CEOs including bank presidents, real estate moguls and heads of powerful multinationals,” says Dennis Howlett, president of Canadians for Tax Fairness. “Those guys send their lobbyists to talk to the Finance Minister and – just like that - their commitment disappeared.”
The tax watchdog is calling on the Prime Minister and the Finance Minister to immediately axe the loophole.
Canadians for Tax Fairness has made repeated presentations to the Liberal and Conservative governments showing that the30 year old loophole drains at least $750,000 each year from federal revenues. And in a recent column for Huffington Post Howlett questions why ordinary taxpayers are bankrolling the salaries of Canada's wealthiest men.
Morneau has publicly countered that the tax policy was aimed at helping startups who had little money but wanted to attract and retain talent. In fact, most users of that loophole deduct an average of $400,000 from their taxable income.
In documents received through an Access to Information request by Press Progress, the Canadian Council of Chief Executives complains of the “fairness” of Liberal plans to do away with stock option loophole. “Start-up indeed,” says Howlett. "It has been shown without a doubt that this is a tax perk for well-established millionaires."