Time for a tax system that delivers on equality and climate action

Facts

16 October 2023

A chart showing Since 1990, Canada’s emissions have decreased by an average of 3.1 tonnes per person, but not equally. While the bottom 90% reduced their emissions by 4 tonnes per person, the top 1% increased their emissions by 34 tonnes per person.

The biggest contributors to climate change have benefitted from a tax system that has allowed environmental costs to be downloaded and wealth to be concentrated at the top.

Fossil fuel corporations have increased profits and economic power – in great part by taking advantage of tax measures that have cost the public and the planet.

To achieve a just transition where benefits of the green economy are shared fairly, public investment must lead the way. Our report proposes more than a dozen tax and policy solutions to help the federal government get there.

The tax system can play a much larger role in bringing Canada closer to its climate goals while avoiding the same mistakes that exacerbated inequality.

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To : Hon. Chrystia Freeland, Finance Minister and Hon. Steven Guilbeault, Minister of Environment and Climate Change Canada

CC: M.P.s Jasraj Singh Hallan, Daniel Blaikie, Gabriel Ste-Marie

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Dear Minister Freeland and Minister Guilbeault,

A new report by Canadians for Tax Fairness shows how Canada can address the twin crises of inequality and climate change by making careful revisions to the tax system.

For decades, tax measures have enabled the expansion of fossil fuels while allowing environmental costs to be downloaded and wealth to be concentrated among those most responsible for climate change.

We need to fundamentally reform our tax system if we are going to achieve the challenge of a just transition where the benefits of a green economy are shared more fairly among workers and communities. The federal government should:

-Introduce progressive tax measures, including a wealth tax and fully taxing capital gains, to rebalance economic power and fund public green investments that result in collective prosperity.
-Balance tax incentives for corporations with strong deterrents and penalties, such as creating strong conditions for tax credits and aggressively eliminating fossil fuel subsidies and supports.
-Strengthen Canada’s carbon pricing system by phasing out free allowances for the fossil fuel sector and moving to a border adjustment system, as is being done in the EU.