22 April 2021
Dear C4TF Supporters,
Congratulations!! Thanks to your strong support, our advocacy is really producing results.
We’ve had unprecedented support for our e-action calling for the federal Finance Minister to implement a number of progressive tax reforms. After years of campaigning, we are achieving important progress on key tax fairness priorities.
In its budget tabled this week and the Fall Economic Statement, the federal government made important commitments to level the digital playing field and ensure that large multinational digital corporations pay their fair share of taxes. Starting July 1st, the federal government will require that the GST/HST be collected on imports of digital products and services, goods supplied through “fulfillment warehouses” and short-term rentals through digital platforms. The federal government has also committed to collect a 3 percent Digital Services Tax on the revenues that large multinational digital corporations such as Google, Facebook, Amazon, Apple and others derive from their business in Canada starting in 2022, until a multilateral agreement on international corporate tax reform comes into effect. Canada still needs to end the business deduction for advertising on foreign internet platforms and we need to achieve fundamental international corporate tax reform so all multinational corporations pay their fair share of tax, but these are two important steps forward.
The 2021 Budget also committed to introduce a publicly accessible registry of the beneficial (or real) owners of corporations by 2025. This is a major commitment forward on improving corporate transparency, to prevent money laundering, “snow-washing”, and tax evasion so we know who actually owns these anonymous corporations. There’s lots more work that needs to be done to get the provinces onside and get this implemented, but this federal budget commitment is major progress on an issue we’ve been campaigning on for over three years, along with our allies, Transparency International Canada, and Publish What You Pay.
The federal government has also committed to close some significant corporate tax loopholes, including by limiting the amount of interest corporations can deduct for tax purposes, to introduce stronger anti-avoidance rules, and to reform Canada’s transfer pricing rules to prevent the type of tax dodging that large multinational corporations including Cameco have successfully engaged in. There’s lots more that the federal government needs to do to stop corporate tax dodging and to ensure that large corporations pay their fair share of taxes, but these are steps forward. US President Joe Biden’s Tax Plan is a good example of the type of progress we’d like to see, and will open the door to more progress in Canada and around the world to reverse the race to the bottom on corporate taxes. We’re also glad that the Liberal government is increasing funding for the Canada Revenue Agency to crack down on international tax evasion and aggressive tax avoidance after deep cuts to these areas under the Harper government. These investments pay off significantly, returning an estimated $5 for every dollar invested in business tax compliance.
Despite these gains, there’s still much more that needs to be done to make our tax system fairer, reduce inequalities and provide funding for important public services.
For instance, millions of Canadians, especially low-income and vulnerable people, don’t receive the federal and provincial benefits they are entitled to because they face barriers to filing their tax forms. We all know that filing taxes can be a big hassle and expense for everybody. That’s why we’ve pushed for the federal government to introduce automatic filing of preliminary tax returns, something dozens of other countries provide. After years of advocacy on this, we were happy that the government announced in their throne speech that they intend to introduce automatic filing for simple returns to ensure that Canadians receive the benefits they need. We’re looking forward to working with the government to make this a reality and making it available for everyone. More pressingly, we continue to urge the government to extend the 2021 tax filing deadline, as we helped convince them to do last year, even as volunteer-run community tax clinics remain closed due to the pandemic. Consequently, hundreds of thousands of Canadians, including low-income families, seniors, Canadians with disabilities, Indigenous Canadians, new Canadians and others, will not be able to receive benefits on which they depend.
In addition, we’re going to continue to campaign strongly to make our tax system more progressive including by bringing in an annual wealth tax so the billionaires who increased their wealth by $78 billion over the past year pay their fair share of tax. We’re going to continue to push hard for governments to close regressive and unfair tax loopholes. We’ve also got a lot more work to stop tax dodging through tax havens, reform international corporate tax rules, including introducing a global minimum corporate tax rate, and ensuring that large corporations pay their fair share of taxes.
Our Fair Tax Recovery Plan shows how the federal government could raise an additional $70 billion annually by making our tax system fairer in these and other ways. While the recent federal budget didn’t include a number of these bigger ticket measures, there will be increasing pressure in coming years for governments to increase revenues to pay for the pandemic and to build back better. We will continue to work hard to demonstrate how they can do this by making our tax system fairer—and hope you will continue to support us in doing so.
Thank you again for all your support. Together we are getting results!
Executive Director, Canadians for Tax Fairness