OTTAWA - Canadian senators who earned $2-million in stock options from non-Senate work didn’t have to pay income tax on 50 per cent of that money. The Globe and Mail reports that at least 12 senators are on the stock option bandwagon are a disturbing example of how both Liberal and Conservative senators could be in a conflict of interest when it comes to deliberating on tax matters.
“Current stock option loopholes are a pretty sweet deal that partially accounts for the meteoric rise of CEO incomes in Canada, “ says Dennis Howlett, Executive Director of Canadians for Tax Fairness. “Canada loses $785 million a year from this loophole. Some of that money is being pocketed by senators.”
Canada’s 100 highest paid corporate executives are sitting on $2 billion worth of stock options. All of it qualifies for beneficial tax treatment.
Current stock option rules were created in 1984. Liberal and Conservative politicians both talked about how this was a way stimulate the use of employee stock option plans.
“But 90% of the benefit goes to the top 1%. It has become a favoured method for corporate executive compensation because tax payers end up effectively subsidizing their already outrageous incomes.” says Howlett. “Why should ordinary working Canadians have to pay full taxes on all the income they earn while the super-rich get away without paying their fair share?”
Canadians for Tax Fairness will be calling on the government to close this damaging loophole in a presentation to the House of Commons Finance Committee Pre-Budget Consultations on November 20.