The Canadian Coalition for Tax Fairness supports the federal government’s efforts to close unfair tax loopholes that allow some wealthy Canadians to reduce their taxes using private corporations.
Unfair tax loopholes exacerbate inequality, undermine the integrity of our tax system and diminish the ability of government to fund the social and physical infrastructure needed to ensure a healthy and growing economy.
The private corporation loopholes that the government aims to close largely benefit the wealthy and create significant inequities in our tax system. The research clearly shows that the wealthy are far more likely than middle or low income Canadians to own a private corporation, and are far more likely to take advantage of these tax loopholes.
This is also a gender issue as a disproportionate benefit goes to men while it takes money away from universal programs such as childcare. With $27 billion sheltered in passive investments to date, this is a significant public subsidy to the wealthy.
Although closing these private corporation tax loopholes is a positive and important step, it falls short of a full tax fairness strategy. There are many other unfair loopholes, such as those for stock options and capital gains, that mostly benefit the wealthy and do not serve the broader public interest, while making the tax system overly complex.
We encourage the government to take substantial steps to further improve tax fairness and implement a broader package of reforms. The money currently providing taxpayer-funded subsidies for the wealthy could be much better invested in poverty eradication, better public pensions for all, universal child care, long-term care for seniors, action on climate change, public education, community economic development, international development, programs for indigenous communities, agricultural research, or other measures that would build a healthy, growing economy.