For Immediate Release – July 8, 2020
OTTAWA – Canada can manage the $343.2-billion deficit projected in today’s fiscal snapshot, but it needs new progressive taxes to ensure the cost of COVID-19 is distributed fairly.
“Decades of regressive tax cuts and loopholes have allowed the top 1% to pay a lower overall effective rate of tax than all other income groups, including the poorest. Canada’s recovery plan should ensure those who can afford to pay are contributing to it,” said Toby Sanger, economist and director of Canadians of Tax Fairness.
The federal government should introduce a number of fair tax measures to support public services and reduce the disparities that have been exacerbated by COVID-19. These include:
- Taxes on wealth and excess profits: The wealthiest Canadians now own more than a quarter of the country’s net wealth. A 1-2% tax on fortunes over $20 million would generate over $10 billion a year. Just as the wealthiest families have done very well during the crisis, some large corporations have also seen their profits increase, while mainstreet businesses are suffering. An excess profits tax, which we had during both world wars, would raise revenues and prevent pandemic profiteering.
- Corporations, pay your fair share: As more economic activity moves online, the federal government should follow through on its 2019 election promise and finally tax Google, Facebook and other e-commerce firms on their profits and revenues here. Canada has a poor track record of convicting large corporations for taxes owed. It’s time to toughen laws around tax havens and corporate tax dodging.
Canadians for Tax Fairness and other organizations have also called for stronger transparency around COVID-19 spending, including government aid and contracts as other countries have done. The recent WE charity controversy is an example of the need for greater disclosure to ensure funds are spent wisely and that corporations, organizations, and government are held accountable.
“Public spending should focus on initiatives with significant economic returns that will reduce inequality, and help establish a sustainable economy. We can afford these critical investments by making the tax system fairer. What we can’t afford are cuts to public services and programs that would only throw us back in time and into a deeper crisis,” Sanger said.
Erika Beauchesne, Communications Coordinator, Canadians for Tax Fairness
Canadians for Tax Fairness is a non-profit organization that advocates for progressive taxes to fund important public services, reduce inequality and strengthen the economy.