Letter to Prime Minister Justin Trudeau
Aug 1, 2023
The Right Hon. Justin Trudeau
House of Commons
CC: The Hon. Lawrence MacAuley, The Hon. Chrystia Freeland, The Hon. François-Philippe Champagne, the Hon. Marie-Claude Bibeau,
Dear Prime Minister,
Thank you for your ongoing work to improve the lives of Canadians. I am writing to you regarding a recent recommendation from the Standing Committee on Agriculture and Agri-Food, which would help Canadian households and the economy.
We were very encouraged by the AGRI committee’s June 13, 2023 report on food price inflation in Canada and its recommendations to improve food affordability. Our organization, which advocates for fair and progressive taxation, was pleased to see the committee recommend a windfall tax to address the role that higher corporate profit margins have played in inflation.
“(Recommendation #9) The Committee recommends that, if the Competition Bureau finds evidence in its upcoming market study that large grocery chains are generating excess profits on food items, the Government of Canada should consider introducing a windfall profits tax on large, price-setting corporations to disincentivize excess hikes in their profit margins for these items.”
On June 27, 2023, the Competition Bureau released its study, showing that large Canadian grocers are enjoying higher profit margins at a time when Canadians are burdened with higher food prices.
With the AGRI committee’s recommendation and the Competition Bureau’s findings, we believe the government now has a very strong case to tax excess profits and put the revenue towards supports and programs that make life more affordable.
Unfortunately, it is not only grocery chains in Canada that have taken advantage of economic turmoil to increase prices and profit margins. Research by Canadians for Tax Fairness, which was referenced in the AGRI committee report, shows that large corporations across multiple sectors enjoyed soaring profits in 2021, in part by increasing what they charge for goods and services.
While large corporations have enjoyed record profits, the past two years have been difficult for many households, but especially the most vulnerable. Inflation and higher interest rates have widened the gap between rich and poor. We welcome your government’s commitment to reduce inequality and your acknowledgement that the tax system has a role to play in those efforts. We hope that your government will consider the AGRI committee’s recommendation for a windfall tax as such an opportunity.
Canadians for Tax Fairness
Dr. DT Cochrane
Economist and Policy Researcher
Canadians for Tax Fairness