OTTAWA – Budget 2023 aims in the right direction with a focus on transitioning to a lower-carbon economy and improving healthcare but misses an important element: taxes to help pay for it.
“This budget only responds to one part of the U.S. Inflation Reduction Act and the race to be globally competitive in the new clean economy. They have tax credits and investment programs but no new revenues to support them,” said Katrina Miller, Executive Director of Canadians for Tax Fairness. “Ordinary Canadians will end up paying the bill when it’s really the wealthiest who should cover the cost.”
President Biden’s IRA included a 15% minimum tax on reported profits of large corporations to generate revenue for its substantial green investments. Canada left this tax on the table and walked away from addressing the tens of billions lost each year to corporate tax dodging.
While Budget 2022 included a windfall profits tax on the financial sector, which reaped record profits during the pandemic, the government denied its own finance committee’s recommendations to expand it to other sectors seeing unprecedented gains, like grocery retail.
“We’re encouraged to see a proposed tax on dividends received by financial institutions. Hopefully, this signals a willingness for the government to begin taxing investment income the way it taxes regular income. As it is, this budget leaves wide open some of the biggest most expensive tax loopholes, such as the $22-billion-a-year capital gains exemption,” said Dr. D.T. Cochrane, economist and researcher with Canadians for Tax Fairness.
“U.S. President Biden gets that fair taxes to make large corporations pay their fair share are the building blocks of a just, green economy. The pre-budget recommendations from the House of Commons Standing Committee also acknowledged the need for new tax measures. Many MPs from across the parties support these, as do the majority of Canadians. We will continue to press on and eventually this government will get it too.”