Recommendations:
- Create a new top marginal tax bracket on personal income over $1,000,000
- Create a new framework for taxing the wealth of the top 1% in Canada
- Implement a windfall profits tax on the oil and gas industry and keep it on the books for future crises
- Increase transparency to protect Canadians and shed light on corporate tax abuse
- Redirect costly, ineffective corporate handouts to real nation-building investment
- Prevent tax avoidance through the use of tax havens
- End tax expenditures that disproportionately benefit high-income earners
- End public financing for the fossil fuel industry
- Support international coordination on taxing multinationals and the ultra-wealthy
Introduction
Around the world, people are increasingly recognizing the link between extreme wealth and extreme power. The tax system is an extremely effective tool to limit the concentration of wealth, and therefore of power. People are calling on their governments to use the tax system to limit extreme wealth and power in the US, Germany, France, and Mexico. In the past year alone, Colombia proposed a corporate wealth tax, Washington state passed a 9.9% tax on income over $1 million USD, and the City of New York proposed a tax on luxury real estate owned by wealthy non-residents.
In Canada, calls for limiting extreme wealth and power are also widespread. Labour unions, civil society organizations, upper-middle-class heirs and even wealthy millionaires themselves have called for taxing the ultra-wealthy in the past year. Building on best practices that have been applied in other jurisdictions, Canadians for Tax Fairness has a wide range of tax policy proposals that address these demands to limit extreme wealth while building a sustainable economy. We call on the government to implement these proposals in its fall 2026 budget in order to prevent the extreme concentration of wealth and power, and raise revenue to invest in affordable housing, public healthcare and a green energy transition.
1. Create a new personal income tax bracket for millionaires
The personal income tax system is more than a revenue generation mechanism – it also shapes how corporations and individuals choose to distribute income, and thus who gets to build wealth. It is no coincidence that when Canada began slashing its top marginal income tax rates, top incomes exploded. This is not unique to Canada – similar patterns were observed in countries around the world. High top marginal income tax rates are extremely effective at discouraging exorbitant incomes, incentivizing money to flow towards more productive uses. Recent examples in the US also demonstrate that they can generate significant revenue – a new 4% surtax on incomes over $1 million in Massachusetts raised more than double its initial projected revenue. Despite billionaire-led opposition, capital flight has not happened. Washington state, which has no state income tax, just passed a 9.9% tax on income over $1 million. Canadians for Tax Fairness recommends that Canada implement a similar policy by creating a new tax bracket with a rate of 37% on income over $1 million. This would affect only 43,000 people (0.135% of taxfilers), deter outsized salaries, and raise $1.5 billion in 2025.
2. Create a new framework for taxing the wealth of the top 1% in Canada
Because of loopholes in our income tax system, income taxes alone are insufficient to prevent the extreme concentration of wealth. The ultra-wealthy can borrow against their wealth to fund lavish lifestyles without ever recording any income. And Canada’s failure to effectively tax inheritances means that wealthy billionaire families can pass on their wealth for generations, destroying any sense of equality of opportunity. Canada’s top 1% have increased their share of wealth over the past 25 years and hold nearly $4 trillion in wealth today. In 2025 alone, Canadian billionaires increased their wealth by $95 billion. To prevent continued extreme wealth concentration, we recommend a 1% tax on net wealth above $10 million, rising to a 2% tax on wealth exceeding $50 and 3% on wealth exceeding $100 million. This could raise over $39 billion in the first year and nearly $500 billion over 10 years while slowing wealth concentration. As demonstrated by a recent EU Commission report, wealth taxes can be extremely effective when designed properly (e.g., including exit taxes and applying equally to all types of wealth).
Canada should also implement a comprehensive inheritance tax. The current mechanism – deemed disposition of capital gains – has a tiny tax base and does not levy high rates on extremely large inheritances. The lack of a comprehensive inheritance tax system is one reason that the wealthiest family in Canada in 2023, the Thomsons, was also the wealthiest family in Canada a quarter-century ago.
3. Implement a windfall profits tax on the oil and gas industry and keep it on the books for future crises
Canada is currently experiencing another oil price shock. Just like the oil price shock in 2022, it is leading to windfall profits for the oil and gas industry while punishing consumers with higher prices. Rather than allowing windfall profits to be funnelled to American shareholders, Canada should immediately implement a windfall profits tax on the industry at a rate of 75% of profits above pre-crisis levels. If oil prices remain high for a full year, this could raise $46 billion that could be returned to consumers to compensate them for higher prices and invest in infrastructure that will reduce our reliance on fossil fuels. Similar taxes are being considered by governments around the world during this crisis, and were implemented effectively by the UK and the EU during the pandemic. This tax should also have a mechanism so that it can be triggered during future crises that affect other industries – we cannot continue to allow giant monopolistic corporations to benefit from crises by raising their prices more than their costs are increasing. Consumers need protection from this anti-competitive behaviour known as “sellers’ inflation”.
4. Increase transparency to shed light on corporate tax abuse
Canadians are rightfully angry about large corporations’ ability to shift profits to tax havens. Currently, however, corporations have no obligation to publicly disclose how much of their profits they shift to tax havens. Australia and the EU have recently implemented corporate transparency measures to ensure that such information is publicly available. Canada must follow suit to allow the public to hold large corporations accountable for their profit-shifting and identify policy changes that need to be made to prevent it. This country-by-country financial reporting is already provided to tax authorities and could easily be made public. Furthermore, the federal government must coordinate the creation of a pan-Canadian Beneficial ownership registry to ensure that reporting requirements are consistent for all corporations registered in Canada. This is a crucial tool for corporate transparency and accountability.
5. Re-direct costly, ineffective corporate handouts to real nation-building investment
The 2025 budget introduced a “productivity super-deduction” that further cut corporate taxes. This is despite the fact that the past 30 years of corporate tax cuts have not yielded any increase in private sector investment. Instead, corporate profits reached record levels in 2025 while investment was below 2011 levels. Canada should eliminate these latest corporate tax cuts, which serve to benefit shareholders rather than increase investment. Instead, the government should invest those savings in a real industrial strategy that directly funnels investment towards important industries like a national clean electricity grid. Canada should also implement a minimum tax on book profits of large corporations to prevent corporations from being able to combine tax credits to avoid paying any taxes, with no benefit to the public. Canada already has such a mechanism for individuals and for large multinationals (although the latter is riddled with loopholes).
6. Prevent tax avoidance through the use of tax havens
Despite the implementation of the Global Minimum Tax Act in 2024, Canadian assets in tax havens reached $682 billion in 2024, more than all the foreign assets Canadians hold outside the US combined. Canadian assets will continue shifting to tax havens, eroding Canada’s corporate income tax base, until Canada ends the tax incentive to be based in tax havens. The Tax Justice Network estimates that this already costs Canada $15 billion in revenue annually. Changing our laws to collect this revenue would merely ensure that all corporations are subject to the spirit of our existing tax laws. Canada should immediately require companies to have a genuine business reason to set up foreign subsidiaries in tax havens and end tax information exchange agreements with known tax havens to prevent companies from being able to funnel profits through foreign subsidiaries in tax havens and return them to Canada tax-free. Canada should also consider shifting to a tax credit system for foreign subsidiaries as opposed to the current exempt surplus system.
7. End tax expenditures that disproportionately benefit high-income earners
Canada’s tax system has several mechanisms that disproportionately benefit the ultra-wealthy and men. 68% of the tax savings from the partial inclusion of capital gains, which is projected to cost federal coffers $36.9 billion in 2026, go to people making over $250,000 a year. 91% of the dividend gross-up and tax credit (DTC), projected to cost $7.6 billion in 2026, benefits the top 10% of earners. Both of these mechanisms lower the tax rate on income collected by people who already own wealth relative to the tax rate on income from working. Someone with the same income level will pay more in tax on employment income than they will on capital gains or dividends. This is fundamentally unfair. These tax expenditures are also an equity issue – 65% of the tax savings from partial inclusion of capital gains and 63% of the savings from the dividend gross-up and tax credit go to men. These tax expenditures should be removed so that people who own wealth do not face lower tax rates than those who work for a living.
8. End all public financing for the fossil fuel industry
The latest data shows that Canada has fallen far behind on its climate targets, largely because of the fossil fuel industry. Canada’s emissions barely budged in 2024 because fossil fuel emissions continued increasing. As Canadians feel the pinch from the latest oil price shock, the need for a clear plan to transition away from fossil fuels is more urgent than ever. Unfortunately, the government increased tax credits for liquified natural gas facilities and carbon capture, usage and storage facilities in Budget 2025, providing further public money to the predominantly foreign-owned fossil fuel industry. Budget 2026 must finally fulfill the government’s pledge to phase out “inefficient” fossil fuel subsidies and end the pause on the gas excise tax, which may further benefit fossil fuel companies.
9. Support international coordination on taxing multinationals and the ultra-wealthy
Today’s large corporations and multinational enterprises, and Canada’s ultra-wealthy, typically hold significant assets outside of Canada. Because of this, to ensure that the largest corporations and the ultra-wealthy pay their fair share of tax requires global cooperation. Canada must stop undermining international coordination and instead play a leading role in international efforts to ensure fair global taxation, including supporting the UN tax convention process. Canada should also support the G20 proposal to impose a global minimum tax on billionaires. Canada should also consider reinstating the Digital Services Tax (similar taxes are still in place in dozens of countries) and using it as a bargaining tool during CUSMA negotiations, and close the new carveout it created in the OECD Pillar Two agreement last year by exempting US corporations.
