OTTAWA - The new federal Liberal minority government will have a lot of opportunity and reason to implement a number of substantial tax fairness measures with the support of two parties that hold the balance of power — the NDP and the Bloc Québécois.
All three parties — which collectively received close to 60% of the popular vote — have expressed support for a number of tax fairness measures in different areas. These measures also have the strong support of the Canadian public, according to public opinion polls.
“While the specific measures proposed by these parties may differ, with some stronger than others, there is a lot of common ground on which they can work together to make our tax system fairer, and the new Liberal government can certainly interpret these measures as a mandate to take action,” said Toby Sanger, Executive Director of Canadians for Tax Fairness (C4TF).
The list of fair tax measures supported by these three parties is substantial:
- All three parties have supported introducing a 3% tax on the Canadian revenues of e-commerce multinationals, like Amazon.
- All three parties support some sort of excess profits tax on large corporations or on sectors that have made abnormally large profits through the pandemic.
- All three parties proposed tax measures to reduce real estate speculation, such as anti-flipping taxes, increases in capital gains taxes and foreign homebuyers taxes.
- All three parties committed to tackle tax havens and reduce international tax dodging, with the Liberals supporting a global minimum corporate tax and stronger general anti-avoidance rules, the NDP pledging to end use of offshore transactions with no clear economic purpose, and the Bloc supporting measures to fight tax havens and international tax evasion.
- All three parties support addressing wealth inequality, with the NDP proposing a 1% wealth tax on fortunes over $10 million, the Bloc supporting a three-year annual wealth tax on large fortunes, and the Liberal Throne Speech last year having committed to “identify additional ways to tax extreme wealth inequality.”
- All three parties support a progressive carbon tax, with the NDP and Bloc also opposing fossil fuel subsidies, and the Liberals also pledging to apply border carbon adjustments to imports from countries that lag on reducing carbon pollution.
- The Liberals and NDP, as well as the Conservatives, all proposed significant increases to the Canada Revenue Agency’s resources, for better enforcement and to combat aggressive tax avoidance.
- The Liberals and NDP had tax proposals aimed at the top 1% of income earners, with the Liberals advocating a minimum 15% tax, and the NDP proposing an increase in top marginal rate from 33% to 35%.
- The Liberals and NDP have measures aimed at corporate profits, with the Liberals proposing to raise the corporate tax rate on all bank and insurance company earnings in excess of $1-billion, and the NDP supporting overall higher corporate income tax rates.
- The Liberals and NDP support a luxury tax, with the NDP advocating a stronger one than the Liberals proposed in their 2021 budget.
“We’re especially glad that NDP leader Jagmeet Singh has said that cooperation in taxing the wealthiest Canadians will be required for the NDP’s support in Parliament,” said Sanger.
“These parties should also work together to ensure the increased revenue goes towards better public services,” said Dr D.T. Cochrane, research economist with Canadians for Tax Fairness. “All three parties support the Liberal’s proposed childcare plan, and if smart measures like a wealth tax were implemented, other important public programs like universal pharmacare could also be introduced,” Dr. Cochrane said.
