Thursday, Feb 9, 2023 5:00 a.m. EST
For the French version of the press release, click here
OTTAWA – Some of Canada’s largest corporations received pandemic subsidies while boosting profits, avoiding billions in taxes, and making shareholders richer, according to a new report by Canadians for Tax Fairness. The report recommends a windfall profits tax and a minimum book profits tax to address the problem.
“The Canada Emergency Wage Subsidy (CEWS) was supposed to help businesses retain employees – not pad the profits of large corporations and shareholders. Now, Canadians are left with the tax bill and greater wealth concentration,” said report author DT Cochrane, economist and researcher with Canadians for Tax Fairness.
Cochrane noted these findings may just be the tip of the iceberg as the study was limited to the biggest public corporations with the biggest tax gaps.
Canadians for Tax Fairness looked at 74 publicly listed companies that were found in its previous report to have a tax gap* greater than $100 million. Half of them (37) received CEWS.
Those 37 CEWS recipients collected billions in profits during the pandemic, and spent a combined:
$81.3 billion on dividends
$41.1 billion on share buybacks
$51.1 billion on acquisitions
“Our report also found that while receiving wage subsidies, most of these companies actually reduced employment by 2020 and almost half still had reduced employment in 2021,” noted Katrina Miller, executive director of Canadians for Tax Fairness. “Canada needs a windfall profit tax for all large corporations to recover some of the funds and recognize that corporations that profited during the pandemic need to give some back for our recovery.”
Miller added that 80% of the CEWS recipients in the report have at least one subsidiary in a tax haven. “The U.S just put in a minimum book profits tax to limit corporate tax avoidance and Canada needs to do the same.”
*We define a tax gap as the difference between how much a taxpayer actually pays in tax, and how much they would pay at the statutory tax rate. The corporate tax gap grows if corporate profits increase or if there is a decrease in the effective tax rate, which is how much income tax companies actually pay as a share of profits.
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Media Contact: Erika Beauchesne, Communications Coordinator
Canadians for Tax Fairness | Canadiens pour une fiscalité équitable
erika.beauchesne@taxfairness.ca | 613-315-8679
