This article originally ran in Canadian Dimension
This Black History Month, it’s important to recognize that economic injustice—both in Canada and around the world—is deeply rooted in racism. The property system in Canada was founded on the forced displacement and exclusion of Indigenous peoples from their land and immigration policies that prevented non-white immigration, effectively barring many thousands of people from accessing property in Canada. These racialized colonial systems laid the foundation for the current racial wealth gap, where racialized Canadians have about half as much wealth as their non-racialized counterparts.
Canada has a choice to make. We can continue to let the wealthiest among us hoard resources while ordinary Canadians struggle with rising costs, or we can take bold action to build a fairer, more just society.
Unlike the United States, where constitutional barriers have historically shielded the ultra-rich from direct taxation, Canada faces no such constitutional legal obstacles—only political ones. And those political excuses are running out.
A wealth tax enjoys overwhelming public support. Nearly 90 percent of Canadians back it, yet successive Liberal and Conservative governments have refused to act. Their refusal isn’t due to legal constraints but to the immense influence of corporate lobbyists and billionaire donors who oppose any effort to make them pay their fair share.
Just last year, powerful corporate interests mobilized to kill a progressive tax measure that would have primarily targeted Canada’s wealthiest citizens and corporations: the partial closure of the capital gains loophole.
Now, with the prorogation of Parliament and the selection of a new Liberal leader in advance of the next federal election, the measure is on life support, soon to wither away to quiet applause from those who worked to defeat it.
With capital gains changes dead, mobilizing to implement a wealth tax must be part of the conversation. If Canada truly wants to build a just, green economy, it’s time to stop listening to the wealthy elite and start listening to the people.
A lesson in constitutional constraints
Critics often claim a wealth tax is difficult to implement, pointing to challenges in the United States. But in the US, those challenges exist because of constitutional rules dating back to slavery. The US Constitution’s taxation system was designed, in part, to protect Southern slaveholders, ensuring their vast wealth—built on human exploitation—remained untouched. This is why efforts to impose a wealth tax in the US still face legal hurdles, allowing billionaires like Elon Musk and Jeff Bezos to sleep soundly at night.
South Africa, which based its apartheid laws on Canada’s reserve system, enshrined strong property rights protections during its democratic transition, limiting the government’s ability to redistribute wealth. Its system was deliberately designed to maintain economic stability for elites even after apartheid. While progress has been made in narrowing racial inequality, it has been driven primarily by a surge in the top Black incomes rather than increased wealth for the poorest. Wealth inequality has remained disappointingly stable, with the richest 10 percent of the population owning more than 85 percent of household wealth (higher than any other country where sufficient data is available).
But Canada is different. Our Constitution places no such restrictions on taxing wealth directly. Section 91(3) of the Constitution Act, 1867, grants the federal government broad taxation powers, meaning Parliament has full authority to impose a wealth tax. If we don’t have one, it’s because our political leaders choose not to act—not because they can’t.
The failure of political half-measures
Rather than implementing a wealth tax, the Liberal government attempted a modest increase to the capital gains inclusion rate in 2024, aiming to ensure that income from investment is taxed closer to income from work. Predictably, this was met with fierce opposition from business lobbyists and wealthy investors. Now, with Pierre Poilievre and Liberal leadership candidates vowing to scrap the modest reform, it’s clear this avenue has reached its political ‘best-before’ date.
If our leaders won’t hold the line on capital gains taxes, they should move to implement a wealth tax instead. A direct wealth tax would sidestep the capital gains loophole altogether, ensuring extreme wealth is taxed at its source—not just when assets are sold.
Indeed, Canada can lead the way on this issue. Wealth inequality is not just an economic issue—it’s a moral one. The billionaire class has grown its fortunes to unprecedented levels, while workers face soaring rents, out-of-control grocery prices, and an uncertain future.
A growing movement is pushing for Canada to chart its own economic path. Donald Trump’s tariff threats have supercharged the need for a new Canadian approach—one that isn’t dictated by US economic interests. A fair tax system is required to ensure that the costs of responding to Trump’s tariffs and building a more stable and secure economy, are allocated fairly.
We’ve led the way before. Last year, Canada implemented its own digital services tax, ensuring that American tech firms operating in Canada contribute their fair share.
A wealth tax isn’t just about redistributing and breaking up the concentration of wealth at the top, it’s about ensuring Canada has the resources to invest in affordable housing, public health care, and a green economy that protects future generations.
It’s time for action
It’s no secret that extreme wealth in Western democracies is overwhelmingly held by white people, and Canada is no exception. By allowing economic unfairness to persist, Canada is exacerbating the racial wealth gap and stifling upward economic mobility for all socially oppressed groups, including people of colour, women, workers, people living with disabilities, 2SLGBTQIA+ people and the poor.
The wealthy have coordinated their efforts to line their pockets and solidify their power. It’s time for the rest of us to stand in solidarity and fight.
The arguments against taxing extreme wealth have run out—only a lack of political will remains. If our leaders refuse to act, it’s up to us to demand better.
It’s time for Canada to ditch the excuses and implement a wealth tax and other progressive tax measures. The future of our economy, and our democracy, depends on it.
Muneeb Javaid is the development coordinator at Canadians for Tax Fairness, a non-profit, non-partisan organization that advocates for fair and progressive tax policies, aimed at building a strong and sustainable economy, reducing inequalities, and funding quality public services.
