The federal government is facing urgent spending priorities. Canada must shift rapidly to a post carbon economy while mitigating the disastrous effects of climate change. Policymakers also need to address an uneven pandemic recovery that saw billionaire wealth grow and corporate profits reach record highs while poverty worsened. Rising food prices and the lack of housing is making it hard for families to thrive.
These problems require significant investments to fix. Progressive tax policies are part of the remedy. From taxing extreme wealth to stopping corporate tax avoidance, this year’s Alternative Federal Budget, released by the Canadian Centre for Policy Alternatives, shows how we can fund these investments while making our tax system fairer:
|
Fair Tax Measure |
Estimated New Annual Revenue (2024-25) |
|
Annual net wealth tax |
$28.8 B |
|
Raise the corporate income tax rate from 15% to 20%. |
$11 billion |
|
Make corporations with pre-tax profits over $1 billion pay a minimum corporate income tax of at least 15%, and base that on the “book profits” they report to shareholders - not the other story they tell the CRA. |
$7 billion |
|
Implement a minimum tax of 25% on foreign profits of Canadian corporations. |
$19.3 billion |
|
Tax income from capital gains at 75% instead of only at 50%. |
$9.5 billion |
|
Cap corporate pay deductions at $1 million in total compensation for every employee |
$500 million |
|
Limit the corporate dividend tax credit to ‘tax already paid’. (This credit gets claimed by shareholders for tax paid by the corporations they own.) |
$1 billion |
|
Limit how corporations carry over losses to reduce their taxes by capping the carry-forward period to 10 years for corporate non-capital losses. |
$1 billion |
|
Apply a windfall profits tax to large corporations’ profits greater than 120 per cent of pre-pandemic profit margins |
$10 billion |
|
Eliminate the corporate tax exemption for Real-Estate Investment Trusts (REITs). |
$130 million |
|
Eliminate the First Home Savings Account |
$465 million |
|
Apply carbon tax to large emitters & implement carbon border tax |
$3 billion |
|
Properly fund the Canada Revenue Agency (CRA) so that it can investigate complex tax avoidance schemes by the wealthy and corporations. |
|
|
Aid charities in navigating regulatory changes |
|
|
End tax agreements with known tax havens |
|
|
Strengthen labour and accountability rules for climate tax credits |
|
|
Prioritize tackling tax avoidance by the wealthy by shifting spending from Budget 2023 on catching low-income CERB recipients to auditing CEWS recipients |
|
|
Require public, country-by-country reporting of corporate financial information |
|
|
Hasten the introduction of automatic tax filing to save Canadians time and help get tax benefits to more Canadians |
Source:
Rising to the Challenge: 2024 Alternative Federal Budget, Canadian Centre for Policy Alternatives, Aug 24, 2023.
