For immediate release: June 25, 2024
OTTAWA— A new report released by Canadians for Tax Fairness reveals that while corporate profits in Canada have been soaring, corporate investment has not. Instead, in 2023, a majority of net profits went to dividends and share repurchases.
“Canadian corporations are seeing expanding profits but aren’t reinvesting them back into the economy at the same rate,” stated Katrina Miller, Executive Director of Canadians for Tax Fairness (C4TF). “Billions are simply being extracted while our productivity slows.”
Pre-tax profit margins increased significantly during the pandemic and have remained high in 2023. Meanwhile, corporate capital expenditures have basically flatlined over the last decade.
Non-financial corporate pre-tax profits and capital expenditures, 2010-2023.
Source: Statistics Canada Table: 33-10-0225-01
“We don’t have to accept ballooning profits being sent to shareholders' pockets,” said Miller, “we can tax some of it back and invest it in public projects that boost the economy and have social benefits.”
In addition to the recent reduction in the capital gains loophole, C4TF recommends raising the corporate income tax rate to 20% and establishing a minimum tax on booked profits. This revenue can be used to invest in affordable housing and build the green economy.
Canadians for Tax Fairness is 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.
Media contact:
Erica Shiner - Communications Coordinator
Canadians for Tax Fairness
erica.shiner@taxfairness.ca
