For immediate release: November 25, 2024
OTTAWA— As Canadians struggle to make ends meet, corporate profits continue to soar. A new report from Canadians for Tax Fairness (C4TF) highlights how excess profits taxes can reclaim wealth extracted from multiple crises to tackle affordability woes and inequality in Canada.
The report, titled "Taxing excess profits in Canada: An urgent proposal for action", shows that from 2021 through 2023, Canadian corporations collected $440 billion more in profits than their previous average, contributing to high levels of inflation.
"Very large corporations were able to raise their profit margins in the context of a pandemic and war because of their market power, not because they invested in the economy,” said Silas Xuereb, author of the report and researcher with C4TF. “It makes sense to tax back some of that gain for public good.”
In response to the COVID-19 pandemic, Canada implemented an excess profits tax on large banks and life insurers, which increased the statutory corporate income tax rate by 1.5 percentage points on profits above $100 million and implemented a one-time 15% tax on profits above $1 billion. Countries throughout Europe have gone further with excess profits taxes on broader sectors of the economy, including energy.
“A windfall profits tax across all sectors is long overdue in Canada,” stated Katrina Miller, Executive Director of C4TF. “Corporations aren’t putting their profits back into the economy; they need to be taxed accordingly to fund the crucial services we all need.”
The report calls on the government to implement a one-time, economy-wide windfall profits tax that could raise over $50 billion and a permanent super-profits tax that could raise $8 billion annually.
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
