Tax reform is more urgent and necessary than ever. During the 2019 federal election, the Liberals promised a comprehensive public review of tax breaks, in an effort to make Canada’s tax system more fair. Tax loopholes in Canada’s tax system contribute to gross inequities, providing wealthy Canadians with tax schemes that allow them to avoid paying their fair share. These tax loopholes directly contribute to growing inequality in Canada, allowing the rich to get richer, while those with low to middle incomes are left behind.
In 2015, the Liberals won a majority government, committing to a review of tax expenditures and cancelling tax breaks for the wealthy — specifically the stock option loophole and for private corporations. Since then, the Liberal government has only made modest changes to improve our tax system, leaving some of Canada’s worst tax loopholes open. Present day conversations about taxes have now evolved to highlight unfair tax breaks for foreign-based e-commerce corporations and the lack of taxes paid for extreme wealth held by Canada’s richest.
Closing just a few of the most regressive tax loopholes would generate at least $16 billion annually while implementing a 1% tax on wealth over $20 million would raise $70 billion over 10 years, according to estimates by the Parliamentary Budget Officer. These additional billions could help fund programs that would make life much more affordable for Canadians, such as access to housing and healthcare. Fair taxation can help us build a country where everyone prospers.
The political climate is promising in this newly elected Liberal-minority parliament. With support from opposition parties on the issue of tax fairness, the time is ripe for implementing solutions to achieve a more fair and just economy. recent survey commissioned by the Institute, shows that an overwhelming majority of Liberal, DP and Green voters would like to see cooperation among the parties to increase taxes on the wealthy — and close tax loopholes to ensure everyone pays their fair share.
‘Filthy Five: Canada’s Tax Loopholes, Part 2’ is licensed under CC BY-NC 4.0
