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What you need to know about COVID-19: September 18, 2020
If you’re not outraged, you didn’t read the news last week.
Because it stinks – far worse than the pungent odours we get this time of year from the many working farms surrounding the city.
Last week, the Canada Revenue Agency (CRA) released its fifth report on the “tax gap” — or rather its latest investigation into Canada’s tax-dodging culture.
This most recent report delved into corporate tax avoidance, while previous reports looked at sales tax fraud, tax evasion and the use of offshore tax havens. In total, Canada is losing tens of billions of dollars in taxes annually.
The latest investigation found that Canadian corporations should have paid between $9.4 billion and $11.4 billion more in taxes in 2014 than they did. It represents a loss of between 24 per cent and 29 per cent of total corporate tax revenue.
Nice avoidance if you can get away with it.
And they had been getting away with it.
In addition to benefitting from the slashing of corporate taxes by consecutive federal and provincial governments, too many corporations are evidently able to avoid paying their much smaller tax bills.
Again and again we hear corporate tax cuts are needed to encourage businesses to invest in Canada and in Canadian jobs and yet despite the slashing of rates from 29.2 per cent in 1999 to 15 per cent today at the federal level, business investment has barely budged as a share of GDP.
Yet, still, politicians — especially conservative politicians — continue to promise even larger tax cuts, promises that have an impact on the rest of Canadians as federal and provincial coffers lack the revenues to pay for the things that benefit all of us. The latest corporate tax cut is courtesy of Alberta Premier Jason Kenney.
And to be clear, tax-dodging corporations also benefit tremendously from public investments in infrastructure and services like health care and education.
Last week in one news report, a tax accountant blamed the billions in tax avoidance on a complicated tax system.
Seriously, there may be some mistakes made as a result of an overly complex system, but the fact remains dodging taxes has become a Canadians corporate pastime and why not? Until recently, there was little attention paid to the rich and powerful who apparently assumed avoiding taxes is their right.
As for those politicians who continue to advocate for tax cuts for Canada’s super-rich corporations, let’s just say they are full of what the farmers are spreading.
And it’s time they were vigorously challenged on their failed economic policies, policies that leave too many people behind, scrambling, insecure, juggling multiple jobs, without health benefits or workplace pensions.
Canada’s tax avoidance problem deserves our collective anger. It’s a scam that hurts all of us. It deserves more political attention.
Instead, too many Canadians are subjected to the dog-whistle politics being played out in legislatures across the country.
The politics of division are designed to divert our attention from the real issues. And it has been working. But these politics of fear are no better than the sleight of hand tactics used by street magicians.
Politicians who play these games want us to think that immigrants, newcomers and the taxes we pay are the problem, when the real issue is as old as time: one set of rules for the rich and one for the rest.
The real problem is an economic system that leaves too many workers and families behind.
The real problem is governments that do too little and politicians who pander to the worst in humanity.
Toby Sanger, executive director of Canadians for Tax Fairness, said last week’s CRA report in a clear indication that “there is a massive problem in tax dodging, particularly by larger corporations” who were responsible for the biggest share of lost taxes. Even the Canada Revenue Agency admitted to there being “aggressive tax avoidance.”
Canadians lose out twice. First from failed economic policies like basement-level corporate tax rates and secondly from tax avoidance schemes.
Now that the Trudeau government has the information on tax avoidance that it asked for from the Revenue Agency, prompted by tax fairness advocates, the question will be what it intends to do about Canada’s tax dodging culture.
And when asked how Canada can expand its social contract with citizens and how we can afford things like universal childcare or Pharmacare, we can all point to these reports and explain that all it takes is for corporate Canada to pay their low taxes.
Lana Payne is the Atlantic director for Unifor. She can be reached by email at email@example.com. Twitter: @lanampayne Her column returns in two weeks.