For several decades we have been bombarded with the fairytale that lower corporate taxes are good for the economy and hence benefit us all. The general idea is that the more corporations make, the more they will reinvest, which in turn will lead to economic growth and more jobs. Despite ample evidence to the contrary, the narrative persists. Even the ultra-conservative International Monetary Fund has stated that, “Progressive taxation is a key component of effective fiscal policy,” asserting that tax rate increases at the top can be done without sacrificing economic growth.
However since 2000 Conservative and Liberal governments alike have almost halved corporate tax rates from 28 to 15 per cent, reducing federal government revenues by billions. Furthermore a 2019 Parliamentary Budget report found corporations avoided paying $25 billion in taxes by moving their money through offshore tax havens. The Canadian Revenue Agency estimates that over $240 billion is hidden in foreign accounts by the wealthiest Canadians to avoid paying taxes.
And now in the middle of a pandemic a Canadian Centre for Policy Alternatives study finds that Canada’s 20 richest billionaires have increased their wealth by a cumulative $37 billion. Loblaws, who offered workers a $2/hr wage increase (lasting for three months) at the start of the pandemic, recently announced an increase in shareholder dividends due to increased profits but refuses to reinstate a pay raise for workers that remain constantly exposed to the virus.
While the rich get richer, the rest of us are made to pay in various ways — from a lack of clean drinking water in some Indigenous communities to the awful conditions in long-term care homes recently revealed by the current pandemic. Politicians often feign outrage and pay lip service in these circumstances, but their actions speak louder than words.
A recent parliamentary vote rejecting an NDP motion calling for a modest one per cent tax on wealth over $20 million along with “an excess profit tax on big corporations that have been profiteering from the pandemic” is an excellent example of this. A significant majority of Canadians (78 per cent) support this idea. The Liberal throne speech in September stated the goal of finding “additional ways to tax extreme wealth inequality” including “tax avoidance by digital giants,” but a chance to show serious intent was squandered.
Thus far the majority of parliamentarians continue to defend corporate interests and policies that are responsible for absurd levels of inequality and have resulted in an unprecedented increase in corporate power and influence. At a time when many find themselves in precarious financial situations and where environmental destruction casts a dark shadow over our futures, we must use our collective power to demand justice and hold our elected officials feet to the fire.
Vagner Castilho is a resident of Wakefield, La Peche and member of the The La Peche Coalition for a Green New Deal/La Coalition de La Pêche pour une New Deal Verte.