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Results: 1 - 15 of 84
View Peter Fragiskatos Profile
Lib. (ON)
My time is very limited, sir.
On the last point here, certainly the op-ed focused on tech in general. I know your area of expertise is biotech, but I think there's a great deal of overlap.
You, I think in a response to Ms. Koutrakis, talked about IP and tax policy, and you've mentioned tax incentives here again. Could you delve into that a bit more? I know it's unfair because those are big areas and I'm not giving you much time, but it seems that those would be maybe the two key areas, if I've understood you right, we can focus on and really benefit from if we make some changes in those areas.
Andrew Casey
View Andrew Casey Profile
Andrew Casey
2021-05-21 12:20
Yes, but also be careful. If you look at the TRIPS waiver, which has been in the news lately, there's a classic example of something that feels good, that feels like it's going to address a problem but I would argue that it won't. The reality is that's a really significant threat to a lot of our companies because it's essentially sending out the message that, look, if whatever you're working on becomes so valuable to the world that we all need it, we're just going to take it from you. That then becomes a disincentive to investors, so we have to be very careful about how we look at the treatment of IP. IP, at its very core, is essentially the asset. It's the mine. It's the forest. It's whatever other industry you want to use as an analogy. IP is the core of that company, so we have to really be careful of how we treat intellectual property in this country.
With tax incentives, finding different ways to commercialize.... The patent box would be good. The SR and ED tax credit is one of the best tools that we have in this country, but other countries are looking at it and going, “Hey, we can do better”. If you look at Australia, they're trying to get ahead of us. We have to keep it as competitive as possible with other jurisdictions so that they don't get ahead of us.
View Peter Julian Profile
NDP (BC)
Thanks so much, Mr. Chair.
Thanks to our witnesses for coming with such compelling testimony today, and we hope that you and your families continue to stay safe and healthy during this pandemic.
I'd like to address my first questions to Dr. Collins, Mr. Villeneuve and Madam Hamza, and give our deepest condolences for the doctors and nurses who have died during this pandemic and express our gratitude for the incredible bravery and dedication of Canada's nurses and doctors during this unparalleled health crisis. It is something that all Canadians profoundly appreciate, and we know that many have given their lives. Our condolences go to each and every one of those members of your organizations and their families.
We had compelling testimony in the previous panel that over $50 billion every year goes to the ultra-rich and big corporations because of tax cuts, loopholes, and a tax system that is simply broken down.
All three of you have offered compelling reasons why we really need to prioritize health care funding for primary care, for long-term care and the debacle we've seen there, and for mental health care.
Is it not fundamental that we prioritize health care funding and that we put in place a tax system so that everyone pays their fair share and we actually have the wherewithal to put in place the funding for the needs that you have so clearly identified are absolutely essential to meet in the coming years?
Ann Collins
View Ann Collins Profile
Ann Collins
2021-05-20 15:25
Thank you, Mr. Julian, for your well wishes. They are very gratefully accepted on behalf of the CMA.
I'm not an economist. I'm not a tax expert, but I am a family physician and I think that there is no question that the pandemic has fully laid bare the many deficiencies that exist in our health care system. Again, 5 million Canadians are without a family physician. In my province of New Brunswick and in neighbouring Nova Scotia, 100,000 people are on a no-doctor list.
I don't think Canadians are going to let this rest. The importance of health care is so critical. Good health care is critical to a strong and robust economy, and so again we applaud the government for the measures taken in budget 2021 and we look forward to honouring the commitment to primary health care teams and family physicians, who are so critical to the life of a good health care system.
Michael Villeneuve
View Michael Villeneuve Profile
Michael Villeneuve
2021-05-20 15:26
Thank you very much, Chair.
I'll just add quickly that, again, I'm not an expert on what the tax system should be, but of course we would support a fair, equitable tax system.
What we would put on the table is a reminder that we want to provide the best possible care for the best value, and many of the things that we do costs more than they need to. If you think about those 63,000 people who didn't have a long-term care bed because there were only 200,000 beds and there were 63,000 more people, it's not like they don't get care. They go to emergency. They go to the hospital.
Dr. Collins was talking about people who don't have a doctor. They go to expensive places to get that care and they're often sicker and it takes longer, so we believe that a different sort of look at funding health care systems could ensure that we, in a sense, keep people steps back from moving to the more expensive places and use the tax dollars more wisely.
I hope that is helpful.
Angella MacEwen
View Angella MacEwen Profile
Angella MacEwen
2021-05-20 12:34
Thank you very much. It's nice to be here with all of you.
The Canadian Union of Public Employees is Canada's largest union, with over 700,000 members. Our members work in a broad cross-section of the economy such as health care, education, municipalities, libraries, universities, social services, public utilities, emergency services, transportation and airlines.
With regard to this budget, we want to reiterate that investment in the care economy, including health care, child care and social services, will have social and economic returns far higher than the current cost of borrowing. A vibrant, accessible care sector ensures that everyone can participate in the workforce, which will be essential throughout the economic recovery. Government investment in care improves labour market outcomes for women and overall productivity, allowing governments to recoup the upfront costs at the end, so we're very glad to see the investment in child care that was proposed with the provinces.
To make sure this reaches its full potential, we need to see a strong workforce development plan alongside the proposed child care spending to make sure that we have enough trained workers and to ensure that the lower costs of child care we want to see for parents is not being subsidized by pushing the wages of workers even lower than they already are.
In terms of employment insurance, CUPE has long asked for some of the reforms to employment insurance that we see temporarily implemented here such as the lower-paying Canadian entrance requirement and the extra five weeks in high unemployment locations.
We were disappointed to see that the promised extension of EI sickness benefits to 26 weeks has been delayed until the summer of 2022, because that leaves a substantial number of long-haul COVID patients without the economic supports they'll need. They will have exhausted all other benefits, and implementing the EI sickness benefits right now would have been a way to kind of bridge that gap for a lot of people.
We are happy that there is substantial money for training; however, nearly all of it is being targeted for employer-led and employer-developed training. There is no direct support for workers themselves and no support for worker-selected training. The need for training supports and flexibility on training will only grow more urgent as Canada's economy transitions to create more green jobs.
On the minimum wage, CUPE is happy to see the federal government establish a federal minimum wage of $15 per hour. We recommend that the federal minimum wage be adjusted upward annually faster than CPI for the first five years, recognizing that the costs of essentials such as food, water and shelter are increasing faster than the overall rate of inflation, and the $15 rate is what was proposed several years ago and has already been eaten away by several years of inflation.
In terms of tax fairness, this budget was a big disappointment. Tax cuts since 2000 have reduced federal revenues by over $50 billion annually, and the major beneficiaries of these tax cuts have been large corporations and the wealthiest Canadians. These cuts have left a huge hole in federal budgets and have had a ripple effect across provincial budgets as the federal government stepped back from funding essential public services.
The federal government could have increased revenues by over $50 billion without increasing tax rates on middle- and low-income Canadians with fair tax measures like restoring the federal corporate tax rate to 21%; eliminating wasteful and regressive tax loopholes; changing how we tax capital gains deductions, the benefit of which goes to the top 10% of income earners; cracking down on tax avoidance in ways that we know will make a difference rather than just continuing consultations; and introducing a wealth tax on estates over $20 million. The federal government should also still consider introducing an excess profits tax that could raise up to $8 billion, even if it's only on 15% of excess profits for one year.
In terms of transparency and accountability for public supports, unions asked the federal government, when it was implementing supports such as the wage subsidy, to make sure the rules for this program were fair. What we've seen is that did not happen, so lots of very profitable companies have taken public money at the same time as they were paying out big bonuses to executives and dividends to shareholders, laying off or locking out workers and using the wage subsidy as a way to push workers to accept lower working conditions and wages.
There's substantial room for improvement in terms of the transparency of corporate support to ensure the effectiveness and fairness of public spending. CUPE has recommended several ways in which the government could strengthen these conditions and improve transparency and accountability. These include clauses that mandate labour protections for workers, including protection of benefits and health and safety protocols, and ensure protections for whistle-blowers. When there is a union in the workplace, include them in the negotiations for wage subsidies and other supports. For a year after a corporation receives public subsidies or loans, implement prohibitions on dividend capital distribution and share repurchases.
As well, make information about all of this, about how public money is being spent, clear and publicly available.
Thank you.
View Peter Julian Profile
NDP (BC)
Thanks very much, Mr. Chair.
I'm going to come back to Mr. Aylward.
I know that many members of the Public Service Alliance of Canada work within the CRA. We've heard from CRA employees at this committee that they have never been given the legislative tools and resources to really crack down on overseas tax havens, which we know cost us $25 billion in taxes every year. It's a national shame that gets far less media coverage than it should. We know about the billionaires with no wealth tax, and the huge profits for corporations with no excess profits tax.
Mr. Aylward, in your statement you referenced the growing inequalities that we're seeing in this country. How important is it to have in place a fair tax system where everybody pays their fair share so that we have the resources and wherewithal to provide supports to everybody in the country and we stop the growing gap between a very small number of very wealthy people and everybody else?
Chris Aylward
View Chris Aylward Profile
Chris Aylward
2021-05-18 17:12
My home department is the Canada Revenue Agency, and a lot of the inequities we see in the country are economic inequities. Until we get a good grasp of that and make sure that all loopholes are closed, the wealthy are going to keep getting wealthier and, unfortunately, those who are struggling will continue to struggle.
A wealth tax is long overdue in this country. It would ensure that the wealthiest pay their fair share. They're not right now, and until we get a good grasp of that, unfortunately it's going to continue that way. The numbers will continue to go in the opposite direction, which is not going to be good for the economy, nor for Canadians.
View Tamara Jansen Profile
CPC (BC)
Yes, I know, but come on, don't cheat me out of this one.
Mr. Moody, in 2018 CPA Canada put out a report that stated the following:
Canada needs to ensure we continue to create jobs, attract investment and remain competitive. But, on these vital measures, our current tax system is falling short, and Canadians and their businesses risk falling ever more behind their global peers.
Especially after the pandemic, more than ever we need to be an attractive place for investors and job creators. Do you see any serious attempts in this budget to tackle the challenge of creating a competitive taxation environment that would attract business to Canada?
Kim G. C. Moody
View Kim G. C. Moody Profile
Kim G. C. Moody
2021-05-18 17:25
No. The only exception to that would be the compliment I gave in my opening remarks, which was a bit of a surprise, for the immediate expensing of certain capital assets. That was unexpected and welcome, but outside of that, no.
Toby Sanger
View Toby Sanger Profile
Toby Sanger
2021-05-18 11:07
Thank you very much, Chair, and good morning members.
There are a lot of positive measures in Bill C-30, and I'd like to commend the government for introducing them. These include the $15-an-hour minimum wage, extension of COVID and EI benefits, funding for child care, funding for infrastructure, funding for health care and much more. We're glad the federal government will finally apply the GST, starting July 1, to imports of digital services, short-term rentals through digital platforms and goods supplied through fulfillment warehouses like Amazon. This is long overdue but still appreciated, and it is one step towards levelling the digital playing field.
For far too long, Canada has given foreign digital giants—some of the largest companies in the world—generous tax preferences at the expense of Canadian companies and producers. This has contributed to hundreds of business closures, thousands of jobs lost and billions in revenue foregone. Since the pandemic began, it has only gotten worse, as sales by companies like Amazon have exploded while main street businesses across Canada have suffered enormously. The government should eliminate the tax deduction for advertising on foreign Internet platforms. This has contributed to billions in advertising flowing to Google and Facebook, and loss to Canadian media outlets.
We're glad to see the government commit to introducing a digital services tax on the revenues of foreign e-commerce giants starting next year, but the proposed tax will only apply to a small number of companies in specific sectors. Because a digital economy can't be ring-fenced, the Canadian government must also support fundamental international corporate tax reforms at the OECD negotiations now taking place, including support for a global minimum corporate tax at 21% or higher, as U.S. President Joe Biden has proposed; treating multinational enterprises as unitary enterprises for tax purposes; and allocating the profit of multinational enterprises among countries using real economic factors, just as we do among provinces in Canada.
We're glad the government has also finally taken some action on restricting a number of corporate tax loopholes and the stock-option deduction loophole. However, we believe the stock-option deduction loophole should be completely closed instead of just partially closed.
This government should also take inspiration from U.S. President Joe Biden, who is planning to eliminate lower tax rates on capital gains for the wealthiest. It's unconscionable that the wealthiest in society pay a lower tax rate on their investment income than ordinary working people pay on their employment income. This is something that wealthy investors, such as Warren Buffett, Bill Gross and Bill Gates agree with eliminating.
Speaking of the wealthy, inequalities of wealth have only gotten worse during the pandemic, with Canada's billionaires increasing their fortunes by about $80 billion over the past year. A mildly progressive wealth tax on fortunes of over $10 million could raise about $20 billion a year. I'm glad that this government has committed to identifying ways to tax extreme wealth in its throne speech, but disappointed that there was nothing about it in the budget. A large majority of Canadians, including Conservative supporters, support having a wealth tax. Even the IMF and OECD both recently called for countries to introduce and expand inheritance and wealth taxes. I hope to see them in a number of different election platforms soon.
Just as Canada's billionaires have become much wealthier during the pandemic, many large corporations have made record profits. The study we released yesterday revealed that 50 of Canada's large corporations made record profits last year, with a number of them also collecting the CEWS wage subsidy and paying low rates of tax. When the CEWS program was first introduced more than a year ago, I was the first to call for much stronger conditions. This would have prevented the type of misuse and wastage of public funds that we've seen with this program. We should now do what we did during the world wars and what the IMF recently suggested and introduce an excess profits tax and pandemic surtaxes on those who have profited excessively during the pandemic, to recover some of those public funds.
We're glad the government is making carbon incentive payments more visible. We've advocated for this for many years. However, the federal carbon pricing framework also needs to be significantly strengthened by ensuring that large emitters pay the full carbon price and by applying carbon tariffs and rebates on imports from and exports to countries without carbon pricing so that Canadian industry and jobs aren't adversely affected. We also need to finally eliminate the federal fossil fuel subsidies. It's long overdue that we end this climate hypocrisy.
Finally, I'd like to commend the finance Minister for committing to introduce a public registry of the real owners of companies. This will help reduce money laundering, tax evasion, and other criminal activities.
The federal government should also increase transparency and accountability in other ways, including strengthening whistle-blower protections, and requiring that large multinational corporations publish country-by-country reports of their sales, profits and taxes paid.
Thanks very much, and I look forward to a further discussion and questions.
View Peter Julian Profile
NDP (BC)
Thanks very much, Mr. Chair.
Thanks to all of our witnesses for being here today. We hope you and your families continue to be safe and healthy as this third wave crashes on our shores.
Thank you for your important testimony on the many concerns that Canadians have with the lack of a budget addressing real needs in so many ways.
I'd like to start by asking Mr. Sanger a question.
Mr. Sanger, you've been very eloquent about previous crises like the world wars. We had strict laws against profiteering and to ensure that we were all in this together. Today you point out that Canadian billionaires have reaped over $80 billion during this pandemic. There is no wealth tax. Canadian corporations are at record profit levels. There is no tax on excess profits.
At the same time, we see in this budget bill the slashing of COVID benefits while the third wave is crashing on our shores: students being forced to pay their student loans; 60% of seniors excluded from even a modest top-up, which would bring them closer to the poverty line; people with disabilities getting no supports at all; an increase in homelessness; 10 million Canadians who can't pay for their medication, and the government says we can't afford pharmacare.
My question for you is simply this: Is there a cost that we pay as a society, and do Canadians pay a cost, for the fact that we have such an inequitable tax system, with banks and billionaires able to reap the profits and profiteer during a pandemic while so many Canadians struggle?
Toby Sanger
View Toby Sanger Profile
Toby Sanger
2021-05-18 11:59
Absolutely, there is a cost. We came out with a tax fairness recovery plan before the budget in which we outlined a number of ways the federal government could generate over $70 billion in additional revenues. These could then be used both for paying for the pandemic by helping to fund the recovery and by introducing new programs such as those.
I do want to say that, after hearing the testimony of others, I really do want to commend parliamentarians and the government for bringing in really important programs. I do think that Canada's programs were some of the best in the world, but I do get concerned when some of them are not that well targeted, which then undermines confidence in government programs. Not only does it cost more, but it also undermines confidence in government programs.
The method of moving forward with things like the CEWS program can be problematic in that way. It would be better if it were targeted at those who really need it, and funds then don't go to things like hedge funds or highly profitable businesses, as we have outlined.
Then there are also different ways that the government could recover some of those funds, such as through an excess profit tax or through other things. We have really seen increasing inequality during this pandemic, and I think people are really compassionate and understanding about what's happened.
We do need to move forward, and there are a lot of ways that the government, which has very large deficits, is going to have to pay for these. There are a lot of ways that government can move forward by taxing the highly profitable corporations and the wealthy who have done very well not only over the past decade but over the pandemic as well.
View Peter Julian Profile
NDP (BC)
Thank you very much, Mr. Chair.
Thanks to all of our witnesses for coming forward today. It's very important testimony. We hope that you and your families continue to be safe and healthy through this pandemic as the third wave crashes on our shores.
I'd like to start with you, Mr. Macdonald. Thank you so much for your testimony today. You pointed out a number of things that should happen with overall revenue. You're not concerned about the deficit, but we all need to be concerned about the profoundly unequal tax system that we have. The government is refusing to put into place a wealth tax, though it worked in the Second World War; is refusing to put in place a pandemics profits tax, even though we know it's an effective measure that other countries are taking; and is refusing to take any meaningful action against overseas tax havens that the PBO tells us cost over $25 billion a year.
How important is it to have a fair tax system to actually put in place those measures so that we have the wherewithal and the resources to help so many people who are struggling now through the pandemic and in the rebuilding afterwards?
David Macdonald
View David Macdonald Profile
David Macdonald
2021-05-18 13:26
Thanks, Mr. Julian, for the question.
Certainly, the tax system can play the role of equalizing or creating a more equal society in an after-tax sense, which is to say taking that money and redistributing it, but also restricting the maximum gains you get at the top end.
In terms of raising the revenue, of course, what this does is it provides us with fiscal room for additional programs. For instance, if we wanted to further expand the child care program or provide much better standards of long-term care from new transfers to the provinces, this is the sort of thing that would give the federal government more flexibility in doing so.
The present federal government's take of the Canadian economy in terms of revenue to GDP is relatively low. It has been much higher in the past. We're nowhere near all-time highs in the revenue take on either the revenue side or the expenditure side of the federal government. The points that you mention about a wealth tax or an excess profits tax are additional things that I think are worth examining in the context of COVID-19. That's in addition to other measures—for instance, some way in the short term of clamping down on profit-shifting as we wait for the BEPS committees at the OECD to work through international proposals on how we do that in a more coordinated way.
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