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tax fairness

The rocket-fuelled fury of the worried taxpayer is a constant feature of tax culture for good reasons.
“Never before has the concept of tax fairness been so prominent in the Canadian public’s consciousness."
Requiring millionaires to pay more tax is certainly not an attack on the middle class or mom-and-pop corner stores.
One thing I have learned from my cross-Canada tour is that once you get outside of Prime Minister Justin Trudeau's Ottawa, it ain't sunny ways. More and more Canadians are feeling that the system is rigged against them. And one of the most disturbing economic indicators is the rising number of working poor.
The Liberals failed to take any meaningful action on closing tax loopholes or leveling the digital playing field. They failed to deliver, again, on their election promise to end the stock options deduction that gives almost a billion dollars to some of the richest people in Canada. They failed to make the tax system simpler or fairer.
It is outrageous enough that wealthy clients got off with a slight reprimand. KPMG has, so far, paid no price for their role. The committee let Canadians down by not recommending a full investigation into this case and laying charges against KPMG if the evidence warrants it. And Canadians are right to keep demanding one.
There's been a lot of outrage over a new report that shows that Canada's wealthiest CEOs are paid 193 times more than the average Canadian. But there's an even darker side to the story. Ordinary taxpayers are subsidizing those multimillion-dollar salaries, courtesy of loopholes in our tax system.
In the past, Google's actual overseas tax rate has been as low as 2.4% -- across many countries where normal tax rates would be over 20%. Even Ireland charges a measly 12.5%. Google has maintained that these arrangements are entirely legal. Many countries have disagreed.
There is little argument that Canadians deserve a fair tax system. It is unacceptable that there be even the slightest perception that corporations and wealthy individuals can avoid tax investigations by hiring a lobbyist or high-priced tax lawyer. The minister should be demanding answers -- on behalf of all Canadians -- from her senior managers.
Taxes have been a key issue in this federal election. Canadians for Tax Fairness has reviewed all of them and offers this analysis: Conservatives tax cuts make taxes even more unfair. Liberals would raise taxes of the top 5% but cut them for the next richest 15 per cent. NDP would raise revenue by hiking corporate taxes.
The big spending on the income splitting tax break, combined with the impact of lower oil prices has already left only a razor-thin balance and the Parliamentary Budget Officer predicts the budget will slip back into deficit in the next few years. Since it is no secret that this budget sets the stage for the upcoming federal election it is time for us to take a long hard look at the people we elect. We should not allow ourselves to be tricked by tax cut treats but think about who offers a plan for the future. Legacies take guts.
The Harper Conservatives have done a lot of damage to Canada. It has been the proverbial death by a thousand cuts: health transfers, aboriginal education and health, child care, social and co-op housing. The list goes on. It has increased stress on ordinary Canadians and created a huge social, economic and environmental deficit. And it has increased unemployment and harmed economic growth. The big question will be: Can damage be undone without raising taxes on 90 per cent of middle and lower income Canadians? The answer is yes.
Tax compliance is a two way street. We trust that our friends, neighbours and business partners are honest and committed to paying their fair share. Instead, in the spirit of "penny-wise, pound-foolish," the government has cut the CRA more than any other department. The result is that the CRA now lacks the highly trained staff to handle complex cases. Wealthy Canadians know their chances of getting caught are small.
The case for change has never been stronger. If they want to do more than duct tape a broken system, Justin Trudeau, Thomas Mulcair and Elizabeth May need to adopt tax reform as a major thrust in their campaigns. So far, all we hear are general platitudes that avoid the real business of change. They underestimate voters' growing distrust of the current system.
Restoring the corporate tax rate would be a good start. When Ontario began cutting that rate in 2010 it was based on an idea that companies would use the savings for job creation and to develop new markets and products. That has not panned out. Instead Canadian corporations are sitting on $600 billion of hoarded cash that benefits very few.
As the old saying goes: "A buck is a buck." But at tax time, there is a different set of rules for corporate insiders using a loophole for stock option deductions. This loophole has a $1 billion annual price tag for the rest of us.
A few small tax perks were closed this budget time around. But the revenue resulting from tweaking non-resident trusts and a handful of other insider loopholes are estimated at only $50 to $80 million in 2015-16. It makes one wonder if Jim Flaherty is committed to the business of fair taxation.
Last year's budget included several measures to combat tax haven abuses, including setting up a snitch line and rewards for information on those using tax havens to avoid paying their taxes. Good first steps, but far behind what other countries are doing. Canada has to step up its game.
Top income earners with taxable income of over $135,000 are taxed at 29 per cent -- about average for an industrialized country. But because they have a lot more tax loopholes they can take advantage of, the average income tax rate paid by the richest 1 per cent was only 19.7 per cent. How is that fair?
In the real world, much of the money the rich and corporations gained from tax cuts is being socked away, often in tax havens. The amount of Canadian money in tax havens is at an all-time high. One of the main reasons corporations are not investing is that demand for products and services is weak because of stagnant incomes of middle and lower income Canadians.