October 13 2022
“There’s no time to miss out on revenue, but right now we see people suffering across the country. $30 billion could make a huge difference in people’s lives.” — Bert Blundon, NUPGE President
Ottawa (13 Oct. 2022) — Federal Revenue Minister Diane Lebouthillier needs to be transparent with Canadians about how governments lost over $30 billion in revenue last year due to an unexplained doubling in corporate tax avoidance, says a new report by Canadians for Tax Fairness (CTF).
Despite economic troubles, corporations are doing better than ever
The average corporate tax avoidance in the 3 years before the pandemic was $13.5 billion.
“This unexplained loss of $30 billion could not come at a worse time,” said DT Cochrane, economist for Canadians for Tax Fairness, who authored the report. “Canadians face inflation, a housing crisis, understaffed hospitals, and we are likely heading for a recession, when public needs can be expected to rise.”
“Canadians for Tax Fairness is calling for transparency from Minister Lebouthillier about the specific tax tactics that allowed this unexpected doubling of corporate tax avoidance,” said Katrina Miller, executive director.
The National Union of Public and General Employees (NUPGE) is a supporter of Canadians for Tax Fairness. “There’s no time to miss out on revenue,” said Bert Blundon, NUPGE President, “But right now we see people suffering across the country. $30 billion could make a huge difference in people’s lives.”
Report shows corporations like Suncor Energy Inc., Shopify, and Thomson Reuters Corp. paid $1B less in taxes
The C4TF report tracked the profits and tax paid by 123 profitable Canadian companies with data for the 5 years studied and market capitalization of $2 billion or more. Together, these companies avoided paying $30 billion in tax in 2021 alone, though corporate filings and Statistics Canada data don’t indicate a reason.
No significant corporate tax rule changes came into effect for 2021.
The usual statutory tax rate for Canadian corporations is 26.5% of profit. In 2021, tax avoidance lowered the effective tax rate to just 15% for these 123 companies.
Brookfield Asset Management tops the list of tax avoiders, having reduced its tax bill by a whopping $3.5 billion, almost $1 billion more than the second place Canadian Natural Resources Ltd., which paid $2.6 billion less than the usual statutory tax rate.
Suncor Energy Inc., Manulife Financial Corp., Enbridge Inc., Royal Bank of Canada, Thomson Reuters Corp., Fairfax Financial Holdings Ltd. and Shopify Inc. all paid at least $1 billion less than they would have at the usual rate of 26.5%.