“Tax breaks for the wealthy and large corporations are expensive, and the way we pay for them is underfunding of essential public services.” — Larry Brown, NUPGE President
Ottawa (31 Oct. 2017) — Governments underfunding public services like health care, claim that they’re short of money. But as 2 examples that came to light last week illustrate, governments don’t have to be short of money. When governments refuse to make wealthy individuals and corporations pay their share, they are choosing to be short of funds.
“Tax breaks for the wealthy and large corporations are expensive, and the way we pay for them is underfunding of essential public services,” said Larry Brown, President of the National Union of Public and General Employees (NUPGE).
Given a choice between a shorter waiting times for medical treatment and higher profits for wealthy investors, the overwhelming majority of Canadians would pick better health care. Sadly, successive federal governments have made different choices.
Oil and gas companies pay less tax in Canada than in other countries
Canadian tax rates for oil and gas companies are a fraction of what they are in most other countries according to an article in the Guardian. The article compared payments per barrel in different countries for 3 oil companies that operate.
Chevron Canada, Suncor Energy and Canadian Natural Resources Limited (CNRL) are paying between $2.27 and $4.43 a barrel in taxes and royalties in Canada. In other countries, the amounts they pay per barrel range from $11.58 to $30.22l.
e-commerce companies from outside Canada given unfair advantage by weak tax laws
e-commerce companies like Google, Netflix or Facebook are making billions in Canada, but not paying tax on it. In addition to shortchanging public services, that places their Canadian competitors who are expected to pay taxes at a competitive disadvantage.
As a recent Toronto Star column makes clear, the response from the federal government can only be described as weak. The agreement between the federal government and Netflix on funding Canadian content is a good example of how this harms Canada. While Netflix is supposed to provide $100 million a year for 5 years for Canadian programming, that amount is considerably less than what we’d get if Netflix was required to pay HST, income tax and contributions to the Canadian Media Fund.
Debate on tax breaks must include impact on public services
When large corporations and the wealthy get tax breaks, public services will suffer. This is what has happened in Canada. First a round of tax cuts and new tax breaks push up deficits. Then governments use high deficits to justify cutting public services. Then governments start another round of tax cuts and new tax breaks.
What is encouraging is that there is growing awareness of the damage this is doing. But there is still a lot to do to get governments to choose not to be poor.
“We need to be reminding governments that the price of tax breaks for large corporations and the wealthy is things like seniors waiting longer for medical treatment, children without the help they need in school and people sleeping on our city streets,” said Brown.
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 370,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE