Canadians for Tax Fairness seeks tax fairness measures in federal government fiscal update

New polling from Environics Research shows the majority of Canadians support the government in making “major changes to fix long-standing problems in society,” such as inequality. Another poll in Quebec found the majority of Canadians are willing to pay more in taxes.

Ottawa (05 Nov. 2020) — Canadians for Tax Fairness is calling on the Trudeau government to follow up on fair tax commitments it made in the September Speech from the Throne, including tax measures to address extreme wealth inequality.

The need for action is more urgent than ever. 2 recent reports show the divide between the rich and poor in Canada is getting worse under the pandemic.

Wealth tax and closing loopholes needed 

Different tax policies that the government should use to reduce inequality include closing tax loopholes, introducing an annual wealth tax, and an excess profits tax on large corporations that have profited from the pandemic. Canadians for Tax Fairness was pleased to see the NDP recently propose an excess profits tax, along with other progressive tax reforms, that would target inequality while generating billions to help pay for COVID-19 and critical public services.

Fair taxes will help fund the investments needed for recovery

It’s becoming clearer that now is the time to make those investments. The Bank of Canada recently announced interest rates will remain at record lows until at least 2023, allowing government to spend significantly on programs that will help individuals, communities, and economies recover from the pandemic. The International Monetary Fund also recently recommended that increasing public investment will help create millions of jobs and “revive economic activity from the sharpest and deepest global economic collapse in contemporary history.”

New polling from Environics Research shows the majority of Canadians support the government in making “major changes to fix long-standing problems in society,” such as inequality. Another poll in Quebec found the majority of Canadians are willing to pay more in taxes.

Automatic tax filing needed to ensure vulnerable receive benefits they’re entitled to

Canadians for Tax Fairness will also continue to push for the government to follow through on their promise during the Throne Speech to introduce automatic tax filing for vulnerable Canadians. Millions lose out on benefits due to barriers when it comes to filing their taxes. Automatic tax filing will help bridge some of these gaps, but additional investments are needed to improve how vulnerable individuals engage with the tax system.

The homeless, Indigenous peoples, undocumented individuals, persons with disabilities, seniors, and unbanked persons encounter many obstacles in filing their taxes and receiving benefits. While automatic tax filing is an important step, the government will need to strengthen other resources, such as internet access, education and outreach to help individuals who need it most. A recent CBC news story explored the challenges Canadian sex workers face when it comes to filing taxes and receiving important benefits, especially in a pandemic that has affected their employment.

Clawbacks from lower-income workers greater than what the wealthy pay

Making taxes easier to file isn’t the only fix needed. According to a report by Canadian Press, a federal government study showed that lower-income workers experience more claw-backs in taxes and benefits for extra earnings — even more than those at the top. The report has renewed calls from tax experts for a sweeping review of the tax system to ensure it delivers help to those who need it and does not disincentivise worker participation. As anti-poverty advocates have pointed out, a review should also consider other factors that influence work decisions, such as the cost of child care and access to benefits.

These examples underline why any review of Canada’s tax system must include input from marginalized communities, vulnerable individuals, and lower-income workers.
 


NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 390,000 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