Canadians for Tax Fairness - tax the rich so we don't have to eat them

 

December 2024

Dear Chris, With the year winding down, we're reflecting on our most prominent accomplishments of the past 12 months. As passionate problem solvers, we tend to focus on the challenges we face, and sometimes, this comes at the expense of celebrating our successes. Our team is proud of our role in creating these progressive tax changes - some in the form of baby steps and some in giant leaps - and grateful for your essential support. We are so excited to share our plans to advance tax justice in Canada in 2025, but for now, here is a look back at our top tax fairness wins of 2024. Katrina Miller, Executive Director

Our top tax wins of 2024

1. Shrinking the capital gains loophole Closing the capital gains loophole in Canada is long overdue. We have been advocating to end this unfair tax break for over a decade. Income from investment shouldn’t be taxed differently than income from work. Period. We’re glad to see this important tax justice issue get the attentionit deserves, and we will keep pushing to have the capital gains loophole closed completely - because a buck is a buck!

2. DST achieves royal assent After many years of waiting on an international treaty with the OECD, we are thrilled that Canada has demonstrated the courage to establish its own tax on big tech. Companies like Amazon, Uber, and eBay rake in huge profits from Canadian consumers, and those profits should be subject to Canadian taxation. We were pleased that the Digital Services Tax received royal assent over the summer and look forward to it coming into full effect.

3. UN tax convention terms of reference pass In an unprecedented move towards international tax fairness, the terms of reference for the UN tax convention were passed in August. We’re grateful to all of the passionate advocates working toward this encouraging achievement, especially our partners at the Global Alliance for Tax Justice. Surprisingly, Canada was unsupportive of these progressive steps toward tax fairness for all nations. We continue to work with GATJ to push our government to do better in supporting tax justice for all.

4. Canada's Global Minimum Tax Act enacted A global minimum tax has been many years in the making and in 2024 it officially came into effect! The GMT is designed to mitigate the loopholes multi-national corporations are currently using to shelter profits from tax implications, marking a great step forward for tax fairness in Canada and around the world.

5. C4TF reports galore! Last but certainly not least, we are so proud of the many reportswe released this year. With one report authored in partnership with the CCPA as well as several from our new researchers, we covered tax regression over the past decades, capital gains rates impact on productivity (spoiler alert: there is none), rising profitsand lagging investment, tax breaks fuelling the housing crisis, and excess profits.

What our reports revealed:

- Our report with the Canadian Centre for Policy Alternatives, Canada’s shift to a more regressive tax system, 2004 to 2022, revealed that contrary to popular assumption, Canada’s tax system is regressive and places the lowest tax burden on its wealthiest citizens. This landmark study showed how, over the course of nearly two decades, Canada’s tax system has increasingly favoured the ultra-rich, contributing to growing income inequality and entrenching a deeply disproportionate distribution of wealth. - Our Productivity and capital gains inclusion rates report looked at capital gains taxation over forty years and found that there is no correlation between capital gains tax rates and economic productivity. However, there is evidence that income inequality stymies productivity overall. We shut down anti-tax fearmongering and showed that closing loopholes is a more effective way to improve productivity than giving tax breaks to the wealthy. - With Profits rise as investment stalls in Canada's affordability crisis, we uncovered that 2023 corporate profits were 54% higher than in 2019 while corporate investment remained flat. Our findings dispelled the notion that low corporate taxation leads to greater economic investment and uncovered that Canada’s largest corporations are extracting wealth and funneling them to the richest Canadians. - In How tax breaks are worsening Canada’s housing affordability crisis, we discovered that while wages increased by only 5% in 2023, rent went up by 8% and real estate profits increased by a staggering 40% above their pre-pandemic average. Tax loopholes have dramatically increased the use of housing as a financial investment, driving up costs and furthering precarity for renters. - With Taxing excess profits in Canada: An urgent proposal for action, we highlighted that from 2021 through 2023, Canadian corporations collected $441 billion more in profits than expected based on their average profit margin from 2017 to 2020. This sets up a key goal going into the 2025 federal election: an excess profits tax across all sectors is long overdue in Canada and we will continue to provide the numbers to back this up.

Thank you to all of the supporters who fund our work to push back against disinformation with cold, hard facts!

C4TF in the news

A GST holiday could benefit struggling Canadians and the middle class. Just not the way Justin Trudeau’s doing it Our executive director, Katrina Miller's op-ed in the Toronto Star outlines why the GST holiday will hurt more than help without an excess profits tax to pay for it. READ

How taxing the rich can help fix the housing crisis Our communications coordinator, Erica Shiner, wrote about how ending the financialization of housing in Canada, fuelled by unfair tax breaks, is a key component of addressing the housing crisis. READ

We’ve worked toward a wide range of tax justice aims in 2024, and we are deeply grateful to all of the supporters and allies who helped us achieve these important goals. Looking towards 2025, we're entering the new year with a refreshed resolve to stand up to corporate power and advocate for meaningful tax justice across our country. Pitch in here to help us continue our fight for tax fairness in Canada!

We don't take corporate donations so we can freely demand that corporations pay their fair share. We don't have charitable status so we can hold governments to account. Our research and advocacy work isn't possible without supporters like you. With your help, we can continue fighting for a fairer and more equitable tax system.

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