The House of Commons Standing Committee on Finance is urging Finance Minister Chrystia Freeland to introduce tax hikes in the federal government’s upcoming budget, which will be tabled near the end of March.
The non-profit Canadians for Tax Fairness was one such witness. It said tax “loopholes” favour the wealthy. “Loopholes cost the public revenue, many exacerbate income and wealth inequality, and many are of dubious benefit to Canadians,” the organization said.
While the committee’s report agreed with that assessment, Conservative members dissented.
“Conservatives dissent to this report because it fails to address the inflation and cost of living crisis created by increasing tax hikes and out of control Liberal spending,” Conservative finance critic Jasraj Singh Hallan told the House on March 10. He said they thus also do not support proposed solutions.
The report recommended the federal government undertake a public review of current federal tax expenditures to identify any “tax avoidance mechanisms that particularly benefit high-income individuals.”
The committee said Canada’s income gap is growing and recommended that Freeland address it through measures such as funding poverty-reduction programs and raising taxes on “extreme wealth.” It also said Ottawa should implement a new tax on “excessive profits,” which it said includes windfalls associated with the pandemic.
Income Gap ‘Relatively Stable’
The Bank of Canada found that the country’s income gap has remained “relatively stable over the past 25 years.”Using Statistics Canada data from the late 1970s to 2019, the central bank found that the largest increases in income inequality happened more than 25 years ago.
The report added that Canada’s income gap grew “substantially” in the 1980s and in the first half of the early 1990s, but has since remained “relatively stable.”
The central bank also said in the report that income inequality has been higher in the United States than in Canada for the past four decades.
