Jagmeet Singh takes aim at billionaires, promises to close corporate tax loopholes

Click to play video: 'Canada election: NDP’s Singh promises to close corporate tax loopholes'
Canada election: NDP’s Singh promises to close corporate tax loopholes
Canada election: NDP's Singh promises to close corporate tax loopholes – Aug 30, 2021

NDP Leader Jagmeet Singh is recommitting to a crackdown on artful tax dodgers with high net worth.

The pledge is part of a basket of measures that aim to raise revenue while lowering inequality, but that fall short of covering the marquee expenditures atop the New Democrats’ election platform, economists say.

At a campaign stop across the Rideau Canal from Parliament, Singh said he would zero in on tax evasion and close loopholes that benefit billionaires.

“We believe that the ultrarich should pay their fair share so we can invest in people,” Singh said.

“(Liberal Leader) Justin Trudeau and Conservatives before him have let the super rich have a free ride. We want to put an end to that.”

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The New Democrats’ plan to halt that luxury flight ranges from tougher enforcement at the Canada Revenue Agency to enhancing corporate tax transparency and capping stock option gains that are taxed at a lower rate.

Singh said the moves could raise revenue to help pay for programs such as universal pharmacare and more affordable housing. He suggested that investing an additional $100 million in the CRA would lead to a return of up to $25 billion in taxes and revenue in one year.

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He also spoke about cracking down on large companies that make profits in Canada but pay little to no taxes here.

“These are tens and tens of billions of dollars of revenue that we could increase that would help us pay for the programs that we need,” he said.

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In 2019, two reports from the CRA and the parliamentary budget officer found that Ottawa could be losing out on up to $51 billion in uncollected taxes each year due to illegal tax evasion and legal tax avoidance, both of which rely heavily on offshore tax havens.

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CRA data from earlier this summer showed its recent efforts to combat tax evasion by the super rich resulted in zero prosecutions or convictions.

The Liberals are also pledging to crack down on illicit tax schemes and launch a new ownership registry for numbered companies by 2025.

Conservatives have promised to reform the CRA and imbue Canada’s taxpayer ombudsman with order-making authority.

The NDP platform is not costed, nor is the Tories’ and the Liberals have not yet put out a platform.

Big-ticket items in the NDP platform include: a guaranteed livable income; universal pharmacare and dental care as well as free mental health care for uninsured patients; $10-a-day childcare “for all parents”; an end to for-profit long-term care; and slashed student debt.

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Canada election: Singh pledges to tackle student debt crisis if elected

Some of the promises start with smaller targets — the guaranteed minimum income would begin with low-income seniors and Canadians with disabilities — but look to scale up to comprehensive social programs.

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They don’t come cheap.

A guaranteed livable income would cost taxpayers between $84.2 billion and $197.2 billion annually by 2024-25, depending on the parameters, according to a November report from the parliamentary budget officer.

The NDP’s universal pharmacare scheme would see Singh spend $38.5 billion over five years, reaching more than $11 billion annually by 2024-25, according to an estimate by budget officer Yves Giroux published Friday.

A national child-care program that sets its sights on $10 a day will cost about $30 billion over five years, based on the amount earmarked for it in the Liberal budget from April.

As a counterweight to that hefty expenditure scale, Singh has proposed higher taxes on wealthy Canadians and corporations.

The measures include a wealth tax of one per cent on households with fortunes topping $10 million, an income tax hike of two points to 35 per cent for the highest bracket and a three-point hike to put the corporate tax rate at 18 per cent.

Singh would also impose a 20 per cent foreign buyers’ tax on residential property purchases and a temporary COVID-19 “excess profit tax” of 15 per cent, applicable to extra earnings by big companies.

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“It isn’t going to be the workhorse of revenue generation that income taxes or sales taxes are, but I think it is really important for that other objective of decreasing inequality,” said Sheila Block, a senior economist at the Canadian Centre for Policy Alternatives, referring to the wealth tax.

Giroux estimated last year the NDP’s then-proposal of a wealth tax on households with net worth topping $20 million would yield $5.6 billion from 13,800 eligible families.

Alex Usher, president of the Higher Education Strategy Associates, a research and analysis firm that consults for governments and post-secondary institutions, said he doubted the revenue-generating tactics would gin up hundreds of billions of dollars.

The amounts raised would not be insubstantial, however. The hypothetical tax on big corporations’ excess profits alone would generate $7.9 billion for Ottawa, Giroux said in an April report.

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“I know there’s going to be folks saying it’s not possible. But those folks have been in power for a long time … I believe if you’ve got a will, if you believe in making these things happen, you can make it,” Singh said.

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