FacebookTwitterGoogle+RedditEmail

Canada’s Liberals Need to Address Progressive Tax Reform

Justin Trudeau is fond of saying “Canada is back” and in some genuinely gratifying ways it seems to be the case. But by far the most important and substantive evidence for this claim is still missing: an indication that the new government is willing to seriously address the issue that a genuine return to normal rests upon. That issue is how do we recover from nearly 20 years of systematic looting of the national treasury through reckless tax cuts for high income earners and large corporations?

Don’t get me wrong. I feel the same relief as every other Canadian that public scientists can now speak their minds, that Harper’s war-mongering is history, that we are overnight no longer a pariah on the world stage, that there is at least hope that Ottawa will take aboriginal concerns seriously and that ministers with a passion for their portfolios are more likely to deliver the goods.

But these are the low-hanging fruit of the “Canada is back” mantra because none of these initiative costs much money. The only commitment so far to address the enormous social and other deficits racked up over two decades is a modest increase for the highest income earners. Otherwise the cupboard is bare. And past Liberal governments, of course, helped make it so.

To reverse this ideological recklessness Justin Trudeau will have to demonstrate an extraordinary challenge to his party’s twenty year commitment to smaller government. On whether he even wants to and if he does, whether he is up to the task the jury is out. One thing is certain – without sustained public pressure Trudeau’s Liberals will be content to administer the fiscal status-quo they inherited from Stephen Harper.

Their first test is on the table right now. I am referring to a report produced by the group Canadians for Tax Fairness – C4TF – (disclosure: I am on the board) detailing the extensive damage done to the Canada Revenue Agency (CRA) by the Harper government. The report is unprecedented in that it was produced with the enthusiastic co-operation of twenty-eight (current and recently retired) tax auditors, fraud investigators and managers of the CRA. Many of them had approached the C4TF over recent years with revelations of Conservative efforts to weaken the agency’s ability to collect revenue owed to the government. According to the report the interviews revealed repeated themes:

* Politicians and lobbyists are increasingly finding ways to influence CRA operations.

* Corporate lobbying to avoid prosecution is a reality

* Employees are aware of political interference about proceeding with investigations.

* There are high attrition rates of experienced professionals

* Reduction or shutdown of enforcement offices across the country

In terms of lost revenue the key finding was the government’s systematic gutting of the tax division responsible for investigating off-shore tax havens and recovering the revenue lost to the resulting tax evasion and avoidance. C4TF estimates that there is at least $199 billion in Canadian wealth hidden in tax havens around the world resulting in the loss of up to $10 billion in revenue every year.

The report calls on the Trudeau government to fundamentally change the CRA’s priorities – away from harassing charities, ngo’s and ordinary taxpayers making errors and onto the wealthy and large corporations where the vast majority of revenue is lost.

The media, however, is not focussing on the billions in lost revenue and the damage done to the CRA and instead is highlighting the issue of how the twenty-eight CRA employees have allegedly violated the ethics rules that they agreed to as part of the oath of office they signed. There is whistle-lower legislation but it does not protect employees who openly criticize public policy. The Ottawa Citizen quoted Donald Savois,  an expert in the area, calling on the government to investigate what he sees as a breach of ethics. It should have written and editorial calling for the government to fix the CRA.

There are some encouraging signs that the government might actually make the issue a priority though it comes not from the economic ministries. Foreign Affairs Minister Stephan Dion has made the most encouraging comments:

“I’d like to address the global economy. It seems like each time we address the problem, like the circulation of funds, there are businesses using tax havens and they are doing things in our countries, but they don’t pay tax. It’s an enormous problem. Whenever [it comes up], I’m told, ‘Well, that’s up to the international level to resolve.’ I’d like to see what Canada could do.”

Dion is an influential minister and has the respect of Trudeau but it will be Finance Minister Bill Morneau who will ultimately decide how much of a priority to make of the tax haven issue. He is clearly aware of it and under enormous pressure to find revenue that doesn’t require actually raising taxes, stating:

“We’re going to work on this issue and other issues and through that work we would expect that we’ll ensure that Canadians and Canadian businesses both large and small will pay their appropriate rate of tax.”

Morneau has already changed Canada’s position regarding corporate tax dodging. The practice of transnational corporations of transfer pricing and tax shifting – shifting profits made in higher tax countries to low tax locations – robs global governments of between $100 billion and $240 billion a year. The new government signed onto an international agreement negotiated by the OECD and the G20 called Base Erosion and Profit Shifting aimed at forcing corporations to pay taxes in the countries where the profits are actually made. Canada ranks as the third largest loser in the G20 when it comes to the amount of untaxed corporate revenue.

The government’s apparent willingness to go after tax cheats – corporate and individual – is good news. But this is just one step in terms of achieving tax justice and fairness – and in recovering the over $60 billion a year lost through tax cuts. Letting the need for a genuine national conversation about taxes slip to the back burner would be a mistake. Now that we have a government that says it believes in governing the question of comprehensive progressive tax reform needs to be front and centre.

More articles by:

MURRAY DOBBIN, now living in Powell River, BC has been a journalist, broadcaster, author and social activist for over forty years.  He can be reached at murraydobbin@shaw.ca

April 25, 2018
Stanley L. Cohen
Selective Outrage
Dan Kovalik
The Empire Turns Its Sights on Nicaragua – Again!
Joseph Essertier
The Abductees of Japan and Korea
Ramzy Baroud
The Ghost of Herut: Einstein on Israel, 70 Years Ago
W. T. Whitney
Imprisoned FARC Leader Faces Extradition: Still No Peace in Colombia
Manuel E. Yepe
Washington’s Attack on Syria Was a Mockery of the World
John White
My Silent Pain for Toronto and the World
Dean Baker
Bad Projections: the Federal Reserve, the IMF and Unemployment
David Schultz
Why Donald Trump Should Not be Allowed to Pardon Michael Cohen, His Friends, or Family Members
Mel Gurtov
Will Abe Shinzo “Make Japan Great Again”?
Binoy Kampmark
Enoch Powell: Blood Speeches and Anniversaries
Frank Scott
Weapons and Walls
April 24, 2018
Carl Boggs
Russia and the War Party
William A. Cohn
Carnage Unleashed: the Pentagon and the AUMF
Nathan Kalman-Lamb
The Racist Culture of Canadian Hockey
María Julia Bertomeu
On Angers, Disgusts and Nauseas
Nick Pemberton
How To Buy A Seat In Congress 101
Ron Jacobs
Resisting the Military-Now More Than Ever
Paul Bentley
A Velvet Revolution Turns Bloody? Ten Dead in Toronto
Sonali Kolhatkar
The Left, Syria and Fake News
Manuel E. Yepe
The Confirmation of Democracy in Cuba
Peter Montgomery
Christian Nationalism: Good for Politicians, Bad for America and the World
Ted Rall
Bad Drones
Jill Richardson
The Latest Attack on Food Stamps
Andrew Stewart
What Kind of Unionism is This?
Ellen Brown
Fox in the Hen House: Why Interest Rates Are Rising
April 23, 2018
Patrick Cockburn
In Middle East Wars It Pays to be Skeptical
Thomas Knapp
Just When You Thought “Russiagate” Couldn’t Get Any Sillier …
Gregory Barrett
The Moral Mask
Robert Hunziker
Chemical Madness!
David Swanson
Senator Tim Kaine’s Brief Run-In With the Law
Dave Lindorff
Starbucks Has a Racism Problem
Uri Avnery
The Great Day
Nyla Ali Khan
Girls Reduced to Being Repositories of Communal and Religious Identities in Kashmir
Ted Rall
Stop Letting Trump Distract You From Your Wants and Needs
Steve Klinger
The Cautionary Tale of Donald J. Trump
Kevin Zeese - Margaret Flowers
Conflict Over the Future of the Planet
Cesar Chelala
Gideon Levy: A Voice of Sanity from Israel
Weekend Edition
April 20, 2018
Friday - Sunday
Paul Street
Ruling Class Operatives Say the Darndest Things: On Devils Known and Not
Conn Hallinan
The Great Game Comes to Syria
Jeffrey St. Clair
Roaming Charges: Mother of War
Andrew Levine
“How Come?” Questions
Doug Noble
A Tale of Two Atrocities: Douma and Gaza
Kenneth Surin
The Blight of Ukania
Howard Lisnoff
How James Comey Became the Strange New Hero of the Liberals
FacebookTwitterGoogle+RedditEmail