The Liberal campaign promise to impose a surtax on banks and insurance companies should be expanded to include oil companies, grocery chains and big box stores, according to an NDP motion put forward for a day of Commons debate Monday ahead of the 2022 federal budget.
The Liberal Party’s 2021 election platform included a pledge to raise nearly $11-billion in tax revenue over five years through tax hikes on large banks and insurance companies. The proposal included a three percentage point corporate tax rate increase – from 15 per cent to 18 per cent – on banks and insurance companies with more than $1-billion in profits, as well as requiring these same companies to pay a Canada Recovery Dividend.
The Liberal Party document suggests the surtax would be in place as soon as Jan. 1, 2022, yet Finance Minister Chrystia Freeland’s December fiscal update did not formally adopt the platform pledge as government policy. At the time of the update, a senior government official said the tax hike promise would be addressed in the 2022 budget. As a result, the coming budget will be closely watched for details on whether the Liberals follow through.
Ms. Freeland is expected to announce a budget date in the coming days.
The House of Commons resumed sitting Monday after a two-week recess. With Canada’s inflation rate hitting a three-decade high, opposition parties of all stripes are regularly raising cost-of-living concerns on behalf of constituents. The minority Liberal government will need the support of at least one other opposition party in order to survive confidence votes on its budget measures. Last year’s Liberal budget bill was supported by both the NDP and the Bloc Québécois.
NDP Leader Jagmeet Singh said he’s worried the Liberals won’t deliver the promised tax hike, let alone expand it to other sectors as his party proposes.
“I am concerned that they’re no longer interested, and part of today’s opposition day motion is to put that on the table to say they should be implementing that tax on banks and financial institutions that have made significant profits … and they should expand that to include big box stores and oil companies,” he told reporters at a news conference. Monday’s opposition day gave the NDP an opportunity to put forward a motion of its choosing for a day of debate and a vote on Tuesday.
During the debate, Liberal MPs suggested the government does intend to bring in the promised surtax.
“Our government’s commitment to a fair tax system is ongoing,” said Liberal MP Terry Beech, who is Ms. Freeland’s parliamentary secretary. “This includes our commitment to ensuring that large profitable banks and insurers pay their fair share.”
The NDP motion said the tax should be expanded to address the rising cost of gas, groceries and housing by using the tax revenue “to help Canadians with the cost-of-living crisis.”
The motion also calls for the government to bring in a publicly accessible ownership registry, which would increase transparency regarding the individuals who own and control corporations in Canada. The government’s 2021 budget promised to implement such a registry by 2025.
Conservative MPs mocked the NDP motion, warning that higher taxes on business will ultimately mean higher prices for Canadian consumers. They said broad tax cuts are the best way to address cost of living concerns.
“Does the NDP truly believe that the big box stores will simply accept this new proposed surtax and that they won’t pass it on to consumers?” said Conservative MP Bernard Généreux. “It’s completely ridiculous. …It’s undeniable. That’s what’s going to happen. So, at the end of the day, consumers will once again be paying the price.”
The Canadian Bankers Association declined to comment on Monday’s NDP motion or on the Liberal campaign pledge. The CBA’s initial reaction to last year’s campaign pledge was muted, promising to “engage in constructive dialogue” with the government.
The Globe and Mail reported in November that senior bankers were privately outraged at being singled out as an industry.
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