(Ottawa) Big businesses paid $30 billion less in taxes last year than would be expected under current corporate tax rates, according to a new report from Canadians for Taxation. fair.
Posted at 11:32
The organization analyzed the financial statements of 123 Canadian companies valued at at least $2 billion and found that the effective tax rate paid by these companies was around 15% in 2021, which is significantly lower than the average. 26.5% of combined federal and provincial tax.
The group says that compares to an average effective tax rate of 19% between 2017 and 2019, which then represented an average $13.5 billion shortfall in tax revenue for those pre-pandemic years.
According to the report’s author, DT Cochrane, this distortion may be due to a range of reasons, ranging from tax deductions to claiming profits in low-tax states.
Canadians for Tax Fairness describes itself as a non-partisan, non-profit organization that advocates for fair and progressive tax policies.
She asks the federal Minister of Revenue, Diane Lebouthillier, to be transparent about the reason for the loss of tax revenue.
The tax returns could explain why these companies paid less tax, but Cochrane says they don’t provide enough detail to understand the discrepancy between taxes paid and taxes expected.
“We’re not saying that one company or another has done wrong,” says the author.
Cochrane says the group is ready to “sit down and discuss” with Minister Lebouthillier the report’s findings, which he says suggest some profits are reported in low-tax states “that are questionable to say the least”.
The Canadians for Tax Fairness report is based on a joint analysis conducted by the Toronto Star and Corporate Knights, published in 2017, which examined the amount of taxes paid by corporations.
The Liberals included measures to reform the tax system and close tax loopholes in the 2022 federal budget. One of the proposed measures would prevent the use of foreign corporations to avoid paying taxes in Canada.
The budget projected that this measure would increase federal revenue by $4.2 billion over the next five years.