Fall Economic Statement | Ottawa would tax share buybacks

(OTTAWA) A senior federal government official has revealed that Finance Minister Chrystia Freeland will propose in her economic statement on Thursday to tax corporate stock buybacks, in a bid to encourage corporations to invest in their activities and their workers in the country.

The source spoke to The Canadian Press on condition of anonymity as she was not authorized to publicly discuss the contents of the government’s financial update.

The federal government’s fall economic statement, released Thursday, is also expected to include Canada’s response to President Joe Biden’s Cut Inflation Act, which also included a 1% federal tax on buyouts. company shares.

Federal Environment Minister Steven Guilbeault lambasted oil companies last week for their very limited investments in climate action, while massive profits attributed to inflation allowed them to garnish the wallets of shareholders.

The oil giant Cenovus announced Wednesday profits of 1.6 billion in the third quarter, an increase of 192% compared to the same quarter a year ago. Cenovus also paid out $659 million to shareholders during the quarter through share buybacks.

During a speech in Windsor, Ont., last month, Mr.^me Freeland said this fall’s economic statement will focus on the economic opportunities Canada is trying to seize for the future – an economy heavily focused on “clean energy”, electric vehicles, battery manufacturing and critical minerals.

Minister Freeland has already indicated that she will also focus on fiscal discipline, while the Bank of Canada raises interest rates to bring down inflation. She warned, however, that the government would not be able to compensate all Canadians for the rising cost of living.

Opposition expectations

While Minister Freeland will release the fall economic statement on Thursday, which will paint a portrait of federal public finances and the Canadian economy, the opposition parties in the Commons have expressed their expectations.

In a letter to Minister Freeland on Sunday, Conservative Leader Pierre Poilievre urged the government not to impose new taxes and announce new spending unless it makes further budget cuts .

New Democratic Party Leader Jagmeet Singh has written to Prime Minister Justin Trudeau, urging him to tackle “corporate greed” and immediately reform the EI program.

The Bloc Québécois is also calling for a reform of employment insurance, to make the system more accessible. In addition, the Bloc members are asking the Liberal government for “increased, predictable and unconditional funding” of the health system, and a 10% increase in the Old Age Security pension from age 65 – and no longer 75, like Ottawa decreed it in July.

The Bloc is also asking the government “for a more rational use of federal resources”, by renouncing expenditures such as interference in areas of provincial jurisdiction and subsidies to oil companies, indicates finance critic Gabriel Ste- Mary, in a press release.