Some of Canada’s biggest companies have received a pandemic grant to keep their employees on the payroll, but a new report reveals that in many cases these big companies have actually cut jobs while lining their pockets shareholders.

These findings, from a report by Canadians for Tax Fairness, should irritate Canadians and underscore the double standard, said NDP Finance Critic Daniel Blaikie. Canadian National Observer in an interview. It is “outrageous” for the federal government that the Canada Revenue Agency (CRA) is “chasing” some people who applied for and received financial assistance through emergency programs like the Canada Response Benefit. emergency (CERB) to repay the money, he added. .

Now the federal government is unwilling to grant any kind of amnesty to low-income people who have CERB debt, Blaikie said.

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“I think it’s a really big difference in how people are treated,” he said. “The richest and most fortunate are treated with kid gloves, while the most desperate and with the least repayment are treated like criminals.”

During the first year of the COVID-19 pandemic, the federal government introduced a number of support programs, some aimed at Canadians – including CERB – and others aimed at businesses, the most significant of which was the Canada Emergency Wage Subsidy (CEWS). . Last May, the CRA notified more than 250,000 Canadians that they were not eligible for the CERB or related benefits and that they had to repay the money received.

Although “wage subsidy” is in the title, the terms for businesses to receive the CEWS were broad and it was “truly a blank check for businesses,” the report said.

Of 74 public companies that avoided paying at least $100 million in taxes, half received funds from the CEWS, Canadians for Tax Fairness found. The vast majority of companies examined in the report have at least one subsidiary in a tax haven, pay dividends to shareholders and engage in share buybacks. More than half of companies reduced their total workforce in 2020 despite the federal subsidy.

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The study only looks at the largest public companies that avoid taxes, so these results may be “just the tip of the iceberg,” said report author DT Cochrane, an economist at Canadians for Tax Fairness.

“Most of our criticism is directed at the government for not having the right rules in place to ensure this is not abused and not researching how this money was actually used,” Cochrane said. Canadian National Observer. Going forward, corporate support programs like CEWS should publicly disclose the amount and duration of support, prevent recipients from paying bonuses to executives and shareholders or increasing dividends, have a way to recoup misappropriated funds and to support large companies only on a case-by-case basis. base, the report said.

Of the 37 public companies analyzed by Cochrane, 11 are involved in the oil and gas sector, including Imperial Oil, Enbridge, Suncor, TC Energy and Canadian Natural Resources Ltd.

Some of Canada’s biggest companies have received a pandemic grant to keep their employees on the payroll, but a new report reveals that in many cases these big companies have actually cut jobs while lining their pockets shareholders.

Despite a slump in sales early in the pandemic, these businesses were “extremely profitable,” Cochrane said. Suncor and Imperial Oil more than quadrupled their second-quarter net profits from 2021 to 2022, and Canadian Natural Resources Ltd. more than doubled their net profits over the same period.

“They have the ability to support their employees without accepting these government grants,” Cochrane said.

Blaikie wants the federal government to make it clear which companies received how much money so that accountability can be held.

The report recommends measures to reclaim corporate tax revenue for the common good, including a windfall tax that the NDP has long called for. The federal government has proposed a one-time tax of 15% on profits over $1 billion for big banks and insurers for fiscal year 2021, but there is no indication that a one-off tax is on the horizon in all sectors.

The 2022 Fall Economic Statement also proposed a 2% tax on corporate stock buybacks, which the federal government says would increase federal revenue by about $2.1 billion over five years to from 2023-2024.

Taxing a percentage of what companies report to shareholders is another possible solution proposed in the Canadians for Tax Fairness report. Recommendations also included increasing the corporate tax rate and closing tax loopholes.

It’s no secret that the federal government must invest in a myriad of sectors of the economy to meet Canada’s climate goals; a massive transformation of industries and energy systems is needed to reduce the pollution responsible for global warming.

A just national transition to a low-carbon economy will be “incredibly costly”, Cochrane said. “When you inject money into the economy, it inevitably ends up in company coffers for all sorts of reasons.

“We need a fairer tax system to ensure that the government can invest where it needs to invest.

Natasha Bulowski / Local Journalism Initiative / Canadian National Observer

Source: www.nationalobserver.com