Billionaires in the U.S. are making out like bandits amid the COVID-19 crisis, but what of the super-rich in Canada?
Thanks to a new report released today by TaxCOOP, a Quebec-based non-profit dedicated to promoting international tax cooperation, we now have some answers.
Canada’s five richest billionaires — David Thomson, Joseph Tsai, Galen Weston, David Cheriton and Mark Scheinberg — saw their wealth increase by 9 per cent between March 16 and May 16, 2020, an increase of $5.5 billion. In this same period, cash donations to fight COVID-19 from these five billionaires represented 0.09 per cent of their wealth.
That means Canada’s richest billionaires have donated roughly 1 per cent of the money they have made during this pandemic.
TaxCOOP also looked at donations from Google, Apple, Facebook, Amazon and Microsoft, lumping together the companies, their billionaire founders and their private charities. They found cash donations from these groups between March 16 and May 16 represented 0.09 per cent of their wealth, while their wealth increased in this period by over 7.7 per cent.
“These findings support the need for immediate action to combat income inequality,” concludes TaxCOOP in a release, including “international tax reform.”
Canadians want a wealth tax, crackdown on tax avoidance
A similar report on the state of the super-rich in the United States was released Thursday by two think tanks, based on data from Forbes’ billionaires list.
It found that the fortunes of the over 600 billionaires in the United States rose by 15 per cent in the two months since the pandemic hit North America, from March 18 to May 19. Jeff Bezos, who owns Amazon, has seen a 30 per cent increase in his fortune, while Facebook’s Mark Zuckerberg’s wealth has grown by almost 50 per cent.
This news follows on the heels of a poll released Friday by Abacus Data, which found 75 per cent of Canadians, including 69 per cent of Conservative voters, want the country to implement a wealth tax.
The same poll found over two-thirds of Canadians want the government to spend what it takes to support people through this crisis, while four out of five Canadians think companies receiving government assistance should not be allowed to use foreign tax havens to hide their profits from Canadian taxation or use government funds for excessive salaries, share buybacks or increased dividends.
While the Trudeau government has been praised for implementing income support programs like the CERB, and pressure from the NDP opposition has succeeded in pushing the government to include more Canadians in these programs than initially planned, the Liberals have a huge blind spot when it comes to taxing their friends on Bay Street.
On the same day that poll came out showing three-quarters of Canadians want a wealth tax, Finance Minister Bill Morneau ruled it out, promising no new taxes.
Morneau, incidentally, is a very rich man married to an even richer heiress. His personal fortune is estimated at over $50 million.
Trudeau plays games on tax evasion
Under pressure to bar companies registered in tax havens from federal support, Trudeau demonstrated how masterfully his team can spin the media.
With much fanfare, he announced that he was barring companies who have been convicted of tax evasion from federal support.
But the number of companies large enough to otherwise qualify for federal support that have been convicted of tax evasion and would be excluded by this provision is zero. This measure was meaningless, but it convinced many Canadians that action was being taken.
Trudeau has repeatedly refused to bar companies registered in tax havens, of which there are many, from federal support.
Federal enforcement of tax evasion is directed almost entirely at what NDP MP Peter Julian, who first exposed this sleight of hand in hearings of the Finance Committee, called “small fish” in an interview with Ricochet this weekend. This includes individuals, sole proprietorships and tiny companies.
The Panama Papers and other leaks have provided a roadmap for any government seeking to prosecute large tax evaders, but Canada has been unwilling to take action against “big fish” who illegally hide their revenue from taxation.
Add to that a 2019 report from the parliamentary budget officer that found legal tax avoidance costs Canada at least $25 billion a year, and you’d think this would be a top priority for the Trudeau government.
Instead, Trudeau is playing games in hopes of tricking Canadians into believing he has barred companies registered in tax havens from support, when he has in fact refused to do so.
Canadians want a wealth tax, and they want companies registered in tax havens barred from government support. Yet our government refuses to implement these simple measures to ensure that everyone pays their fair share of taxes.
Instead, their main concern seems to be reassuring Conservatives that they’ll go after any Canadian who applied for the CERB in error. We have endless resources to investigate and prosecute the little fish who made a mistake or was desperate, but the big fish? They can do whatever they want.
I wonder why.
Apropos of nothing, a wealth tax of 2 per cent on fortunes over $10 million would cost our finance minister close to a million dollars a year. It would cost his wife far more. Perhaps most importantly, it would cost Trudeau’s Bay Street buddies a small fortune.
Oh, and those leaks? One of them showed Morneau was a director at the Bahamas-registered subsidiary of his company, Morneau Shepell, in 2014. He didn’t do anything illegal, because our laws suck, but I think it’s fair to say he’s well versed in the ins and outs of legal tax avoidance.
Despite pressure from other countries, the Trudeau government has dragged its feet on updating our laws to crack down on the practice.
If we’re going to fund the recovery we need, it starts with a wealth tax and a massive crackdown on tax avoidance. It’s the very least our government could do.
But they aren’t doing it.