“The rich get rich, and the poor get poor. That’s how it goes. Everybody knows.” Leonard Cohen sang that song 33 years ago.
Things were worse by 2012, when the former deputy editor of the Financial Times wrote a book called Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else. It discussed how our wealthy Western society was on a course towards oligarchy, away from democracy and social inclusion.
The author was our current finance minister, Chrystia Freeland. She joined the government three years later, in 2015. At that time, her party had campaigned on raising taxes on Canada’s richest 1 per cent, knowing that it was both popular and a good way to bring in tax revenues for the government services that everyone wants and needs. Their campaign got credit from many for outflanking the NDP on progressive issues.
But by 2021, it turned out that the rich still get richer, while the poor get poorer, as only the top 1 per cent increased their wealth over the last decade, as shown in a report by Canadians for Tax Fairness.
Now the wealth gap is truly gaping. The plutocrats are laughing all the way to their offshore tax havens. Digital multinationals are barely contributing to our government coffers. Our tax system is still skewed to protect the wealthy, according to most CRA auditors.
Corporate income tax rates haven’t gone up from 15 per cent since Minister Freeland’s Liberals took office six years ago. And Canadian billionaires increased their wealth by $78 billion over the first year of the pandemic, according to a CCPA-BC report released this week.
But the momentum is shifting on wealth inequality. Everybody knows it’s out of control, and most Canadians want something done about it. For instance, a strong majority of Canadians, from all political colours, including Conservatives, now support a wealth tax. And even the IMF says it’s time to tackle the tax havens.
Some governments are paying attention. The Biden administration is planning to raise their corporate tax rate from 21 per cent to 28 per cent, and pushing for a 21 per cent minimum tax on multinational companies. Other European countries like the U.K., France and Germany are on board. And a study published just this month by the Institute of Economic Studies calculated Canada would gain at least $11 billion per year from that deal.
Meanwhile, Canada hasn’t done much. To be fair, the Trudeau government brought in a top-income tax bracket while reducing tax on income below it (though that also benefited the rich while reducing revenue). And they partially closed the private corporations loophole which allowed private companies to distribute income among family members to avoid taxes. But the rest has been all talk.
They postponed closing the loophole on stock options. They said they’d explore ways to tax extreme wealth inequality, in last fall’s throne speech and in the PM’s last mandate letter to Minister Freeland. And sometimes even the talk doesn’t fly: at the Liberal convention last weekend, while backing universal basic income, the party rejected increasing capital gains taxes or bringing in an inheritance tax (Canada’s the only G7 country without one). That’s how it goes.
With taxing the super-rich so popular, the lack of cash in the rest of our pockets so clear, the current and post-pandemic need for social services so high, you’d think Minister Freeland would be preparing a pre-election budget that actually gets the money from those plutocrats she mentioned. They’ve gotten so rich, they literally couldn’t count their fortunes in a human lifetime.
And maybe that is her plan. Maybe the Liberals will present a budget inspired by their successful progressive 2015 campaign, compete with the NDP’s recent resolutions to support a wealth tax on fortunes over $20 million and increase the top-income tax rate. Maybe Minister Freeland won’t be all talk after all, and will seize this historic opportunity to present a budget that prevents the ongoing “fall of everyone else.”
On Monday, everybody will know.
Darren Shore is the communications coordinator for Canadians for Tax Fairness. He studied political science and journalism at Concordia University, has worked in fundraising and communications for a number of non-profits, and leads a double life as a tour guide in Montreal, where he lives with his partner and children.