The Canadian Council of Chief Executives released a report Monday trying to make the case that Corporate Canada pays more than its fair share in taxes.
The problem is when you read beyond the headline, you realize the report from the lobby group representing Canada's biggest corporations has more holes in it than the corporate tax code. And it exposes a transparent -- and clumsy -- attempt to distract attention from the decline in corporate tax paid as a share of profits.
The report makes the staggering claim that the 63 corporations who participated in the voluntary survey paid an average Total Tax Rate of 33.4% towards a Total Tax Contribution of $40.6 billion. Yet only $6 billion of this figure comes from federal corporate income tax (taxes on profits). A big chunk of the rest comes from tacking on every conceivable payment to government and calling it a "tax."
Here are some ways the CEOs report pads the numbers:
- $14 billion refers to what they call "people taxes." This includes Employment Insurance and Canada Pension Plan payments. But these aren't actually paid by business, but are collected on behalf of the government. They're paid by employees but deducted from payroll by employers. The report includes a clear disclaimer, but proceeds to ignore it. These should not have been included at all, and calling this a "tax" is inaccurate at best.
$5.7 billion refers to "other payments to government." This figure includes "royalties paid to the government on conventional oil and natural gas production" and "application fees and rents/leases paid for the use of crown land and other," or "environmental permits." In other words, the CEOs are calling the payment of resource royalties and stumpage fees, as well as costs associated with enviornmental standards, is an add-on "tax." This ignores that it's entirely legitimate for the crown to charge companies for access to publicly owned resources. If resources were privately owned, a resource company would have to pay the private owners for use of the resources.
- $2.7 billion is attributed to "property taxes." Setting aside the fact that office towers benefit in many ways from municipal services and infrastructure that don't exactly pay for themselves, the report fails to point out that businesses can deduct property taxes.
Interestingly, many of the companies listed as participants in the report have an abysmal record at paying their fair share. A recent investigative report by Canadian Business magazine found that many corporations are aggressive tax planners and pay an effective (real) tax rate far below the statutory (how much they're supposed to pay) corporate tax rate.
Canadian Pacific, for example, paid an effective tax rate of 1.8%, Canadian Natural Resources Ltd. paid 13.58% and Enbridge paid 14.24%. Each of these companies are listed in the Chief Executives' report.
On the whole, corporations are paying less tax on their profits than ever. This chart, from a recent study by the Canadian Labour Congress, shows the rapid decline:
On the flip side, corporations have taken their corporate tax cut and hoarded the cash instead of investing in job creation. Corporate Canada is now sitting on a pile of "dead money" that is now larger ($626 billion) than the size of the national debt.
Photo: torontohistory. Used under a Creative Commons BY 2.0 licence.
Well, this is embarrassing for Employment Minister Jason Kenney: actual McJobs at McDonald's are being filled by temporary foreign workers under a federal program that he pitches as necessary to address a skills shortage in Canada.
The latest news, courtesy of CBC, show a McDonald's franchisee successfully applied for temporary foreign worker permits at a location in British Columbia -- and Kenney's department suspended all pending permits for three outlets owned by the same franchisee after the news outlet pressed the government about why migrant workers were displacing Canadians eager to work at the fast-food chain.
As a result of CBC's inquiries, Kenney's department has also blacklisted his franchise from using the TFW program, "pending the outcome of the probe," CBC reported.
Kenney's office is trying to look tough on this file. Too bad the Harper government has facilitated the growth -- and abuse -- of the program since coming to power in 2006, and allowed sales and service McJobs, at McDonald's and elsewhere, to drive the growth.
Check how many tens of thousands of temporary foreign workers have flooded Canada to fill McJobs:
Source: Canadian Labour Congress. How the Conservatives Expanded the Temporary Worker Pipeline by Tony Biddle, www.perfectworlddesign.ca, 2013.
The CLC has also crunched the numbers for the first half of 2013, and has found that jobs in accommodation/food services account for about 20% of temporary foreign worker positions. If retail and other service jobs are included, low-wage service jobs made up about a third of all positions.
So much for the tough talk. How about explaining why McJobs are being outsourced to temporary foreign workers in the first place?
Ever since the 2011 federal election, the Conservative Party has not been able to crack the case of fraudulent robocalls.
The calls were orchestrated by party operative(s) likely using the internal party database to send non-conservative voters in Guelph to the wrong polling stations on election day.
On Friday, Canadians were reminded that Elections Canada's voter suppression investigation into this affair is still chugging along, stymied by a weak election law that prevents its investigators to compel testimony. (The Tories aren't proposing to change this aspect of the law.)
That brings us to the Conservative government's Unfair Elections Act, currently being debated in Parliament and being defended by Minister for Democratic Reform Pierre Poilievre against widespread criticism.
If you get past all the ways the Unfair Elections Act would disenfranchise people, muzzle Elections Canada, and create a giant loophole in campaign spending caps, you'll see buried in the bill a mechanism to help the Conservative Party build its internal database of voters — and to make it hard for Elections Canada to crack down on any fraudulent calls using party databases.
How? "Bingo cards," for one thing.
Under Canada's current election law, bingo cards are produced by Elections Canada during advanced polling days and updated on election day. They are shared with political parties for limited use on election day to get out the vote (parties cross-reference people on the list with people they've identified as supporters, to pull the vote of supporters who haven't voted yet.)
The Conservatives now want to expand the use of these bingo cards so parties can track the voting patterns of every single Canadian. That means Elections Canada would be required to send these cards to each party's central machine to be incorporated into party databases.
Chief Electoral Officer Marc Mayrand, in his testimony before a House of Commons committee studying the bill, explained why it's a bad idea for parties to "be able to methodically collect and document for all Canadians, after the vote, who has vote and who has not voted.
"Collecting fundamental personal information in this way about whether or not people have voted goes beyond the operational purpose related to voting on polling day. Information on who has voted should not be shared with parties further than it already is," Mayrand's submission stated.
Speaking of databases, you've probably heard of the Conservatives' database of voters.
It's the one that seems to have been used by the mysterious Pierre Poutine in 2011 in Guelph.
If the legislation passes, that database will get even bigger to include information about every Canadian and whether they've voted or not.
Coincidentally, the Unfair Elections Acts would allow the Conservative Party to reach out to past donors listed on their bolstered database during a campaign, and not include the cost as a campaign expense.
Did we mention the new robocall registry that parties will have to establish if the bill passes stipulates that they won't be required to keep records of what numbers were called — "which is key information for investigations," according to Elections Canada.
Photo: peterblanchard. Used under a Creative Commons BY-SA 2.0 licence.
All the experts agree: if you eliminate the practice of vouching, hundreds of thousands of people will be disenfranchised.
But not just anybody. It will disproportionately affect low-income Canadians, students and aboriginals. On Thursday, parliamentarians heard directly from First Nations leaders about why the voter suppression provisions in the Unfair Elections Act will disenfranchise aboriginal voters.
Their testimony at a House of Commons committee studying the bill was bolstered by Sheila Fraser, Canada's former Auditor General, who joined a string of former and current senior bureaucrats to criticize the bill as an attack on democracy.
But all of this was overshadowed by the performance at the parliamentary committee of Conservative MP Blake Richards. The Alberta MP took great pains to explain to two aboriginal women leaders how easy it is for people to get a proper piece of identification to vote, so the government is right to ban vouching and focus on educating people about where and how to vote.
Watch Richards get schooled about his privilege by Teresa Edwards, legal counsel at the Native Women's Association of Canada, and Gladys Christiansen, director of human resources at the Lac La Ronge Indian Band.