On the topic of welfare, here are some numbers. Corporate profits in Canada averaged $34.7-billion a year from 1988 until 2019, reaching an all-time, historic high of $97.5-billion in the second quarter of 2017. We saw $85.1-billion in corporate profits in Canada in the first quarter of 2019 (Trading Economics). These unprecedented corporate profit levels are helped along by the federal and provincial governments providing $29 billion a year in business subsidies, tax breaks, incentive programs for corporations (School of Public Policy Publications). A further $3-billion in corporate profits are held in offshore tax havens.
According to the 2016 Census, the total number of working-age men employed full-time decreased from 63.3 percent to 56.2 percent over the last decade; the full-time, year-round employment rate for women was 43.7 percent (Statistics Canada 2008-2018). Overall, by 2015, less than half of all Canadian workers between the ages of 25 through 54 worked all year round in a full-time job. 1 in 7 (or 4.9 million) people in Canada live in poverty. Precarious employment has increased by nearly 50% over the past two decades.
Yet, by contrast, average, working Canadians in 2015-16 paid $145 billion in income tax, while corporations paid $104 less annually contributing only $41 billion in taxes (Statistics Canada Census). Today, the average wage of a top 100 Canadian CEO is $10.4-million and the average Canadian worker’s salary is $26.83/hour or $55,806.40 a year.
Tell me how corporate welfare in the form of tax breaks, tax avoidance loopholes and subsidies either create stable, quality employment for Canadians or contribute fairly and equitably to quality of life?
That’s a really good question, Calvin. We were just talking about that here. What’s fascinating when you look at the data is the Canadian economy is quite strong based on some measures, corporate profits are definitely at all-time highs in Canada. However, Canada has had to increase corporate subsidies in response to the U.S. Tax Cuts and Jobs Act of 2017 signed into law by President Trump. This gave U.S. S corporations (LLCs, partnerships) an estimated $1,125 billion in net benefits over 10 years and corporations were set to get $320 billion in benefits. The move meant the U.S. added $2.3-trillion to their national debt over 10 years. The Cdn. response was to add to our overall corporate subsidies to stay competitive, which lends new truth to the saying, “when the U.S. sneezes, Canada catches a cold.”
The other big upshot is that we as working Canadians give way, way more to the public coffers than do corporations. We have a right to demand our money’s worth in terms of healthcare, education, social services, help for our children, mental health services, infrastructure. These figures also bust another myth which is that tax breaks = good jobs. Corporations do not actually create quality, stable employment in the face of these tax breaks. In fact, in the U.S. example, the breaks resulted in stock buy-backs vs. new employment or increased wages for workers.
There are significant benefits to businesses based in Canada, a stable economy, public safety, an educated population, universal healthcare and (relative) political stability. That should be worth something to businesses, without us feeling we have to give away the farm to corporations.