Canada’s Department of Finance has said it aims to get everyone to pay “their fair share of tax” but is not committing to raising the tax on energy companies that report windfall gains when consumers feel stuck at the gas pump.
The ministry’s statement follows that of United Nations Secretary-General Antonio Guterres, who strongly criticized global energy companies for making profits at the expense of the poor.
WednesdayGuterres said the world’s biggest energy companies made $100 billion in the first quarter of this year and those profits should be taxed and then used to support the most vulnerable people in difficult times.
He joined other figures who have recently accused oil companies of capitalizing on a global supply shortage to fatten profits and gouge consumers.
“This grotesque greed punishes the poorest and most vulnerable people, while destroying our only common home, the planet,” said António Guterres. “We are witnessing outrageous oil and gas industry profiteering at a time when we are all losing money.”
WATCH | UN chief calls for taxing oil companies’ ‘excessive profits’
The day after Guterres’ comments — in which he singled out no company — Suncor Energy Inc. reported second-quarter 2022 profit of $3.99 billion, more than four and a half times the $868 million it reported. he won during the same period of 2021.
When asked if Ottawa had considered raising taxes on these profits, the Department of Finance instead pointed to other tax measures taken by the federal government, including the permanent increase in the corporate tax rate. 1.5% on profitable banks and the introduction of a tax on luxury. on private jets and luxury cars worth over $100,000.
“We have been and remain committed to ensuring that everyone pays their fair share of tax,” the ministry said in an emailed statement on Friday.
NDP says extra revenue should go to ordinary Canadians
Daniel Blaikie, New Democratic Party finance critic, said there was “absolutely” a place for the federal government to tax “excess profits” at a time when “people are really under pressure when ‘it’s about being able to pay’ rent, food and gas.
“We’ve seen Tories in the UK do this, for Pete’s sake,” Blaikie said, referring to the UK passage last month of an exceptional tax of 25% on oil and gas producers in the North Sea.
Blaikie suggested the profits could be diverted to increase the GST tax credit and the Canada Child Benefit.
The money could also be used to extend a 2021 increase in Old Age Security payments for people aged 64 to 75, which currently only applies to people over 75, it said. -he adds.
Kevin Page, a former Parliamentary Budget Officer, agreed that taxed profits could be “used to strengthen our social safety net”.
In response, energy companies could argue that high taxes are an unfair burden on an industry still trying to recover from the global drop in energy prices at the start of the pandemic, Page said.
“These are the hard trade-offs that we want our political leaders to understand,” Page said.
Industry says Ottawa benefits from higher royalties
The Canadian Association of Petroleum Producers (CAPP) declined an interview, but said in an emailed statement that rising commodity prices mean higher federal royalties.
“Canada is expected to see a 283% year-over-year growth in royalties collected from the four oil and gas producing provinces,” the association said in its statement, in which it also cited taxes. on income, municipal taxes, corporation tax. remittances and the auctioning of mineral rights as additional pools of public funds from the oil and gas sector.
Increased production from democratic countries like Canada would help lower consumer costs, CAPP added.