Ottawa could raise $4.4 billion by extending windfall tax: DPB

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OTTAWA — New analysis from the Parliamentary Budget Officer suggests the federal government would pocket an additional $4.4 billion in revenue if it extended Canada’s income dividend to the oil and gas sector as well as big box stores.

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The dividend is a one-off 15% tax the Liberals plan to levy on excess profits made by banks and life insurers during the pandemic.

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The Parliamentary Budget Officer had previously estimated that the dividend would bring $3 billion in revenue to banks and life insurers over the next five years.

Two New Democrat MPs have asked the Parliamentary Budget Officer to assess the financial impact of extending the temporary tax to the oil and gas sector and to big-box stores.

In his analysis, the Parliamentary Budget Officer concluded that the federal government could generate $4.4 billion in additional revenue by extending the tax to these sectors.

Environment Minister Steven Guilbeault recently lambasted oil companies for making very limited investments in climate action, even though massive inflation-linked profits allowed them to fill shareholders’ wallets.

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Shortly after those comments, the Liberals proposed a 2% tax on stock buybacks in the fall economic statement.

The tax is meant to incentivize companies to use their profits to grow their business, but New Democrats say the tax does not help Canadians who need help.

« Canadians are going through a really tough time right now…the cost of everything is going up, » said NDP Finance Critic Daniel Blaikie.

Blaikie said companies can find ways around the buy-in tax, when a windfall tax would allow less « wiggle room ».

The companies have faced public scrutiny for raking in windfall profits during record inflation. This has sparked global discussions about the appropriateness of windfall taxes.

In September, the European Union passed a windfall tax on fossil fuel companies and said it planned to use the revenue to send relief to people.