- by David McLaren
Here's something you might want to keep in mind as you sprint to the post office with your tax return: Corporations made enough to pay off their income taxes a few months ago. You won't be working for yourself until sometime in June.
That stings, eh?
Our low corporate tax rate (now the lowest in the G7), a myriad of tax credits and write-offs (including CEO stock options), nearly
$200 billion stashed in off-shore tax havens - these are among the reasons the tax burden has shifted from corporate Canada onto you. If you're feeling a little like Atlas holding up the world, well you are.
It might not be so bad if corporations were creating good jobs. But they're not, despite the recent uptick in employment (thanks America). In fact, we're still down about a hundred thousand decent, well-paying, full-time jobs.
Most jobs are precarious – you can't get from one end of the month to the other on one of them. So people are taking two or three short-term, part-time, minimum-wage, stay-by-the-phone-in-case-we-need-you kinds of jobs. So much for a healthy life-work balance.
No wonder stress (and hospital admissions) are going up. But, if you're healthy and care about your family, what's the choice? It's either work or debt.
Actually it's both. Working Canadians owe $1.67 for every dollar they take home. That's the largest spread in the G7.
That sort of debt means people are cashing in retirement funds to buy houses or to pay off debt they've already piled up, maybe on those easy to get, easier to use in-store credit cards. If you're offered one of those, run away, quickly. Interest rates are around 25%.
But let's get back to happier thoughts: surpluses. Corporations in Canada are sitting on some $700 billion worth of them. "Dead money," Mark Carney called it, because it's not creating jobs or growth.
OK, you might say, they're waiting for better times to invest. Their boards and CEOs know what they're doing; that's why they get the big bucks, right?
When I hear that, I think of Nortel. Remember Nortel? That was the tech and innovation darling of Canada back in the 1990s. Long story short, Nortel was badly managed and driven into the ground by its head honchos who cashed in their stock options just before the company imploded.
A former Nortel executive, there when the company was riding high, was asked by a TV interviewer if he thought the current executive deserved what they were taking home. After all, they were top guys and they couldn't really be replaced, could they?
"In a heart beat" said the old man.
And that story brings to mind Bombardier, our shining star of planes, trains and streetcars. The company hasn't been doing well: too many missed deadlines, shady deals and breached contracts. So it's restructuring (that's corporate-speak for laying off workers – some 41,000 world-wide). Quebec helped them out with a billion dollars last year (for 49% control).
And Ottawa just floated them a 15-year interest-free loan for nearly $400 million. Remember, that's from money you cough up every April. Now, try asking your bank if you could run up your credit card, interest-free, for a few months.
I hear you asking, what did the execs of Bombardier do with the money? That was my question too. They gave themselves a 50% raise. The CEO's take-home pay is now over $9 million a year including $1 million in stock options. You could put one of Jim Merriam's mules in there and it would do a better job.
By the way, until very recently, the former CEO of Nortel served on the Board of Bombardier.
Now I know there are good corporations, but the bad ones are muddying the field for everyone and making off like bandits with our jobs and our money.
So here's some suggestions to ponder on your way to the post office.
Let's make it harder for corporate execs to play fast and loose with our money. If we're going to lend them tax revenues, then let's get a decent return and a voice in their boardrooms.
Tax CEOs' stock options as though they are income (because they are). And, while we're at it, close a raft of other corporate tax loopholes and credits that bleed money away from government revenues.
Repatriate the billions we're owed by corporations hiding income off-shore. The Panama Papers are a good place to start looking.
Penalize corporations and individuals who use scams to dodge taxes. Remember KPMG?
Make it easier for workers to organize so they can protect their wages and their jobs.
Let's raise the minimum wage to a living wage so people can pay their own way. Minimum wages are essentially a corporate subsidy. In fact, there are a whole lot of subsidies that private companies shouldn't be relying on.
Slap a tiny 'fin-tax' on all stock and securities trades. A tax as low as .5% would quickly wipe out the federal deficit and take our health care system off life support.
Tax the dead money corporations are sitting on. Use it or lose it.
It's only fair.
PS: Even if you don't think you made enough last year to file, do it anyway. You might get money back. For a list of free tax clinics phone 211 or go here: www.povertytaskforce.com and click on 'RESOURCES'. It's never too late to file.