Feds subsidizing corporate executive salaries

Parliament HillPublished: March 9th 2011
Source: Teamsters Canada
Printer friendly version
While ordinary Canadians continue to pay more and more taxes, the federal government is getting ready to bring in another corporate tax cut, from 16.5 to 15% beginning next year.

Last year Revenue Canada collected a total of $231 billion in taxes, with only one tenth of it, $25,000 million ($25 billion), coming from corporations. This makes Canada a world leader in revenue generated by individual taxpayers relative to corporations.

We’re also a world leader when it comes to corporate earning power. Over the last 12 years company executives have seen their compensation increase by an average of 444%. One well-known CEO went from $5 million in 1995 to $29 million in 2007. The average Canadian family didn’t fare quite so well. Their median earnings rose by less than 4% between 2000 and 2005.

“The federal government says its cutting corporate taxes to keep businesses competitive, but I don’t buy this argument,” says Robert Bouvier, President of Teamsters Canada. “It looks like the tax cuts are just a way to subsidize the explosion in CEO salaries.”

Bouvier pointed out that it was Canadian taxpayers who bailed many of our companies out of the 2008 economic crisis. “Canadians already pay more than our fair share of taxes,” he noted. “There’s nothing wrong with subsidizing companies when they need help. But only on the condition that they create jobs rather than adding to the already excessive pay of CEO’s. Under no circumstances should they get a reduced tax bill at the expense of ordinary Canadians.”

The government has recently taken to cautioning Canadians against taking on high debt loads, but they’re ignoring the fundamental dilemma facing us: How can Canadians reduce their debts when the tax burden keeps shifting away from corporations and onto the backs of ordinary citizens.

As a simple matter of fairness its time the federal government reconsidered its latest proposal to cut corporate taxes.

The Teamsters Union represents 125,000 members in Canada in all trades. The International Brotherhood of Teamsters, with which Teamsters Canada is affiliated, has 1.4 million members in North America.