Context

Context of Tax Reform

Who Should Join the Grassroots Coalition for Tax Reform

Principles of Fair Taxation

People Know What is Right and Wrong

Economic Discrimination Gone Wild

How Do We Fix the Tax Avoidance Problem?

How Not to Fix the Tax Avoidance Problem?

Understanding that Tax Avoidance Impacts Us Personally

Are there Existing Laws That Address Tax Avoidance?

Is there Opposition to Tax Reform?

What You Can Do?

Who Should Join the Grassroots Coalition for Tax Reform

It is in the interest of most Canadians and businesses to support and/or join the Grassroots Coalition for Tax Reform. These include:

• Businesses that wish to prosper domestically and globally.
• Canadians who seek financial health and enhanced lifestyles for themselves and their families.
• Those who want to realize economic growth in all segments of Canada.
• Those who support tax fairness, where affluent Canadians and large corporations do not escape paying taxes via tax loopholes.
• Those who want our government to recoup many billions dollars annually from those who practice tax avoidance.
• Those who want better health care, that includes Pharmacare and a national dental plan.
• Canadians who want the burden of Canada’s massive deficit to be fairly shared by all, including affluent Canadians.

The above is simple to understand … and simple to implement … providing there is a will from our federal government to prohibit the use of offshore tax havens for the sole purpose of avoiding taxes.

Pressure from a sufficient number of Canadians is what is needed to create the ‘political will’.

Principles of Fair Taxation

Many will say that corporate tax laws are complex, and beyond the understanding of ‘average’ Canadians. They are correct, absolutely. But many financial scams are complex. That does not mean we ‘average’ Canadians should lie down to be taken advantage of.

What is not complex are the principles of fair taxation, where all individuals and corporations should be taxed on income/profits, based on Revenue Canada’s published tax rates. We saw, from the Panama and Paradise Papers that many thousands of Canadians avoid paying taxes each year via their use of tax havens. They do it legally, without any repercussions.

People Know What is Right and Wrong

• It’s right that Canadians earning the same income, taking into account personal exemptions, should pay the same income tax, as per Revenue Canada’s published rates.
• It’s wrong that Canada’s tax laws allow affluent Canadians to avoid paying large amounts of taxes. 
• It’s right that all businesses pay corporate taxes on profits generated in Canada.  This is not happening
• It’s wrong that many hundreds of Canadian and multi-national corporations are allowed to pay a fraction of Revenue Canada’s published tax rates.
• It’s right that all Canadians and all business pay their fair share of income and corporate taxes.

Economic Discrimination Gone Wild?

Economic discrimination is as harmful as racial or ethnic discrimination. It puts ‘average’ Canadians in their place. It puts affluent Canadians on a pedestal. These affluent Canadians receive the financial benefits of tax avoidance … with virtually no benefit to Canadians or Canada. The growing gap between rich and poor is a direct result of Canada’s tax regulations. As Canadians dig themselves deeper and deeper into debt, as a growing number of Canadians settle for something less than they deserve and question their futures, many affluent Canadians get a free ride.

How do We Fix the Tax Avoidance Problem?

There is one, and only one way, and only one time, to fix the tax avoidance problem. Canadians vote for a political party in the next federal that commits to amend existing tax laws and to introduce new legislation that ensures that profits generated in Canada are taxed based on Canada Revenue’s published tax rates. Your vote is important. Every Canadian’s vote is important to realize meaningful tax reform.

Many, perhaps most Canadians have a party loyalty, based on personal ideology. We ask Canadians to place a higher priority on tax reform commitment over party loyalty. In the 2019 federal election, no political party included tax reform that specifically addressed ‘individual’ tax avoidance in their election platforms. There was, and still is, a strong reluctance by politicians, or candidates to discuss, or even acknowledge corporate tax avoidance. Our government was not pleased by the disclosures of the Panama and Paradise Papers that identified several thousand Canadians engaged in tax avoidance practices.

How Not to Fix the Tax Avoidance Problem?

The first reaction of many is to direct their anger at large businesses, Microsoft, Canada’s banks, Bell Media, Amazon, Apple, who benefit in the billions of dollars from tax avoidance practices. Unfortunately, this is counter-productive. These and the hundreds of companies who practice tax avoidance practices are simply using existing tax laws to legally avoid paying tax. They are doing nothing wrong. Everyone has the right to limit their taxes, providing they follow our laws. To focus on the tax avoiders is a distraction. Addressing ‘individual’, and  not corporate tax avoidance, should be the focus in an upcoming federal election.

Understanding that Tax Avoidance Impacts Us Personally

Many understand tax avoidance is an issue. We don’t understand the personal financial impact tax avoidance has on them and their family, and their future. It is significant. Many of us don’t understand the power of our vote vote in the next federal election.

Our government’s failure to legislate tax laws that restrict tax loopholes five or ten years ago has caused unnecessary hardship and suffering on the lives of millions of ‘average’ Canadians. We can do little to change the past. We can, however, ensure that this not continue in the future.

People can’t easily relate to what 5 or 8 billion dollars annually, or 25 or 40 billion dollars over five years in additional government revenues can do. We don’t have a context for billions of dollars. These additional government revenues can dramatically change the face of Canada, and the lifestyles and financial status of all Canadians.

Are there Existing Laws That Address Tax Avoidance?

Income Tax Act Subsection 245, The General Anti-Avoidance Rule (GAAR) addresses the principles of fair taxation, that transactions with the prime purpose to avoid payment of taxes is prohibited. On paper, it reads well. In practice, it has not been effective. Because of the criteria to determine whether GAAR applies, courts have consistently ruled in favour of defendants.

GAAR was created to address a serious problem. When ineffective laws exist, the onus is on the government to amend these laws so they are effective at addressing the problem. For this to happen, there needs to be the WILL by the government to do this. This is the reason the Grassroots Coalition for Tax Reform exists.

Is there Opposition to Tax Reform?

Yes, it’s true. There is opposition to tax reform. The opposition comes from powerful forces who feel entitled; those who financially benefit from tax avoidance practices, specifically large businesses such as Canada’s chartered banks, multi-national businesses, and many other organizations. In addition to tax specialists, industry associations, economics, and academics that will make a persuasive case for maintaining the suite of Canada’s tax avoidance practices, tax lobbyists that have the ear of government will be used.

Shortly after Bill Morneau, Minister of Finance introduced modest tax changes that impacted a minority of doctors, farmers, and small businesses, there was immediate opposition. Orchestrated protests took place across Canada. Credible tax specialists took to the airwaves spouting doom and gloom. Finally, the credibility of the Finance Minister was attacked in the media over “questionable” transactions that benefitted family members. A result was that the proposed tax changes were watered down. Such is the type of opposition that the Grassroots Coalition for Tax Reform can expect.

Our approach to opposition is simple. Stay focused. Stay to our plan. With possible exception, avoid confrontation.

What You Can Do?

Sign up to support, and get engaged in The Grassroots Coalition for Tax Reform.