Canada’s Treasury Department says it aims to make everyone pay “their share of the tax”, but is not committing to an increased tax on energy companies that report significant windfall gains while consumers feel trapped at gas pumps.
The ministry’s statement comes on the heels of United Nations Secretary-General Antonio Guterres, who has sharply criticized the world’s energy companies for making profits at the expense of the poor.
On WednesdayGuterres said the world’s largest 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 hard 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,” Guterres said. “We are seeing outrageous profits from the oil and gas industry at a time when we are all losing money.”
VIEW | UN chief urges tax on ‘excessive profits’ of oil companies
The day after Guterres’ comments — in which he didn’t name any companies — Suncor Energy Inc. a profit of $3.99 billion in the second quarter of 2022, more than four and a half times the $868 million it earned in the same period of 2021.
When asked whether Ottawa has considered raising taxes on such profits, the Treasury Department instead pointed to other federal government tax measures, including permanently raising the corporate tax rate by 1.5% on profitable banks and introducing a luxury tax on private jets and luxury cars worth more than $100,000.
“We are and remain committed to ensuring that everyone pays their fair share of taxes,” the ministry said in an emailed statement on Friday.
NDP says extra revenue should go to ordinary Canadians
Daniel Blaikie, the New Democratic Party’s financial critic, said there is “definitely” a place for the federal government to tax “excess profit” at a time when “people are really under the thumb when it comes to being able to afford” rent, food and natural gas.
“We’ve seen Conservatives in the UK do this, in Pete’s best interests,” Blaikie said, referring to the UK’s approval last month of a 25 percent windfall tax on North Sea oil and gas producers.
Blaikie suggested that profits could be diverted to increase the GST tax credit and Canadian child support.
The money could also be used to extend a 2021 increase to old age protection payouts for seniors aged 64-75, which currently only applies to those over 75, he added.
Kevin Page, a former parliamentary budget official, agreed that taxed profits could be ‘put to work to strengthen our social safety net’.
In response, energy companies could argue that increased taxes are an unfair burden on an industry still trying to recover from the global energy price crash during the early stages of the pandemic, Page said.
“Those are the tough trade-offs that our political leaders have to turn their heads around,” Page said.
Industry says Ottawa benefits from increased royalties
The Canadian Association of Petroleum Producers (CAPP) declined to interview but said in an emailed statement that higher raw material prices translate into an increase in royalties collected by provinces.
“Canada will see 283 percent year-over-year growth in royalties collected from the four producing oil and gas provinces,” the association said in its statement, which also mentioned income taxes, council taxes, corporate taxes. remittances and the auctioning of mineral rights as additional pools of public money flowing from the oil and gas sector.
Increasing production from democratic countries like Canada would help lower consumer costs, CAPP added.