The New Democratic party has proposed legislation to impose a 0.1% wealth tax on income exceeding $5m, a 0.02% estate tax, and a $10bn annual profit-sharing fund.
Bill Morneau, federal finance minister, already unveiled a raft of tax measures in a series of tax reforms announced last November. The proposals include a so-called “Netflix tax”, cutting the public healthcare fee, raising the number of tax brackets, and lowering the small business tax rate from 10.5% to 9%. He has estimated it would raise up to $16bn over the next five years.
The decision to tax foreign investment has been rejected as unrealistic by many on the left wing of the Liberal party.
The Liberals argue that Canada loses $24bn annually to offshore tax havens.
In response to the four-pronged policy announcement, Justin Trudeau, the Liberal prime minister, said: “Tax avoidance is not a Canadian thing or a Liberal thing or an American thing. It’s a global issue and it affects all countries.”
Media outlets in Canada have published their own revelations about companies that use tax avoidance techniques, many of which are not directly in the ambit of the Morneau tax reforms.
Canadians have been lobbying the government and have pressed the Trudeau government to issue more information on the tax havens and how they are used, so it can be implemented.
Where the proposal stands
Three of the four co-sponsors of Bill Morneau’s proposals are not Liberals. MPs who abstained or voted down a motion demanding the government release more information about offshore tax haven practices were delegates at the Liberal national convention in Ottawa in February.