Treasury Canada says it aims to make everyone pay “their fair share of the tax” but is not committed to levying higher taxes on energy companies that report significant windfall earnings while consumers feel squeezed into gas stations.
The ministry’s announcement follows UN Secretary General António Guterres sharply criticizing global energy companies for profiting at the expense of the poor.
On WednesdayGuterres said that the world’s leading energy companies made $100 billion in the first quarter of this year and that those profits should be taxed and then used to support the most vulnerable during difficult times.
He joined other figures who have recently accused oil companies of capitalizing on global supply shortages to boost profits and defraud consumers.
“This grotesque greed is punishing the poorest and most vulnerable people while destroying our only common home, the planet,” Guterres said. “We are seeing excessive scandalous oil and gas profits at a time when we are all losing money.”
WATCH | UN Secretary General urges to tax ‘surplus profits’ of oil companies
The day after Guterres’ comments, in which he did not name a single company, Suncor Energy Inc. reported 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 last year. 2021.
When asked if Ottawa had considered raising a tax on such profits, the Treasury Department instead pointed to other tax measures taken by the federal government, including a permanent 1.5% corporate tax rate hike for profitable banks and a luxury tax. on private jets and luxury cars worth over $100,000.
“We were 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 income should go to ordinary Canadians
Daniel Blakey, a financial critic for the New Democratic Party, said the federal government has “absolutely” the right to tax “excess profits” at a time when “people are really under the gun when it comes to being able to afford” rent, food and gas. .
“We saw the Conservatives in the UK do it for Pete,” Blakey said, referring to the UK passage last month. 25% windfall tax for oil and gas producers in the North Sea..
Blakey suggested that profits could be used to increase the GST tax credit and child support in Canada.
He added that the money could also be used to increase old-age benefits for seniors aged 64-75 in 2021, which currently only apply to those over 75.
Kevin Page, a former parliamentary budget officer, agreed that taxable profits could be “aimed at strengthening our social safety net.”
In response, Page said, energy companies could argue that higher taxes are an unfair burden on an industry that is still trying to recover from a global drop in energy prices in the early stages of the pandemic.
“These are difficult trade-offs that we want our political leaders to recognize,” Page said.
Industry says Ottawa benefits from increased fees
The Canadian Association of Petroleum Producers (CAPP) declined to be interviewed, but an emailed statement said higher commodity prices are leading to higher federal royalties.
“Canada expects the annual increase in royalties levied on four oil and gas producing provinces by 283% compared to last year,” the association said in a statement, which also mentions income tax, municipal taxes, corporate tax. remittances and auctioning of mining rights as additional pools of public money coming from the oil and gas sector.
CAPP added that increased production in democratic countries such as Canada would help lower consumer spending.