44th Parl. 1st Sess.
March 21, 2022 11:00AM
- Mar/21/22 1:27:45 p.m.
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Madam Speaker, I would first like to thank my esteemed colleague, the hon. member for Mirabel, for sharing his time with me.
We are here to debate the motion put forward by the hon. member for Burnaby South, highlighting several wealth gap issues that have been exacerbated by current inflation. Let me remind the House that, during the last election campaign, this government promised to levy a 3% surtax on the profits of banks and insurance companies.
We agree with this measure. Let me also remind the House that, while the public finances recorded colossal deficits and the pandemic forced SMEs out of business, several sectors of the economy besides banks and insurers became richer. Today's motion seeks to leverage the huge profits that certain companies earned in spite of the crisis. Their support will essential.
We are currently experiencing a period of high inflation. In December, the consumer price index rose by 4.8% on a year-over-year basis. This major acceleration of inflation significantly affects the purchasing power of Canadians and Quebeckers. The price of groceries rose by 5.7%, and the price of housing grew by 9.3% compared with December 2020. The simple fact is that inflation is affecting almost all goods. That in turn is affecting both individuals and businesses.
The Russian invasion of Ukraine has had a significant impact on the price of energy. Even if the price of gasoline does go back down eventually, its current volatility and unpredictability are enough to worry Quebeckers. We were used to countering inflation by addressing surges in demand, but we are now also facing problems with supply, including increasing pressure on labour and energy costs.
That being said, it is important to implement measures to protect the general public, especially the most vulnerable members of our society, from price increases. Let us look specifically at who could be doing more in this situation. In the past 12 months, several financial groups have earned record profits. National Bank, Laurentian Bank, Royal Bank of Canada, Bank of Montreal, TD Bank, Scotiabank, CIBC and Mouvement Desjardins collectively earned $60.68 billion in profits. That is 39% or approximately $17 billion more than the previous year, which was also a pandemic year.
The year 2020 was a good year for some businesses, according to an analysis of the profits of the largest Canadian businesses published at the end of last year. According to Canadians for Tax Fairness, 111 publicly traded companies headquartered in Canada made profits of at least $100 million in the first nine months of the year, and 34 of them posted record profits. The top profit-maker was TC Energy, formerly TransCanada, whose Keystone project has been in the news for years. The company made $3.5 billion in profit on $9.7 billion in sales in the first three quarters, for a profit margin of 35.6%.
This stands in stark contrast to what has been happening with our SMEs. Many went into debt to get through the pandemic, wagering that the economy would eventually get back to normal. Even if the economy recovers, they will still be in debt. There is a reason the Canadian Federation of Independent Business says that one in four SMEs could close down permanently in 2022 because they went into debt during previous waves. Small business confidence in Canada and Quebec remained especially low in January because of supply issues, the health restrictions and labour shortages.
The Bloc Québécois agrees with the idea of implementing a tax on profits over $1 billion for banks and insurance companies, as well as oil companies and big box stores. The tax should be used for assistance programs, in particular for SMEs.
Such significant measures require an explanation. They are aimed at increasing the government’s revenues to help it deal with the deficit and assist struggling SMEs. These measures would directly help those who are hardest hit by inflation. I can already hear our Conservative friends say that taxing corporate profits makes it more difficult for those that keep the economy rolling to reinvest. However, they are well aware that the large profits made by these companies mean that they already have considerable reinvestment power.
In the final analysis, we would be taking 18 cents out of every dollar of the profit made by billionaire companies. They would still have a bit of a margin left.
In the case of oil companies, we need to make sure that the plan includes programs aimed at reinvesting in the urgently needed energy transition. If we collect these funds, it will have to be to better guide the investments of corporations that have a significant societal impact.
The purpose of taxes is to take a small portion of the surplus of wealth-creating businesses to correct market failures and thus redistribute wealth, while redirecting the funds with a plan and coherent vision aimed at improving Canadians’ well-being. Let us keep in mind that we are talking about 3% for businesses that make more than $1 billion in profits. We are in the middle of a climate crisis and economic tensions that often require state intervention to redistribute wealth.
In short, we support the spirit of today’s motion. The Bloc Québécois will support any measure that effectively benefits the most vulnerable. We cannot just stand idly by while workers and businesses struggle with the effects of the pandemic.
The objective of the proposed surtax is to get revenues from those who benefitted from the crisis to help those who suffered from it. That is why governments exist. We know that the extremely costly measures taken during the pandemic increased the deficit. Now it is time to take stock, and we must correct the failures of a market we know to be imperfect, especially when it is faced with the uncertainty of a pandemic.
What is our purpose as members of Parliament in these critical times if not to propose and support measures aimed at protecting the most vulnerable and promoting a vision whose only goal is the well-being of society?
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- Mar/21/22 1:36:07 p.m.
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Mr. Speaker, I thank my colleague for his question.
Equity and social justice are extremely important to the Bloc Québécois. In this particular case, we are talking about a 3% surtax, that is, from 15% to 18%, for companies that already have profits over $1 billion, so it amounts to a redistribution.
Of course, every well-intentioned parliamentarian in this place should want those profits to be shared with our most vulnerable citizens.
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- Mar/21/22 1:37:51 p.m.
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Mr. Speaker, I thank my hon. colleague for his kind words and his very pertinent question.
Indeed, the prosperity gap has only increased over the last few decades, as economists like Thomas Piketty have pointed out. These prosperity gaps are getting wider and wider. The majority of the population is feeling a growing sense of injustice, which is not being addressed. That is why a fair tax system is needed. I absolutely agree with the NDP on this.
I do want to stress, however, that taxation can also be a question of incentives, and we have to be careful when taxing certain companies that these incentives do not push companies to engage in tax avoidance, which is unfortunately legal, to divest or to simply leave the country.
How taxes are collected remains important. However, in this case, as my hon. colleague from Mirabel pointed out, this tax will not be passed on to consumers. It will only redistribute wealth.
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- Mar/21/22 1:39:50 p.m.
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Mr. Speaker, I thank my colleague for the question. This gives me the chance to say a bit more about the issues of economic development and the redistribution of wealth.
In this time of climate crisis and economic tensions, that money must first be used for an energy transition. Then it must be used to help businesses that create a tremendous amount of value but that are vulnerable during this pandemic period. There are major supply problems, including with respect to the labour shortage and the supply chain, and we must absolutely help wealth‑creating businesses that do not have the luxury of making more than $1 billion in profits. We must also help with the energy transition by redirecting investments in oil companies, in particular, to a meaningful investment that is good for society in general.
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- Mar/21/22 4:04:41 p.m.
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Madam Speaker, it has been scientifically proven that prosperity gaps have been increasing steadily over the past few decades. Many economists concur.
Does my hon. colleague not think the government should do more to go after wealthy companies and make them pay more, in order to help the most vulnerable? Does she agree that this motion makes sense and is entirely valid?
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- Mar/21/22 4:37:17 p.m.
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Madam Speaker, I want to thank my hon. colleague for her very refreshing speech. It is good to hear people propose progressive, tangible ideas.
The Liberal Party had already promised a 3% surtax during the election campaign. The NDP's motion today expands the application of that surtax to oil companies and big box stores. Could my colleague explain this decision to expand the surtax to those two sectors?
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- Mar/21/22 6:19:15 p.m.
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Mr. Speaker, the NDP's motion is slightly different from the Liberal government's election promise made during the last campaign. The motion adds oil companies and big box stores to the list.
Can the member explain why the Liberal government does not support this motion? Is it because they want to protect oil companies?
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