One of the reasons many Canadians voted Liberal in the November 2015 federal election was Justin Trudeau’s promise to support “middle class” people by reversing some of the tricks that allow the wealthy to pile up ever larger riches. A prime example was the loophole that gives executives, who take much of their pay compensation in the form of stocks, a tax deduction of 50 percent of the gain when they sell those stocks.
The Liberals promised to cap this deduction at $50,000, pointing out that 8,000 people were claiming an average of $400,000 a year via the loophole. That’s a total of $3.2 billion annually. But less than two years later, pressure from wealthy executives led the Trudeau government to renege on this promise. Why? According to Finance Minister Bill Morneau, because “small firms and innovators” would be hurt by closing the loophole. But let’s be clear: we’re mostly talking about the top 100 CE0s in Canada, who took in an average of $9.5 million dollars in 2015, 193 times what the average person is paid. One of the business leaders who lobbied the Trudeau government was former Liberal MP and finance minister John Manley, who heads up the Business Council of Canada.
Canadians for Tax Fairness is calling out the PM over the government’s backtracking. They point out that the issue raises concerns in light of the cash-for-access scandal, in which wealthy donors get private dinners to lobby Liberal cabinet ministers.
Of course, the Liberals first denied the accusations, claiming that lobbying does not take place at these dinners. Now PM Trudeau admits that he is lobbied at pay-to-attend events, but this doesn’t affect his decisions. We’re sure that corporate big shots will give up their efforts to influence the federal government – when pigs learn to fly.