While the COVID-19 pandemic meant layoffs or cut hours for workers, Canada’s wealthiest CEOs posted their second-best year in compensation, according to a new report from the Canadian Center for Policy Alternatives (CCPA).
Canada’s 100 highest-paid CEOs saw their salary increase by an average of $ 95,000 in 2020 compared to 2019, according to the report.
Average CEO earnings for 2020 were $ 10.9 million, with the highest average of $ 11.8 million recorded in 2018.
The report says that by noon on January 4, the first official business day of 2022, the average CEO would have already earned more than the average worker earns in a year.
“The gap between what CEOs earn and average workers is much larger than it has been historically,” said David Macdonald, senior economist at CCPA and author of the report, adding that the findings show that “when companies o the economy does it wrong, the CEOs don’t, they are isolated. “
The effects of this inequality are visible in our communities, said NDP finance critic Daniel Blaikie.
“What today’s report tells us is that the people at the top can maintain their income, in fact their income is growing by massive amounts while so many other people are struggling,” said Blaikie.
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“We are not going to be able to correct that problem – which is an income distribution problem – and all the problems it creates, like more people living on the streets … without seriously thinking about how we will tax some of that wealth on top.”
While some critics of estate taxes, including research Fraser InstituteThey say the measures reduce long-term growth, discourage savings and investment, and are costly to administer and collect, Blaikie calls those “defeatist concerns.”
“What are we supposed to do, just live in bondage and send them our paychecks?” I ask. “There has to be a way to make sure that you don’t end up with a very small portion of the population with most of the power and wealth … These are really big issues that I think go way beyond the tax issues. They are also questions of power and democracy ”.
A new report from @DavidMacCdn on @ccpa found that Canada’s wealthiest CEOs posted their second-best year in compensation in 2020, pointing to growing inequality in Canada. #cdnpoli #wealthtax
To combat inequality, he says we need a government that is dedicated to figuring out how to get people to pay their fair share, and “the important thing is that we start testing these things.”
In the 2021 election, a one percent estate tax of more than $ 10 million was a key element of the NDP platform, and previously, NDP leader Jagmeet Singh made an opposition day motion. to implement a one percent estate tax of more than $ 20 million.
Macdonald’s report found that 30 of the top 100 highest-paid CEOs led companies that received Canada’s Emergency Wage Subsidy (CEWS), one of whom is Canada’s highest-earning CEO David Klein of the Canadian company. cannabis Canopy Growth.
Klein made just over $ 45 million in 2020 and second place with nearly $ 27 million in compensation was José Cil, CEO of Restaurant Brands International, owner of Tim Hortons, Burger King, Popeyes and Firehouse Subs.
The report says that in addition to those 30 CEOs whose companies received CEWS directly or indirectly, 14 had modified the bonuses and five had modified the bonuses and received the subsidy.
“So you have sort of half of the highest paid CEOs who are there because they changed their salary or because the feds were supporting them, and that, I think, is quite revealing,” Macdonald said.
He says that because more than 80 percent of CEO pay comes from bonuses, theoretically if a company does very well, then CEOs do very well, and if a company does poorly, the CEO bonus will reflect this.
But the report reveals that this is not the case, with many well-paid CEOs maintaining huge profits while simultaneously receiving government subsidies.
The Macdonald’s report makes five recommendations, including the introduction of a wealth tax and the implementation of higher upper marginal tax brackets. It also calls for removing the loophole for the capital gains inclusion rate and the stock option deduction for large companies.
Blaikie says we must act quickly to curb growing inequality.
“It’s a trend that seems to be accelerating because the more wealth this small number of people at the top have, the more power that comes with it and the greater their ability to try to enforce the systems that direct wealth to themselves rather than to themselves. fair way. everyone, ”he said.
“This is why we continue to push and continue to talk about the various ways the government could not only raise more revenue for itself and the programs we all depend on, but also to have a fairer distribution of wealth.”
If a wealth tax were introduced, Blaikie says taxpayers would still be extremely wealthy compared to most Canadians and “it’s not like someone asked them to go live on the streets themselves or something, We are just asking that they recognize everyone of the public investment that they benefit from as part of how they make money. “
Finance Minister Chrystia Freeland is now tasked with setting a minimum 15 percent tax rule for top earners, which would include an attempt to prevent wealthier Canadians from reducing their tax burden through various loopholes in tax planning.
They also told him to invest in the Canada Revenue Agency to combat tax avoidance and increase corporate income tax for banks and insurance companies that earn more than $ 1 billion.
The Liberals raised the tax rate from 29% to 33% for people who earn more than $ 200,000 in their first year in office. Due to inflation, the top tax bracket now starts at $ 216,511.
The real value of reports like this are the questions they raise, said DT Cochrane, a policy researcher for Canadians for Tax Fairness (C4TF), a nonprofit, nonpartisan organization that advocates for fair and progressive tax policies.
“Why do these almost overwhelmingly white men earn these obscene salaries? … Does anyone really deserve $ 11 million a year? Did they really do anything to make an extra $ 95,000 a year? Cochrane asked.
“You don’t have to think about it for long for the answer to be an obvious ‘no’.”
– With files from The Canadian Press
Natasha Bulowski / Local Journalism Initiative / Canada National Observer
Reference-www.nationalobserver.com