Canada needs a wealth tax

After the City of Edmonton and its taxpayers gave him hundreds of millions of dollars to build a new arena, you might think Daryl Katz would show a bit of gratitude. Instead, the billionaire owner of the Edmonton Oilers is apparently trying to get out of a $5-million donation his Katz Group promised to Boyle Street Community Services, a social agency located next to the arena serving the city’s homeless population that’s been fundraising for a new home. Why? Because it “didn’t try hard enough to fundraise on its own.”

I could write an entire column about Katz and how his behaviour is emblematic of Canada’s billionaire class. Instead, I’m proposing a solution to this kind of selfishness. No, I’m not going to suggest we eat the rich. But after more than two years of most Canadians falling behind while the uber-wealthy race even further ahead, it’s time for the federal Liberals to put them back on the menu. It’s time for a federal wealth tax.

As the Canadian Centre for Policy Alternatives (CCPA) noted in a recent report, the 100 best-paid CEOs in Canada made 246 times what the typical employee took home in 2022, breaking the record that was just set the previous year. "The 100 CEOs, who are overwhelmingly male, got paid an average of $14.9 million in 2022,” said senior economist David Macdonald. “This amount surpasses their previously record-breaking pay of $14.3 million in 2021 and sets a new all-time high in our data series.”

Even at the best of times, this increasingly obscene misallocation of corporate resources would be worthy of our collective attention. But when most working- and middle-class Canadians are falling behind economically, whether due to rising housing costs or broader inflationary pressures, this ever-widening gap between the ultra-rich and the rest of us begs for intervention.

That’s especially true when the government of the day is busy drowning in its own unpopularity and in desperate need of a lifeline. When Canadians were polled on the prospect of a wealth tax on the one per cent back in 2021, it garnered almost 90 per cent support nationwide, including 82 per cent from Conservative voters. If the Trudeau Liberals paired a wealth tax with a pledge to dedicate the proceeds to health care and housing, it’s hard to imagine how it wouldn’t improve their increasingly dismal prospects.

The amount of money we’re talking about here isn’t inconsequential. The CCPA’s Alex Hemingway modelled a wealth tax that includes three brackets, beginning at one per cent above $10 million, rising to two per cent above $50 million, and topping out at three per cent above $100 million. This would impact fewer than 100,000 families nationwide and would raise more than $32 billion in the first year. Within a decade, it would hit $51 billion, for a cumulative total of $409 billion over the 10 years. That’s real money that could help solve real problems for a really large number of Canadians.

As to concerns about capital flight, Hemingway suggested a Canadian wealth tax could be paired with an exit tax for anyone trying to flee its provisions (say, something on the order of the 40 per cent on expatriation that was proposed by Bernie Sanders and Elizabeth Warren in their own 2021 proposal) “in recognition of the contribution of Canadian society to creating huge fortunes.”

Yes, groups like the Canadian Taxpayers Federation and the Fraser Institute would howl about creeping socialism and the impact this could have on the motivation and ambition of Canada’s wealthiest landowners, corporate executives and other holders of capital. And sure, federal Conservative politicians would complain about the divisive nature of the Trudeau government. Let them show their respective hands here. Let them stand with the tiny community of plutocrats and billionaires and explain why Canadians shouldn’t have access to things like better health care or more affordable housing.

If the Liberals and the New Democrats want to take the fight to Pierre Poilievre, and they should, this would be a good way to do it. They can put his man-of-the-people routine to the test and see if it actually holds up under some pressure and scrutiny. Will he side with the working-class voters he’s so clearly trying to attract, or will he instinctively oppose a tax that only impacts the tiniest slice of the most privileged people in Canada? A wealth tax could be that rarest of birds in Ottawa: good politics in the service of good policy. It’s time to finally let it take flight.