Canada's Corporate Welfare Bums Sitting On $575 BILLION Hoard Thanks To Harper Conservatives Tax Cuts ....
While most individual Canadians don't earn enough to pay off their taxes until sometime in late June, the labour group says the country's businesses will have reaped sufficient revenue to pay their year's share by Jan. 30.
The calculation is for 2011, but the CLC says that was two days earlier than in 2010 when it came on Feb. 1, and notes that it was not long ago when so-called "corporate tax freedom day" came much later in February.
It was likely even earlier in 2012 and will be again this year, since in 2011 Ottawa had not as yet reduced the federal corporate tax rate to 15 per cent. That was accomplished in January 2012.
Cash hoardingThe new report, released Tuesday, attempts to make the case that Canadian firms have benefited greatly from years of Conservative and Liberal government tax policies, which have cut business levies more aggressively than personal taxes.
But in response to a question in the House, Finance Minister Jim Flaherty accused the CLC of supporting higher taxes for firms and failing to acknowledge the country's record in creating jobs since the recession. He added that business investment had increased by 6.2 per cent since the 2008-09 slump.
"Our Conservative government is focused on leaving more money in the hands of investors, entrepreneurs and ultimately, growing the work force," he said.
In the new analysis, the labour group says business taxes represent only 8.3 per cent of the federal and provincial revenue in 2011, down from 8.8 per cent in 2010 and around 11 per cent in the 1960s and 1970s.
It attributes most of the change to a steady reduction in the federal corporate tax rate, from 28 per cent in 2000 to 15 per cent today. Provincial rates have also declined, but not as dramatically.
But while the rationale for reducing corporate taxes is to encourage investment and job creation, the CLC says most of the money has gone to fatten corporate bank accounts and to pay the high salaries of executives.
Quoting Statistics Canada data, the labour group notes that cash reserves held by private non-financial corporations in Canada ballooned to $575 billion in the last quarter of 2011 from $187 billion in the first quarter of 2001 — despite three of those years being deep in recessions.
Between 2010 and 2011, corporate cash reserves grew an extra $72 billion, while the federal government was reporting a $33 billion deficit.