After UN chief calls ‘scandalous’ profits, Ottawa offers no plan to raise taxes on oil and gas industry

Written by Javed Iqbal

Canada’s Treasury says it aims to get everyone to pay “their fair share of taxes,” but won’t commit to an increased tax on energy companies that report significant windfalls while consumers feel squeezed at the gas pumps.

The ministry’s statement comes on the heels of UN Secretary-General Antonio Guterres sharply criticizing the world’s energy companies for making money at the expense of the poor.

On WednesdayGuterres said the world’s leading energy companies earned $100 billion in the first quarter of this year and that those profits should be taxed and then used to support the most vulnerable people through difficult times.

He joined other figures who have recently accused oil companies of exploiting a global supply shortage to fatten profits and undercut consumers.

People attend the Global Energy Show trade show in Calgary, Alta., Tuesday, June 7, 2022. (The Canadian Press)

“This grotesque greed punishes the poorest and most vulnerable people while destroying our only common home, the planet,” Guterres said. “We are seeing excessive outrageous profits from the oil and gas industry at a time when we are all losing money.”

SEE | UN chief urges tax on oil companies’ ‘excessive profits’

UN chief urges tax on oil companies’ ‘excessive profits’

Governments should tax the ‘grotesque greed’ of the world’s oil and gas companies and use the money to help vulnerable people through this difficult time, UN Secretary-General Antonio Guterres said.

The day after Guterres’ comments — in which he did not name any company — Suncor Energy Inc. reported earnings of $3.99 billion in the second quarter of 2022, more than four and a half times the $868 million it earned in the same period. 2021.

Asked if Ottawa has considered a higher tax on such profits, the Treasury instead pointed to other tax measures taken by the federal government, including permanently raising the corporate tax rate by 1.5 percent on profitable banks and implementing a luxury tax. on private jets and luxury cars worth more than $100,000.

“We have been, and remain, committed to ensuring that everyone pays their fair share of tax,” the ministry said in an emailed statement on Friday.

The NDP says extra revenue should go to ordinary Canadians

Daniel Blaikie, the New Democrats’ finance critic, said there was “absolutely” a place for the federal government to tax “excess profits” at a time when “people are really under the gun when it comes to affordability” rent, food and gas.

“We saw Conservatives in Britain do this, for Pete’s sake,” Blaikie said, referring to Britain’s passage last month of an unexpected tax of 25 percent on oil and gas producers in the North Sea.

Blaikie suggested profits could be redirected to increase the GST tax credit and the Canada Child Benefit.

The money could also be used to extend a 2021 increase to Old Age Security payments for seniors ages 64-75, which currently only applies to those over 75, he added.

Daniel Blaikie, the New Democratic Party’s finance critic, said there was ‘absolutely’ a place for the federal government to tax the ‘profits’ of energy companies. (David Kawai/The Canadian Press)

Kevin Page, a former parliamentary budget officer, agreed that taxed profits could “be put to work in terms of strengthening our social safety net.”

In response, energy companies may argue that increased taxes impose an unfair burden on an industry still trying to recover from the global collapse in energy prices in the early stages of the pandemic, Page said.

“These are the tough trade-offs that we want our political leaders to wrap their heads around,” Page said.

The industry says Ottawa is benefiting from increased royalties

The Canadian Association of Petroleum Producers (CAPP) declined an interview but said in an emailed statement that higher commodity prices translate into a bump in federal royalties.

“Canada is set to see year-on-year growth of 283 percent in royalties collected from the four producing oil and gas provinces,” the association said in its statement, which also cited income taxes, municipal taxes and corporate taxes. remittances and auctioning of mineral rights as additional pools of government money flowing from the oil and gas sector.

Increasing production from democratic countries like Canada would help lower consumer costs, CAPP added.

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Javed Iqbal

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