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CanadaFinance Minister Freeland defends decision not to impose windfall...

Finance Minister Freeland defends decision not to impose windfall tax on oil and gas companies

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Ottawa, November 6: Finance Minister Chrystia Freeland is standing by her government’s decision not to impose a windfall tax on oil and gas companies in this week’s fall economic statement, despite calls from the NDP to do so, and other G7 countries making a similar move.

Freeland unveiled her fall economic statement Thursday, which gave an update on the state of the Canadian economy and detailed the Liberals’ spending plans. As Freeland had signalled in the weeks leading up to the statement, it featured little in terms of new spending, but it does include previously announced targeted measures, such as the doubling of the GST credit, dental benefits for some children under 12, and a one-time top-up for low-income renters.

The economic update also includes a “downside scenario,” an indication of the worst-case-scenario projected deficit, should Canada enter into a mild recession in the new year.

But the Liberals’ supply and confidence partners, the NDP, are calling for a windfall tax on large companies, including oil and gas companies, that goes beyond the windfall tax on banks and insurance companies announced in the last budget.

The windfall tax is a higher tax rate on specific above-average profits resulting from unexpected circumstances, such as the war in Ukraine, which has led to record revenue for oil and gas companies.

“The windfall tax on financial institutions was based on a very specific set of events,” she said. “During COVID-19 lockdowns, the federal government undertook extraordinary emergency spending. We basically put a line, a net, underneath the Canadian economy.”

“It was the right thing to do,” she also said. “And it also really, really helped our financial institutions.”

Freeland instead mentioned the two per cent tax on share buybacks by large corporations, a new measure included in the economic statement , which she said is “the right measure to ensure fairness, but also crucially to create the right incentives for Canada’s biggest companies, very much including our oil and gas companies.”

“We absolutely do agree that everyone in Canada needs to pay their fair share,” Freeland said. “That’s how we afford to have the strong compassionate society and social safety net that is so much a part of Canada and being Canadian.”

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