Editorial: Yes, ministers, it's time to tackle tax and trade

If Canada’s first ministers meetings are to contribute anything to the country’s cohesion as a global economic player, more than political theatre needs to be on their agenda.

The most recent instalment added a lot to that theatre but little to that cohesion, and that’s lamentable considering the number of issues needing leadership from Canada’s senior levels of government.

High on that to-do list would be interprovincial free trade and the need to remove the regional barriers that shield companies from domestic competition. Those parochial roadblocks stifle innovation within Canada’s borders and consign it to minor-league status in global trade.

Neither helps promote the prime minister’s contention that Canada is a trading nation.

There is also no cohesive national political will to close tax loopholes in a taxation regime that allows corporations to export billions of dollars to offshore tax havens while benefiting from Canada’s infrastructure, health care, political stability and skilled talent pool.

A recent Professional Institute of the Public Service of Canada (PIPSC) report notes that an estimated $3 billion annually in tax revenue is lost to offshore tax havens.

It also points out how cuts to Canada Revenue Agency (CRA) budgets have hollowed out the CRA’s capacity to pursue major corporations and the wealthy and plug the multibillion-dollar revenue leaks draining prosperity out of the country.

Instead, it sets its sights on small businesses and less affluent Canadians who have fewer resources to defend themselves. 

PIPSC argues that the CRA therefore no longer has “adequate audit coverage capacity to ensure tax laws are being applied fairly across the country.”

The result is that, according to the Conference Board of Canada, tax evasion is cheating the federal government and Canadian taxpayers out of $9 billion to $48 billion per year.

That surely warrants first minister and prime ministerial action.