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Goldy Hyder: Higher corporate taxes will ultimately hurt Canadians

Commentary

The federal government has a spending problem. Not only has it proven unable to reign in current spending, it appears poised to announce new spending in next month’s budget. This raises the perennial question of how it intends to pay for it all. 

The latest rumour in Ottawa is the government will try to solve its problem by introducing a new corporate tax—one that targets Canada’s most successful companies. Large businesses, after all, have become a popular punching bag for politicians. Who would care if their profits were further curtailed? 

As it turns out, we should all care, because we would all feel the impact. 

Political attacks on private sector companies ignore the symbiotic relationships Canadians have with companies as employees, suppliers, and investors. Viewed through those prisms, taxing corporate profits undermines the interests of Canadians. 

Take employment: the largest publicly traded companies in this country employ millions of Canadians.Just 0.3 percent of Canada’s corporations are large businesses (with 500 employees or more), yet they employ over 4.4 million Canadians, equivalent to 36 percent of the private workforce. The jobs, salaries, and benefits of those Canadian employees—which can include various forms of supplemental health and pension plans—depend on the revenues and profitability of the businesses they work for. 

Take supply chains: many, if not most, of Canada’s small- and medium-sized enterprises (SMEs) form part of the domestic supply and value chains of larger companies. Those business-to-business ties create jobs for millions more Canadians. If large companies have lower revenues, they’ll purchase fewer goods or services from Canadian suppliers.

Take investment: millions of Canadians have their retirement savings invested in publicly traded companies listed on the Toronto Stock Exchange either directly through personal shareholdings or through mutual funds. The value of those investments is based on stock prices which depend on a company’s current profitability and its future growth prospects. 

If government imposes new corporate taxes and uses those tax dollars to support new spending, it will force affected Canadian companies to scale back on growth plans, pass the cost of the taxes on through price increases, or, worse, cut existing operations. That would be bad for all their Canadian consumers, employees, suppliers, and investors.

Any of these outcomes would exacerbate the affordability crisis. Reduced profits lead to reduced operations, which means fewer goods produced and services provided. If operations and revenues decline, it will cause job cuts across supply chains. Higher unemployment and prices with lower business investments is a pretty good recipe for economic stagnation.

Deputy Prime Minister and Minister of Finance Chrystia Freeland listens to a question during a news conference, in Ottawa, Monday, Jan. 29, 2024. Adrian Wyld/The Canadian Press.

It would also hurt retirees. A new tax on profits would cause share prices to fall, lowering the value of investments. This, at the same time Canada is undergoing a demographic shift that is seeing more and more Baby Boomers leaving the workforce and becoming retirees who plan to rely on their investments to sustain their post-career livelihoods.

Think about this in the context of a Canadian household. Take a family who, after paying all their taxes—including income taxes, capital gains taxes, property taxes, and other consumption taxes such as the HST—still manages to have a bit of disposable income. Imagine the government then saying they have too much left over and need to pay a new tax. 

When government targets profitable companies, it doesn’t credit those companies for the jobs they create or the investment portfolios they support or the SME-sized suppliers they keep in business. Government also fails to acknowledge that because taxes are based on a percentage of revenues, when companies earn more, they already pay higher taxes.

This is, of course, also true of the HST. When the cost of goods and services is driven higher due to inflation, the amount of tax the federal government collects is higher as a percentage of those higher prices. The dirty little secret that government doesn’t advertise is that during this inflationary period, it is collecting more tax revenues than before COVID.

If government wants to focus on the bottom line, here it is: higher corporate taxes won’t help Canadians they will hurt Canadians. It will further discourage business investment in Canada and force successful Canadian companies to either constrain or cancel any growth plans. New taxes on profits will hurt consumers, employees, suppliers, and investors.

Neil Seeman: May your opinions always be yours

Commentary

Your employer has as much right to your opinion as you have to his Bobby Hull rookie card. That doesn’t stop Generation Z from disclaiming—on social media, blog posts, and in journal articles—that “opinions expressed are solely my own and not those of my employer.” Herein lies the timorous caveat.

Upon delving into Google Scholar, a repository of peer-reviewed articles, I unearthed roughly 67,000 papers adorned with such disclaimers—a trend that gained fervor after 2009.

For ideas to flourish, we need to speak clearly on matters of ethics, politics, and morality. The ubiquity of disclaimers has me worried about the state of our freedom of speech, our grammar, and about human authenticity, too. Imagine Plato disclaiming in the presence of his teacher, Socrates: “I sense a contrast arising between your approach and that of the Sophists, who win arguments through logical fallacies for personal gain—and here I speak solely for myself, not for the Socratic circle, and not for Greece!”

Your opinions are always your own. We live in a world where our professional and personal lives can comingle. It’s always been thus. If you write something that leaves your clients or students wilting in fear—especially if your words cause grievous assault to an identifiable minority group—your employer has the right to reprimand you and maybe even sack you. Again, nothing new here.

What’s new is the expansionist march of meaningless disclaimers. Some modern disclaimers alert readers that all views expressed, no matter how repugnant or anodyne, do not represent the views of “present or past employers.” Meaningless, since the disclaimer can serve to disclaim—but not to disown. You own what you say, online and off. If you say something charming or witty or wise, yasher koach! If you rejoice in a heart emoji or a repost, you earned it. If you hurt someone, you must own your apology, too. 

While it’s sound advice for employees to exercise discretion and sensitivity when voicing controversial opinions aloud, the prevalence of these disclaimers online contributes to a chill on speech. The fear of professional repercussions or misinterpretation by employers or colleagues may lead people to temper authentic expression, compromising the principles of open discourse and intellectual diversity.

Authenticity is what employers and employees yearn for in each other; faux disclaimers are just that.

The language used in these disclaimers can be muddled with ambiguity. The phrase, “opinions expressed are solely my own,” falsely implies a clear demarcation between personal and professional viewpoints. It’s illogical in its construction, wrongly suggesting that others can lay claim to an individual’s thoughts or arguments. The word, “solely,” is redundant. Nor can we ever know if the opinions expressed have been proclaimed by others, with or without caveat; the disclaimer implies that you alone say this.

A 2014 U.S. tribunal decision (Kroger Company vs. Anita Granger) critiqued a firm’s policy requiring employees to always include a disclaimer of this nature. David I. Goldman, the administrative law judge in the case, conceded that companies have a legitimate interest in their employees not appearing to speak on their behalf “unless an employee is actively seeking to give the appearance of speaking on behalf of an employer.” In other words, the default position online should be as it is in physical interactions: if your neighbour, a schoolteacher, grumbles to you about the authoritarian remit of the teachers’ union to inject politics into the middle school curriculum, she’s expressing her view, not that of all educators.

To be sure, some people—politicians, union bosses, CEOs—are held to a higher standard when speaking publicly, since their jobs bestow on them stewardship toward voters, members, or shareholders. It’s their job, 24/7, and they’re generously compensated for being “always on.” And no disclaimer can or should absolve them from defaming anyone. If you work in the civil service or a job whose policies prohibit advocacy for a political party online, then your disclaimer won’t save you from transgression. 

What if we cast away the disclaimer, this timorous caveat? Discouraging such disclaimers might make us cherish free speech more, and revive friendlier and more robust exchange in the public square. 

Cardinal Richelieu, Chief Minister to King Louis XIII of France, is said to have cautioned: “If you give me six lines written by the hand of the most honest of men, I will find something in them which will hang him.” 

Your enemies will try to hang you no matter what you disclaim or how vigorously you disclaim it. And if you keep mum on matters of morality about which you care deeply, then the loudest voices win. Free speech and the marketplace of ideas wither under a booming din of disclaimers.