Finance Minister: No Windfall Tax on Oil and Gas Companies

Despite pressure from the New Democrats and other G7 countries, Canada’s Finance Minister Chrystia Freeland is sticking with the decision not to impose a windfall tax on oil and gas businesses in this week’s fall economic statement.

On Thursday, Freeland released her fall economic statement, which provided a status report on the Canadian economy and laid out the Liberals’ spending plans for the upcoming year. It doesn’t include much about spending, however, it does include previously released targeted initiatives, including the doubling of the GST credit, dental coverage for some children under 12, and a one-time top-up for low-income renters.

The “downside scenario,” or the worst-case scenario projected deficit, is also included in the economic report if Canada experiences a mild recession in the coming year.

However, the NDP is pushing for a windfall tax on large corporations, such as oil and gas businesses, in addition to the windfall tax on financial institutions introduced in the most recent budget.

Unexpected events, such as the conflict in Ukraine, have resulted in record revenue for oil and gas corporations, which has pushed some to call for a “windfall tax,” a higher tax rate on unusually large profits.

“The windfall tax on financial institutions was based on a very specific set of events,” said Freeland in an interview with CTV. “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 added. “And it also really, really helped our financial institutions.”

Instead, she brought up a new measure in the economic statement that taxes large corporations at a rate of two percent on share buybacks, calling it “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,” said Freeland. “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.”

“We’ve chosen to approach it in this fall economic statement in a slightly different — but I think really smart — way,” added Freeland.

While the Conservatives want the Liberals to reduce the carbon tax, the NDP has demanded that they eliminate the GST on home heating.

Original source material for this article taken from here