Top companies paid $30B less in corporate taxes than expected: report

The report analyzed 123 Canadian corporations worth at least $2 billion and found the effective or actual tax rate paid by these companies was about 15%.

A new report from Canadians for Tax Fairness says top companies paid $30 billion less in taxes last year than would be expected under existing corporate tax rates.

The report analyzed the financial statements of 123 Canadian corporations worth at least $2 billion and found the effective or actual tax rate paid by these companies was about 15 per cent in 2021 – significantly lower than the 26.5 per cent average of the combined federal and provincial tax rate.

The group says that compares to an average effective tax rate of 19 per cent between 2017 and 2019, or an average of $13.5 billion shortfall in tax revenues in the years before the pandemic.

Report author D.T. Cochrane says the lower effective tax rate paid by corporations can be due to a range of reasons, from legal tax deductions to claiming profits in lower tax jurisdictions.

Canadians for Tax Fairness describes itself as a non-profit, non-partisan organization that advocates for fair and progressive tax policies.

It is calling on federal Revenue Minister Diane Lebouthillier to be transparent about what accounts for the lost tax revenue.

Tax filings could shed some light on why these corporations paid less in taxes, but Cochrane says they don’t provide enough detail to understand the gap in taxes paid.

“We’re not saying this corporation or that corporation has done wrong,” said Cochrane.