No Surprise: Liberals Bowed Down To Bay Street CEOs

Is it too much to ask for a government that represents the people?

In a revelation that will probably surprise nobody, it turns out the Liberal government wasn’t quite honest about their reasons for backing down on a campaign pledge to close a major tax loophole.

A tax loophole allowed some of Canada’s wealthiest CEOs to pay $750 million less in taxes every year, since income earned on stock options is taxed at a lower rate than other income.

During the campaign, the Liberals promised to get rid of the loophole. Here’s what their election platform said:

Liberal Stock Options - Broken Promise

I think taxes should be lower and government should be smaller. But loopholes need to be closed. Giving a special break to corporate CEOs while middle class and low-income people struggle is not acceptable.

The Liberals seemed to agree.

Until they took power.

When they dropped their budget, it was conspicuously missing any mention of closing the loophole. Why did they break their promise?

Finance Minister Bill Morneau said it was because they heard from “small firms and innovators” who wanted to maintain the loophole.


Morneau was actually lobbied by numerous industry groups, including the Canadian Venture Capital and Private Equity Association, CEOs from the tech sector, Michael Wilson – former Mulroney era Finance Minister, and John Manley – CEO of the Business Council and former Finance Minister.

Those high-powered lobbyists expressed concern about the policy, and suggested some tweaks such as grandfathering in any changes, or removing the tax break from only the wealthiest individuals.

Even though the Liberals own documents showed that the tax break almost exclusively benefitted only the wealthiest individuals, Morneau caved to the Bay Street pressure.

While exemptions or grandfathering the changes could have been good ideas, Morneau went a step further and cancelled any and all plans to close the tax loophole.

It remains fully in force, giving a special break to the richest of the rich. At the same time, Canadian consumers are about to be hit with a massive carbon tax, which will raise our cost of living and take money out of our pockets.

I bet Morneau won’t listen to any “lobbying” from regular Canadians on that one though. It seems to get this government’s attention you have to be rich and well-connected.

Where has the Real Change gone?

Spencer Fernando

Photo – Twitter