Jagmeet Singh, leader of the NDP, proposed a private members’ bill on Tuesday that would increase corporate taxes based on the ratio between a company’s CEO’s pay and its average worker’s pay.
In the last 25 years, CEOs went from earning roughly 100 times the median worker salary to nearly 243 times in 2021. According to an NDP press release, the legislation will “combat the corporate greed that incentivizes driving up the costs of everything for Canadians.”
Canada’s richest CEOs now make 243 times more than the average Canadian worker.
Justin Trudeau and Pierre Poilievre have stacked the deck for CEOs, and against workers.
Today, I announced my plan to introduce legislation that will tackle excess CEO pay and invest in you. pic.twitter.com/cGX5hQJpo9
— Jagmeet Singh (@theJagmeetSingh) April 18, 2023
Singh’s proposal was inspired by Bernie Sanders and Elizabeth Warren’s Tax Excessive CEO Pay Act, which was put before the American Congress two years ago.
The upcoming bill proposes to increase corporate income tax by 0.5% if the CEO-to-median-worker pay ratio is between 50 and 100. The tax percentage then increases on a sliding scale, up to 5% if the ratio is 500 or more.
To illustrate, here’s how the US Act would apply to the Canadian market:
At RBC, CEO Tony Staffieri earned a salary of $13,615,047 in 2022. This was 164 times more than the average employee in his industry. If something like the US Senate Act had been in effect, RBC would have paid $200 million more in taxes.
Rogers would have also paid up to $23 million more in taxes because its CEO, Tony Staffieri, earned a salary of $13,615,047 last year. That’s 164 times more than what an average employee in his industry is paid.
“Galen Weston earned a salary of $11,792,068 in 2022, which was 431 times more than the average employee,” notes NDP’s press release. This means Loblaw would have paid up to $106 million more in taxes.
“While Justin Trudeau sits by and pretends there isn’t an issue because his friends are doing just fine and Pierre Poilievre works to tip the scales even more in favour of rich CEOs, the NDP is coming up with solutions,” said Singh.
Some agreed with Singh. “We need to address the flaws of capitalism,” on Twitter user wrote.
Great job Jagmeet Singh! Raising voice against the increasing gap between rich and poor. We need to address the flaws of capitalism…still have people with exceptional skills and talents earn their worth while not leaving hard working people in poverty….
— Harinder (@Harinde12669039) April 18, 2023
Others sided with CEOs. Twitter user @qapsaicin replied, citing risk as a justification for high CEO pay.
CEOs also built those companies and assume all the risk.
What risk do you face when you define your own salary paid through force by taxpayers?
Only when people see through your lies is there risk for you.
— Cap Saicin 🌶 (@qapsaicin) April 19, 2023
Singh was also called a hypocrite for accepting a pay raise of over $15,000 earlier this month.
Enjoying your latest pay increase?
Was that because you’re working harder or the dollar is worth less?
— MonkEh (@SteveDishMonkey) April 18, 2023
Singh’s bill may go against House of Commons rules, too. According to private members’ guidance, proposals bills “cannot impose, increase or extend the application of a tax.”
However, the bill is yet to be drafted, and Singh’s announcement does not explain how he plans to get around this rule. The legislation is, however, expected to include regulations to “prevent tax avoidance and contractor use to avoid paying this penalty.”
It’ll also call for transparency, requiring large companies to disclose their CEO-worker pay ratio.
We want to hear your thoughts. Do you think CEO salaries are excessive? Would a corporate tax, such as the one Singh proposes, reduce worker inequality?
Let us know in the comments.