(OTTAWA) – The Green Party of Canada is calling on the Liberals to honour their campaign promise to close a lucrative tax loophole for the rich by taxing stock options like personal income. When exercised, stock options are taxed at half the rate of ordinary income. This is grossly unfair and means that average Canadians are subsidizing senior executives who may already be earning hundreds of times more than the average Canadian.
“In both their 2011 and 2015 campaign platforms, the Liberals promised to limit the favourable tax treatment of stock options,” said Bruce Hyer, GPC Deputy Leader. “At the time, the Liberals noted, ‘8,000 of the wealthiest Canadians deduct an average of $400,000 from their taxable incomes.’ But six months after taking office, Finance Minister Bill Morneau abandoned this promise.
“Stock options are an extremely important compensation tool for business and, particularly for Canada's startup community, a vital economic engine that deserves every support it can get. But if the Liberals thought the system was broken in 2011 and 2015, were they wrong then or are they wrong now? Are they just listening to the last voice they heard at their latest fundraiser? They seem to be finding it easier to break their promises than to do the hard work required to live up to them,” Mr. Hyer said.
Elizabeth May, Leader of the Green Party of Canada (MP, Saanich-Gulf Islands), said: “The government is losing an estimated $600 million in annual revenue by ignoring this tax loophole on stock options. This revenue could be used to create a federal tax credit for investment, and to develop a consistent program across provinces so that investment dollars can better respond to ideas and opportunities, rather than relying on the piecemeal programs that frustrate investors and pit one province against another.
“Just like the Liberals’ promise on electoral reform, real change requires doing the difficult work of honouring their word. The Liberals are revealing they're only good at tackling low-hanging fruit. Minister Morneau should do the right thing for all Canadians by fixing the tax loophole on stock options in Budget 2017,” Ms. May concluded.
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