Thank you so much, Chair and committee members.
My name is Bea Bruske. I'm the president of the Canadian Labour Congress. The CLC represents national and international unions, with more than three million members from coast to coast to coast in virtually every sector and industry in this country. I appreciate the opportunity to speak on behalf of them and to let you know that the CLC strongly supports the government's decision to more fairly tax capital gains.
Most Canadians assume that a dollar of income is a dollar of income, whether you earned it at a job or through a productive investment, but that's not the case when it comes to taxes. When you earn your income by flipping burgers 100% of that income is taxable, but when you earn your income by flipping stocks only 50% of that income is taxable. We don't think, quite frankly, that's fair. How can anyone justify that a dollar earned through your hard work should be taxed at a higher rate than a dollar reaped through ownership and investments?
Let's look at a real-life example. My first job was at a grocery store. In 2020, in the toughest days of the pandemic, before workers even knew what they were dealing with, they had to go to work at grocery stores so that we could keep on eating, while many of us had the opportunity to work from home. Those grocery store workers, whom we are grateful for, bravely working on those front lines, for a few months in 2020 got an extra $2 per hour in “hero pay”. Every single cent of that dollar of hero pay was taxed. That same year, a Canadian billionaire bought and sold shares in one of our country's largest forestry companies, netting capital gains of more than $9 million. Only half of that windfall was taxable. That billionaire pocketed $4.5 million tax-free. That's $4.5 million in tax-free capital gains. That's more money than the average worker will see in their lifetime.
When we put ourselves in the shoes of the average working person for a minute, we have to understand that is not fair. Canadians work hard and they pay taxes on their earnings. Those taxes that come off our paycheques support the schools for our kids, health care for ourselves and our loved ones, roads and public transit, parks, libraries and every other vital public service that we rely upon. Working people want and need strong, good-quality public services. We deserve safe, healthy and vibrant communities, and we are very much prepared to do our part to support that. What we insist on, however, is that everyone pay their fair share, that income is treated as income whether you're taxing a worker flipping burgers for a living or a CEO flipping stocks to make millions more.
Over the past few years, working people in Canada have struggled to keep up with the rising cost of living, and they know perfectly well that not everybody else is struggling as well. Canadians can see corporate CEOs and wealthy investors profiting from price gouging, and it's extremely frustrating to know that CEOs are ripping off ordinary people while getting preferential tax treatment on top of it. To know that our tax system taxes capital gains more lightly than workers' wages is infuriating. For many workers, the unfairness in the tax system adds insult to injury.
Opponents of this important but modest tax change are trying to distract with stories about family farms and family doctors. Make no mistake that the vast majority of untaxed capital gains are collected by people like the billionaire I mentioned earlier. Canadians know that the rich do not pay their fair share of taxes, and the data proves that. A recent study by the Canadian Centre for Policy Alternatives shows that, once all forms of income and taxes are accounted for, those receiving the top 1% of income in this country pay a lower tax rate than those in the bottom 99%. The treatment of capital gains is an important reason for that unfair outcome. For working people it's very obvious that we need fair tax rules. Those who have the means need to pay their fair share. Fair taxes for the ultrawealthy are essential for making life more affordable for everyone else, and that's why we support the changes to the capital gains inclusion rate.
I urge all parliamentarians to ask themselves a simple question: Do you think it's fair that a worker flipping burgers is taxed on 100% of his or her income while a CEO, making millions from flipping stocks, is taxed on only 50% of that income? If you don't think it's fair, then you need to support the small measure of tax fairness. If you do think it's fair, then please do not tell me that you are on the side of working Canadians.
Thank you, and we're pleased to answer questions.