There are two problems with gender bias of the tax system – a disproportionate benefit to men at the top incomes from tax breaks; and a loss of revenues for programs that mostly benefit women at the lower incomes.
Tax loopholes are used almost exclusively by top income earners, businesses and CEOs to maximize their bottom line and pay as little tax as possible. These include the Capital Gains Deduction, Employee Stock Options Deduction, the Meals and Entertainment Deduction and the Dividend Gross-up Credit. They also use private corporations for the same purpose.
“These are not gender neutral” says Diana Gibson, Communications Director for Canadians for Tax Fairness, “Women only accounted for 22% of the top 1% of income earners, 3 out of 100 top CEOs in Canada, 15.7 percent of majority owned small and medium sized businesses.”
The government says it wants to increase the labour force participation rate of women but it has so far only committed token amounts to affordable child care – the single most important way to boost women in the work force. The government needs the revenues to deliver programs like child care, elder care, pharmacare and pensions that are desperately needed by low income women in Canada.
“The IMF has said Canada should be spending $8 billion a year,” adds Gibson, “We currently don't even spend a tenth of that amount.”
The government left billions in revenues on the table in the last budget by: failing to properly close unfair tax loopholes ($12 billion); failing to tax the digital giants ($1 billion); and failing to close the door to corporate use of tax havens ($ 10-15 billion). Canada now ranks 25th out of 35 OECD countries when it comes to the ratio of tax revenue to GDP.
“For Canada to be a real leader in gender budgeting, the revenue side of the budget cannot be ignored.” Says Gibson, “That is where the rubber really meets the road on what the government can and can't do for gender equality.”
Media contact: Diana Gibson, Canadians for Tax Fairness: 780-910-0665