Avi Lewis has it backwards on corporate taxes

0:00Welcome to Hub Headlines. Today's program features the best commentary and analysis published in the Hub for March 31st. Up first is Charles Lemom, writing on how Avi Lewis is right about corporate welfare. On corporate taxes, he has it backwards. Avi Lewis won the Federal NDP leadership on Sunday with 56% of the vote on the first ballot. He inherits a party at a historic low, six seats, no official party status, and roughly $13 million in debt. Rebuilding will require more than enthusiasm. It will require serious policy. And on that front, Lewis has released a sweeping tax plan that covers everything from a wealth tax and higher capital gains tax to a new top personal income tax bracket. There is plenty to debate across the full plan, but I want to focus on one piece, corporate taxation. Because when it comes to corporate tax,

1:01Lewis's proposals would hurt the very workers they claim to help. Let's start with where Lewis gets it right. His campaign calls for ending fossil fuel subsidies and imposing conditions on corporate handouts. On this, count me as an ally. Government subsidies to corporations distort markets and rarely deliver promised returns. A recent study calculated that federal business subsidies alone rose 140% over nine years to reach $40 billion in 2023 to 2024, and are projected to hit $50 billion by 2027 to 2028. The study found that 80% of the subsidies harm economic performance. Lewis's grandfather famously coined the term corporate welfare bums in 1972. Half a century later, this problem has only grown. Here is where Lewis goes wrong. His plan proposes a one-time windfall profits tax that he claims would raise $50 billion

2:01and an ongoing 5% surtax on corporations exceeding $100 million in profits that he estimates would generate over $8 billion annually. The premise is that corporations are getting away without paying their share of taxes and workers are paying the price. The data suggests the opposite. Statistics Canada released figures in early March showing that total corporate taxes paid in Canada to all levels of government reached $155.9 billion in 2024. Triple the amount paid in 2008 and a $25 billion jump from 2023 alone. As a percentage of all government revenue, corporate taxes climbed from 9.1% in 2008 to 13.3% last year, the highest level in the available data. Put differently, for every dollar the Canadian economy produces, corporations now pay five cents in tax, up from three cents in 2008. This is not a country letting corporations off the hook. The combined federal provincial corporate tax rate

3:01has been largely stable over this period, averaging around 26%. So what changed? Energy sector profits surged post-pandemic. The federal government imposed a permanent 1.5% surtax on banks and life insurers in 2022, along with a one-time Canada recovery dividend. Higher corporate profits across sectors did the rest. The direction is unmistakable. Corporations are paying a growing share of the nation's tax bill without broad rate increases at the federal level. Lewis wants to push that share higher. This is where economics parts company with instinct. The corporate income tax is popular because it sounds like a tax on faceless entities, but corporations are legal entities, not people. Every dollar they pay in tax is ultimately born by someone. Workers through lower wages, shareholders through lower returns, or consumers through higher prices. Canadian research finds that when you account for businesses

4:01pulling back their investments, every additional dollar raised in provincial corporate tax revenue costs, workers between $1.52 and $3.85 in lost wages. International evidence is consistent. Labor bears between 50 and 100% of the corporate tax burden through lower wages driven by lower investment. This matters acutely now. Business investment per worker has been declining for a decade, and mobile capital is leaving Canada on net. Trump's tax reforms and tariff threats have made the United States a more aggressive competitor for investment. Raising corporate taxes in this environment will only accelerate the capital flight already hollowing out Canadian jobs and wages. Canada spent two decades under liberal and conservative governments alike, cutting corporate rates from a combined average above 42% to around 26% by 2012. As rates fell, investment climbed

5:02and corporate tax revenues as a percent of our economy held remarkably steady. But since 2018, Canada has lost its corporate tax advantage relative to the United States. Competitive rates attract capital, which generates the economic activity that sustains government revenue and the public services we all rely on. Lewis' instinct to target corporate subsidies is sound. But pairing subsidy cuts with higher corporate taxes replaces one distortion with another. The corporate income tax is a tax on workers who never see it on their pay stubs. If Lewis wants to rebuild the NDP as a credible voice for working Canadians, scrap the subsidies and use the fiscal room to make Canada's corporate tax system competitive again, that would be a platform worth taking seriously. That was a commentary by Charles Lamam. He is an economic and policy professional. You can read the full text of his article on our website, TheHub.ca. Our second essay is by Michael Kotler-Wunch

6:04and Richard Marso, writing on how Iran's deadly use of cluster munitions demands unequivocal condemnation. Cluster munitions strikes indiscriminately launched by the Islamic regime in Iran, and targeting Israeli civilians have murdered seven individuals in the past week and a half alone, a 70-year-old Jewish couple, a foreign worker, and four Palestinian women. This is the latest in a pattern of murderous attacks that should have been met with clear condemnation, not equivocation, from the international community. In its multi-front war started by the October 7th, 2023 massacre, the Islamic regime in Iran and its genocidal terror proxies have continued targeting civilians, directly and through its proxies, in Israel, and now in other neighboring countries as well. Since February 28th, the Israel Defense Forces' home front command estimates that more than half of the hundreds

7:05of ballistic missiles launched by the Islamic regime at Israeli population centers have carried cluster munitions. Weapons that, when utilized in highly populated areas, make civilian harm not incidental, but intentional and inevitable. Cluster munitions are not precision weapons. A single missile disperses dozens, sometimes hundreds, of smaller bomblets over a wide area. Many of these sub munitions failed to detonate on impact, leaving behind de facto minefields embedded in neighborhoods, playgrounds, and public infrastructure. Long after the initial strike, they continue to maim and kill. This is precisely why their use in or near civilian areas is so dangerous, and why international law places strict limits on these methods and means of warfare. These rules intended to be applied equally and consistently are neither new nor ambiguous.

8:05The Geneva Conventions, the bedrock of the law of armed conflict, establish clear obligations. Article 51, two prohibits making civilians the object of attack Article 48 enshrines the principle of distinction. Requiring parties to direct operations only against military objectives. Article 57 imposes a duty of constant care to spare civilians and civilian objects. These are not aspirational guidelines. They are binding rules, designed to preserve a minimum of humanity in war. Cluster munitions raise an additional layer of concern. The 2008 Convention on Cluster munitions prohibits their use, production, transfer, and stockpiling, reflecting a global recognition of their disproportionate impact on civilians. While neither Israel nor Iran is a party to that convention, its existence underscores

9:05a broader legal and moral consensus. Weapons that are inherently indiscriminate must never be used in populated areas. Even outside that treaty, the core principles of international humanitarian law apply. The prohibition on targeting civilians and on using weapons that cannot distinguish between civilians and combatants is central. The use of cluster munitions against civilian population centers is therefore not simply reckless. It is unlawful. Too often, the language surrounding such attacks blurs into generalities about escalation or cycles of violence. But clarity matters, not only on the battlefield, but in our words, when civilians are deliberately or indiscriminately targeted, it is not a tragic byproduct of conflict. It is a deliberate violation of the law by genocidal terror proxies and their patrons that systematically trample it

10:06while expecting to benefit from its protections and aid. Canada has long positioned itself as a champion of the rules-based international order. It is a signatory to the convention on cluster munitions and has incorporated its prohibitions into domestic law. That commitment carries with it a responsibility to speak clearly and act consistently when those norms are breached. Yet silence, moral equivalence, and impunity erode the very legal framework Canada is entrusted to uphold. The images of the devastation caused by these cluster munitions, of the elderly couple, Alana and Yaran Moshe's, home of entire affected neighborhoods, of a shattered train station, of lives cut short, and of unexploded bomblets scattered in civilian spaces are not abstractions. They are the intent of the criminal Islamic regime and its terror tentacles. International law is only as strong

11:06as the willingness of states to enforce it. If the indiscriminate targeting of civilians is met with ambiguity, the protections it promises become hollow. There should be no ambiguity here. Civilians cannot be the target of attack or deliberately endangered by the attacker. Those who deliberately violate international law must be held to account, not emboldened by moral collapse and cowardice. That was a commentary by Michael Kotler-Wunch and Richard Marso. Michael Kotler-Wunch is the Chief Executive of the International Legal Forum. Richard Marso is the Senior Vice President of Strategic Initiatives and General Counsel at the Center for Israel and Jewish Affairs. You can read the full text of their article on our website, the hub.ca. That's it for today's edition of Hub Headlines. We hope you enjoyed the program. Hub Headlines is produced by Alicia Rao. This program was narrated by automated voices. Thanks for listening.