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Liberals to propose corporate stock buyback tax in fall economic statement: source

OTTAWA — A senior government official says Finance Minister Chrystia Freeland’s fall economic statement will propose taxing corporate stock buybacks in a bid to encourage businesses to invest in their businesses. and their national workers.

The source spoke to The Canadian Press on the condition that she not be named, as she was not authorized to publicly discuss the content of the financial update.

Thursday’s budget update is expected to include Canada’s response to US President Joe Biden’s Cut Inflation Act, which also included a 1% tax on corporate stock buybacks.

Environment Minister Steven Guilbeault lambasted oil companies last week for making very limited investments in climate action even as massive inflation-driven profits allowed them to fill shareholders’ wallets.

Oil giant Cenovus today reported third-quarter profits of $1.6 billion, up 192% from the same quarter a year ago.

The company also paid out $659 million to shareholders through share buybacks during the quarter.

The fall economic statement is also expected to focus on boosting investment in Canadian clean energy industries in response to new US tax incentives.

The government is expected to use the update to try to signal its fiscal responsibility as inflation is high and a potential recession looms.

Freeland warned that the government would not be able to compensate all Canadians for the rising cost of living.

During a speech in Windsor, Ont., last month, Freeland said the budget update will focus on the economy that Canada is trying to “grab” for the future – an economy heavily geared towards clean energy, electric vehicles, battery manufacturing and critical minerals.

The leaders of the federal parties took advantage of the upcoming fall economic statement to highlight their priorities.

In a letter to Freeland on Sunday, Conservative Leader Pierre Poilievre urged the government not to introduce new taxes and to refrain from imposing new spending without making proportionate budget cuts.

For his part, NDP Leader Jagmeet Singh penned a letter calling on Prime Minister Justin Trudeau to tackle “corporate greed” and immediately reform the EI program.

As fears of a potential recession grow, interest groups have also come forward with their demands.

In a press release, the Canadian Chamber of Commerce said that “as a growing number of experts predict a slowdown in the Canadian economy, it is important that the government use the fall economic statement to define a clear growth strategy”.

The group said it would like to see the federal government help address labor shortages while reforming regulations and avoiding new taxes.

Aggressive interest rate hikes by the Bank of Canada have also raised concerns among labor groups about the impact of an economic downturn on employment.

In a press release on the fall economic statement, the National Council of Unemployed Workers calls on the federal government to include employment insurance reforms in the update.

“We must not wait for the next crisis to fix the social safety net,” a spokesperson for the organization said in a statement.

This report from The Canadian Press was first published on November 2, 2022.

Nojoud Al Mallees, The Canadian Press