After slapping large banks and insurance companies with aon their profits, Liberal legislators are concocting a new cash grab that targets a larger swath of our capital markets.
Share buybacks are popular because they are a means for public companies to return excess capital to their shareholders. Companies benefit and so do their investors. So, naturally our parliamentarians have taken it upon themselves to champion a solution in search of a problem. The proposed tax measure, which was unveiled earlier this month as part of the government’s fall economic statement, was indeed inspired by a 1-per-cent tax on corporate share buybacks recently imposed by the Biden administration.
Moreover, the proposed measure won’t achieve Ottawa’s other purported objective of ensuring that businesses pay their fair share of taxes because it would only apply to public companies. “Recent government officials blamed oil companies for not investing enough despite record profits. Honestly, it seems hard to fault those companies when barely 12 months ago, most governments were bashing them for daring to increase [capital expenditures] in new oil production,” it added.
It would be a mistake for Ottawa to ignore his warning. After all, the COVID-19 pandemic has taken a toll on entrepreneurship. Small businesses, in particular, bore the brunt of economic shutdowns.