Business
The Problem of Corporate Tax Rate Hikes

Why it’s nearly impossible to avoid causing more harm than good
Are Canadian corporations paying their share? Well, what is their share? And before we go there, just how much are Canadian corporations paying?
According to Statistics Canada, in the second quarter of 2024 the federal government received $221 billion from all income tax revenues (excluding CPP and QPP). Provincial governments took in another $104 billion, and local (municipal) governments got $21 billion. Using those numbers, we can (loosely) estimate that all levels of government raise somewhere around $1.38 trillion annually.
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If you’re curious (and I know you are), that means taxes cost each man, woman, and child in Canada $33,782 each year. Trust me: I feel your pain.
Based on Statistics Canada data from 2022 (the latest comparable data available), we can also say that roughly ten percent of those total revenues come from corporate taxes at both the federal and provincial levels.
Keep that 10:90 corporate-to-personal tax revenue ratio in mind. Because what if raising the corporate tax rate by, say, five percent ends up driving businesses to lay off even one percent of workers? Sure, you’ll take in an extra $7 billion in corporate taxes, but you might well lose the $12 billion in personal income taxes those laid-off workers would have paid.
How Much Should Corporations Pay?
Ok. So how should we calculate a business’s fair share? Arguably, a single dollar’s worth of business activity is actually taxed over and over again:
- When a corporation earns revenue, it’s taxed on its profits.
- Any remaining profit may be distributed to shareholders in the form of dividends. Shareholders, of course, will pay income tax on those dividends.
- Corporations pass on part of the tax burden to consumers through higher prices. When consumers pay those higher prices, a part of every dollar they spend is indirectly taxed through the corporation’s price adjustments.
- Employee wages paid from after-tax corporate profits are taxed yet again.
- Shareholders may eventually realize capital gains when they sell their shares. These gains are, naturally, also taxed.
I guess the ideal system would identify a corporate tax rate that takes all those layers into account to ensure that no single individual’s labor and contribution should carry an unreasonable burden. I’ll leave figuring out how to build such a system to smart people.
Does “Soaking Rich Corporations” Actually Work?
Do higher corporate taxes actually improve the lives of Canadians? Spoiler alert: it’s complicated.
Government policy choices generally come with consequences. From time to time, those will include actual solutions for serious problems. But they usually leave their mark in places of which lawmakers were initially barely aware existed.
Here’s where we get to explore some of those unintended consequences by comparing economic performance between provinces with varying corporate tax rates. Do higher rates discourage business investment leading to lower employment, economic activity, and incoming tax revenues? In other words, do tax rate increases always make financial sense?
To answer those questions, I compared each province’s large business tax rate with four economic measures:
- Gross domestic product per capita
- Business gross fixed capital formation (GFCF – the money businesses invest in capital improvements: the higher the GFCF, the more confidence businesses have in their long-term success)
- Private sector employment rate
- My own composite economic index (see this post)
Using four measures rather than just one or two gives us many more data points which reduces the likelihood that we’re looking at random statistical relationships. Here are the current provincial corporate tax rates for large businesses:
If we find a significant negative correlation between, say, higher tax rates and outcomes for all four of those measures, then we’d have evidence that higher rates are likely to have a negative impact on the economy (and on the human beings who live within that economy). If, on the other hand, there’s a positive correlation, then it’s possible higher taxes are not harmful.
When I ran the numbers, I found that the GDP per capita has a strong negative correlation with higher tax rates (meaning, the higher the tax rate, the lower the GDP). GFCF per capita and the private sector employment rate both had moderately negative correlations with higher taxes, and my own composite economic index had a weak negative correlation. Those results, taken together, strongly suggest that higher corporate tax rates are indeed harmful for a province’s overall economic health.
Here’s a scatter plot that illustrates the relationship between tax rates and the combined outcome scores:
Alberta, with the lowest tax rate also has the best outcomes. PEI, along with New Brunswick and Nova Scotia, share the high-tax-poor-outcome corner.
I guess the bottom line coming out of all this is that the “rich corporations aren’t paying their share” claim isn’t at all simple. To be taken seriously, you’d need to account for:
- The true second-order costs that higher corporate taxes can impose on consumers, investors, and workers.
- The strong possibility that higher corporate taxes might cause more harm to economies than they’re worth.
- The strong possibility that extra revenues might just end up being dumped into the general pool of toxic government waste.
Or, in other words, smart policy choices require good data.
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Business
EU investigates major pornographic site over failure to protect children

From LifeSiteNews
Pornhub has taken down 91% of its images and videos and a huge portion of the last 9% will be gone by June 30 because it never verified the age or consent of those in the videos.
Despite an aggressive PR operation to persuade lawmakers that they have reformed, Pornhub is having a very bad year.
On May 29, it was reported that the European Commission is investigating the pornography giant and three other sites for failing to verify the ages of users.
The investigation, which comes after a letter sent to the companies last June asking what measures they have taken to protect minors, is being carried out under the Digital Services Act. The DSA came into effect in November 2022 and directs platforms to ensure “appropriate and proportionate measures to ensure a high level of privacy, safety, and security of minors, on their service” and implement “targeted measures to protect the rights of the child, including age verification and parental control tools, tools aimed at helping minors signal abuse or obtain support, as appropriate.”
According to France24: “The commission, the EU’s tech regulator, accused the platforms of not having ‘appropriate; age verification tools to prevent children from being exposed to pornography. An AFP correspondent only had to click a button on Tuesday stating they were older than 18 without any further checks to gain access to each of the four platforms.”
Indeed, Pornhub’s alleged safety mechanisms are a sick joke, and Pornhub executives have often revealed the real reason behind their opposition to safeguards: It limits their traffic.
Meanwhile, Pornhub — and other sites owned by parent company Aylo — are blocking their content in France in response to a new age verification law that came into effect on June 7. Solomon Friedman, Aylo’s point man in the Pornhub propaganda war, stated that the French law was “potentially privacy infringing” and “dangerous,” earning a scathing rebuke from France’s deputy minister for digital technology Clara Chappaz.
“We’re not stigmatizing adults who want to consume this content, but we mustn’t do so at the expense of protecting our children,” she said, adding later, “Lying when one does not want to comply with the law and holding others hostage is unacceptable. If Aylo would rather leave France than apply our law, they are free to do so.” According to the French media regulator Arcom, 2.3 million French minors visit pornographic sites every month.
Incidentally, anti-Pornhub activist Laila Mickelwait reported another major breakthrough on June 7. “P*rnhub is deleting much of what’s left of the of the site by June 30,” she wrote on X. “Together we have collectively forced this sex trafficking and rape crime scene to take down 91% of the entire site, totaling 50+ million videos and images. Now a significant portion of the remaining 9% will be GONE this month in what will be the second biggest takedown of P*rnhub content since December 2020.”
“The reason for the mass deletion is that they never verified the age or consent of the individuals depicted in the images and videos, and therefore the site is still awash with real sexual crime,” she added. “Since the fight began in 2020, 91% of P*rnhub has been taken down — over 50 million images and videos. Now a huge portion of the last 9% will be gone by June 30 because P*rnhub never verified the age or consent of those in the videos and the site is a crime scene.”
Mickelwait has long called for the shutdown of Pornhub and the prosecution of those involved in its operation. This second mass deletion of content, as welcome as it is, reeks of a desperate attempt to eliminate the evidence of Pornhub’s crimes.
Business
Natural gas pipeline ownership spreads across 36 First Nations in B.C.

Chief David Jimmie is president of Stonlasec8 and Chief of Squiala First Nation in B.C. He also chairs the Western Indigenous Pipeline Group. Photo courtesy Western Indigenous Pipeline Group
From the Canadian Energy Centre
Stonlasec8 agreement is Canada’s first federal Indigenous loan guarantee
The first federally backed Indigenous loan guarantee paves the way for increased prosperity for 36 First Nations communities in British Columbia.
In May, Canada Development Investment Corporation (CDEV) announced a $400 million backstop for the consortium to jointly purchase 12.5 per cent ownership of Enbridge’s Westcoast natural gas pipeline system for $712 million.
In the works for two years, the deal redefines long-standing relationships around a pipeline that has been in operation for generations.
“For 65 years, there’s never been an opportunity or a conversation about participating in an asset that’s come through the territory,” said Chief David Jimmie of the Squiala First Nation near Vancouver, B.C.
“We now have an opportunity to have our Nation’s voices heard directly when we have concerns and our partners are willing to listen.”
Jimmie chairs the Stonlasec8 Indigenous Alliance, which represents the communities buying into the Enbridge system.
The name Stonlasec8 reflects the different regions represented in the agreement, he said.
The Westcoast pipeline stretches more than 2,900 kilometres from northeast B.C. near the Alberta border to the Canada-U.S. border near Bellingham, Wash., running through the middle of the province.

It delivers up to 3.6 billion cubic feet per day of natural gas throughout B.C. and the Lower Mainland, Alberta and the U.S. Pacific Northwest.
“While we see the benefits back to communities, we are still reminded of our responsibility to the land, air and water so it is important to think of reinvestment opportunities in alternative energy sources and how we can offset the carbon footprint,” Jimmie said.
He also chairs the Western Indigenous Pipeline Group (WIPG), a coalition of First Nations communities working in partnership with Pembina Pipeline to secure an ownership stake in the newly expanded Trans Mountain pipeline system.
There is overlap between the communities in the two groups, he said.
CDEV vice-president Sébastien Labelle said provincial models such as the Alberta Indigenous Opportunities Corporation (AIOC) and Ontario’s Indigenous Opportunities Financing Program helped bring the federal government’s version of the loan guarantee to life.
“It’s not a new idea. Alberta started it before us, and Ontario,” Labelle said.
“We hired some of the same advisors AIOC hired because we want to make sure we are aligned with the market. We didn’t want to start something completely new.”
Broadly, Jimmie said the Stonlasec8 agreement will provide sustained funding for investments like housing, infrastructure, environmental stewardship and cultural preservation. But it’s up to the individual communities how to spend the ongoing proceeds.
The long-term cash injections from owning equity stakes of major projects can provide benefits that traditional funding agreements with the federal government do not, he said.
Labelle said the goal is to ensure Indigenous communities benefit from projects on their traditional territories.
“There’s a lot of intangible, indirect things that I think are hugely important from an economic perspective,” he said.
“You are improving the relationship with pipeline companies, you are improving social license to do projects like this.”
Jimmie stressed the impact the collaborative atmosphere of the negotiations had on the success of the Stonlasec8 agreement.
“It takes true collaboration to reach a successful partnership, which doesn’t always happen. And from the Nation representation, the sophistication of the group was one of the best I’ve ever worked with.”
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