The great Canadian CEO tax heist

Every so often I’m reminded there’s a ridiculous loophole in Canada under which individuals can deduct 50% of the income earned through stock options (in other words, people compensated with stock options pay tax on *only half* that income.)

The loophole is predominantly taken advantage of by highly compensated people, often high-ranking executives at large firms (in 2014, for example, three quarters of all deductions claimed through the loophole were from 8,000 very high-income Canadians).

We’ve effectively created a system in which people who quite literally earn 200x the average income don’t have to pay taxes on their total earnings.

The chart below shows what Canada’s highest paid executives made in 2017. Now compare the base salaries to the actual take home pay (which often includes stock options). I don’t have a figure for how much the deduction was used in 2017, but in 2014 the loss of tax revenue from this loophole alone was $750 million.

Rank Name Company Base Salary Other Compensation* Total
1 Michael Pearson Valeant Pharmaceuticals International Inc. $182,902,189 $182,902,189
2 Donald Walker Magna International Inc. $415,462 $26,124,238 $26,539,700
3 Hunter Harrison Canadian Pacific Railway Ltd. $2,803,522 $17,098,931 $19,902,453
4 Steven Hudson Element Financial Corp. $1,200,000 $18,077,385 $19,277,385
5 Mark Barrenechea Open Text Corp. $981,787 $16,988,255 $17,970,042
6 Donald Guloien Manulife Financial Corp. $1,723,671 $13,889,848 $15,613,519
7 Brian Hannasch Alimentation Couche-Tard $1,356,260 $13,458,456 $14,814,716
8 Linda Hasenfratz Linamar Corp. $605,839 $13,608,995 $14,214,834
9 James Smith Thomson Reuters Corp. $1,981,433 $11,730,709 $13,712,142
10 Bradley Shaw Shaw Communications Inc. $2,500,000 $10,641,235 $13,141,235

It’s an obvious point (made forcefully by Quebec writer Alain Denault) but one that somehow eludes a lot of public discussions around taxation:

Every dollar of tax revenue not collected from a CEO means a longer hospital queue, another pothole; another day a toddler has to wait before receiving a critical operation; another delayed renovation in a public housing unit; another15 minutes a worker has to stand at the bus stop before she can be at home, spending time with her kids and enjoying her life.

Chart source: CCPA


Fragments of a Revolution, Part IV: Federalism, French power, and Canadian nationalism

Part IV: Pierre Elliot Trudeau – Federalism, French power, and Canadian nationalism

We want to bear witness to the Christian and French fact in America. Fine; so be it. But let’s get rid of all the rest. We should subject to methodical doubt all the political categories relegated to us by the previous generation; the strategy of resistance is no longer conducive to the fulfillment of our society. The time has come to borrow the ‘functional’ discipline from architecture, to throw to the winds those many prejudices with which the past has encumbered the present, and to build for the new man. Let’s batter down the totems, let’s break the taboos. Better yet, let’s consider them null and void. Let us be coolly intelligent. – Cite Libre, 1950[1]

Pierre Trudeau’s contribution to the inaugural issue of Cite Libre presaged much of the kind of politics that he would later champion in his political career: first as an MP and, shortly after, as Justice Minister and then Prime Minister. Like Lévesque and his fellow contributors at Cite Libre, Trudeau drew heavily on the self-assurance and zeal for modernization upon which the Quiet Revolution had been built. Though his exposure to Keynes, Locke, Mill, and Marx at Harvard had not caused him to abandon Catholicism, he had returned to Montreal in 1949 with a firmly secular view[2] that privileged the rational over the spiritual and development over tradition in the political sphere. This is implicit in many of Trudeau’s writings throughout the 1950s and 1960s in which he repeatedly prefaces arguments with statements such as “the function of a state is to endure the establishment and maintenance of a legal order that will safeguard the development of its citizens”[3] or “a fundamental condition of representative democracy is a clear allocation of responsibilities”[4]: his starting point always being the role of states or democracies as such rather than those presently existing. For Trudeau, the modern democratic state and its machinery were constructions that rested solely upon reason, the realm of the spirit being a completely private matter. His approach to politics, then, was overwhelmingly that of a self-conscious modernist with a firm belief in material and social progress, rationalism, and liberal egalitarianism. It was a thoroughly “functional discipline”.

This philosophical grounding governed his trajectory in politics from its earliest days, when he developed a profound hostility to the “Maitres chez nous” nationalism of the Quiet Revolution. In a Cite Libre editorial that appeared just before the toppling of the Union Nationale in 1960 Trudeau offered only a grudging endorsement of Jean Lesage’s Liberals, whose neo-nationalist campaign emphasizing provincial autonomy and special status made him profoundly uncomfortable.[5] In an editorial for Le Devoir that same year, he wrote pessimistically of Quebec’s prospects for modernization pronouncing “I’m confident French Canadians will once again miss the turn…At least, they’ll miss it if their political authorities continue to cultivate mediocrity”.[6] In the forward to his compiled work Federalism and the French Canadians, Trudeau wrote that his entry into politics in 1965 was a direct response to the “Lesage government and public opinion in Quebec [magnifying] provincial autonomy into an absolute” and was an act aimed at defending federalism from the forces of nationalism.[7] The substitution of socialism for nationalism was a line Trudeau was not prepared to cross.

But his hostility to nationalism did not amount to a denial of the French fact in Canada. In a 1965 essay written at the University of Montreal, he wrote that bilingualism should become a national fact in the face of a pluralist reality, reasoning that “the [Anglophone] majority [must stop] behaving as if it held…exclusive rights, and [must accept] the country’s federal nature with all its implications”.[8] In a subsequent address to the Canadian Bar Association he argued that reforms of this nature – aimed at recognizing and institutionalizing the country’s plural character– must ultimately be realized at the constitutional level such that they are free from the prospect of statutory encroachment and enshrined as supreme law.[9] Importantly, like his contemporaries at Cite Libre and the ministers in Lesage’s government, he called for Quebec to pursue a program of rapid economic expansionism:

Quebec must assert itself as a province that fosters moral, intellectual, artistic, scientific, and technical values. When Quebec has produced or attracted a sufficient number of real philosophers, real scientists, real film directors, real economists, real experts in computer technology, and a large number of true statesmen, the ‘French fact’ will prosper in North America, and will have no need of the separatist crutch.[10]

Rattrapage and epanouissement were thus as central to Trudeau’s political project as they were to Lesage and Lévesque. But his conception of Quebec’s modern self-assertion saw a French fact that preserved itself through cultural achievement within an improved federal framework, rather than one that succumbed to the nationalist demand for autonomy. In contrast, he called for the Quebecois to “abandon their role of oppressed nation and decide to participate boldly and intelligently in the Canadian experience”.[11]

The revised federal arrangement envisioned and campaigned for by Trudeau was not one of increased centralization, but rather of more concretely distinguished jurisdictional responsibilities. His defied expectations by siding with conservative nationalists in the late 1950s to oppose postsecondary subsidies offered by the government of Prime Minister Saint Laurent, arguing that Canada’s bifurcated form of sovereignty needed to keep areas of provincial and federal responsibility discrete if it was to remain successful and accountable.[12] Appropriating an idea championed by the federal CCF (of which Trudeau was then a member)[13] and a number of Quebec trade unions in the 1950s he called for a form of fiscal federalism built around the principle of equalization, by which the federal government would redistribute national wealth among the provinces to ensure comparable fiscal capacity and service provision across the country as a whole. Such a model of federalism, he asserted, would preserve provincial autonomy and democratic accountability in the context of a cooperative and cohesive political enterprise.[14]


As we have seen, the federalist model of intergovernmental relations developed by Trudeau during the 1950s and 1960s had as its primary goal the promotion of a liberal egalitarianism in which provinces were yielded their distinct areas of jurisdiction within a framework that treated them as equal partners within a cooperative arrangement. The cultural pluralism of Canada was to be protected by legal reforms that entrenched bilingualism in federal institutions and transformed their exclusively anglophone character. Nevertheless, this vision was aggressively distinguished from the nationalism, which, by the mid-1960s, was strongly on the ascendancy in Quebec. The nationalism of self-determination, by which a particular ethnic group asserted sovereignty through its own state, was not simply an incorrect formulation, but a profoundly dangerous one.

To insist that a particular minority must have complete sovereign power is to pursue a self-destructive end. Because every national minority will find, at the very moment of its liberation, a new minority within its bosom which in turn must be allowed the right to demand its freedom. And on and on would stretch the train of revolutions until the last-born of the nation-states turned to violence to put an end to the principle that gave it birth.[15] 

For Trudeau the nation-state was a remnant of prewar myopia, an obstacle to modernization that had to be condemned to the dustbin of history.

Trudeau’s tenure as prime minister was overwhelmingly spent promoting this vision of federalism. The Official Languages Act of 1969 guaranteed the equality of the French language with English in the federal government and succeeded in bringing a much greater share of francophones into the civil service.[16] His controversial National Energy Program, with its emphasis on fiscal redistribution from richer provinces to poorer ones[17], built on the theory of cooperative federalism he had developed during the 1950s. What was undoubtedly his greatest political achievement, the Canadian Charter of Rights and Freedoms, embodied the liberal egalitarianism he had once promoted on the pages of Cite Libre in opposition to the more communitarian outlooks of many of his colleagues.

While he may have rejected the atavistic relation between nation and state that came to be championed by Lévesque, the residual traces of the Quiet Revolution’s rattrapage and epanouissement were transmuted into Trudeau’s overall constitutional vision for Canada. Christian Dufour has importantly observed that, given this fact, Trudeau’s federalism can hardly be separated from a kind of nationalism. The essential difference was that, while his “French power” projected itself outside of Quebec and onto a Canada which it sought to make newly assured and self-confident, Lévesque’s nationalism asserted itself inwards. In this sense, “Quebec Nationalism and French Power were two means for the Quebec identity to assert itself.”[18] Through Pierre Elliot Trudeau, the Quiet Revolution became a pan-Canadian phenomenon. But his French Power substituted the communitarianism of the Canadiens for a rationalist liberalism in which individuals rather than groups would form the basis for legitimacy and a constitution that enshrined it, rather than an ethnic identity, would serve as the icon of collective identification.

Fragments of a Revolution, so far: 

Part I

Part II

Part III


[1] Trudeau’s editorial was originally published unsigned.

[2] English. 149.

[3] Trudeau, Pierre E. “Quebec and the Constitutional Problem.” 1965. Federalism and the French Canadians. English ed.: Macmillan, 1968. Print. 21.

[4] Trudeau, Pierre E. “Federal Grants to Universities.” 1957. Federalism and the French Canadians. English ed.: Macmillan, 1968. Print. 79.

[5] English. 336-337.

[6] Ibid. 338.

[7] Trudeau, Pierre E. Federalism and the French Canadians. English ed.: Macmillan, 1968. Print. xix.

[8] Quebec and the Constitutional Problem. 5.

[9] Trudeau, Pierre E. “A Constitutional Declaration of Rights.” 1967. Federalism and the French Canadians. English ed.: Macmillan, 1968. Print. 54-55.

[10] Quebec and the Constitutional Problem. 34.

[11] Ibid. 31.

[12] Federal Grants to Universities. 79-80, 87.

[13] English. 261.

[14] Trudeau, Pierre E. “De Libro, Tributo…Et Quibusdam Aliis.” 1954. Federalism and the French Canadians. English ed.: Macmillan, 1968. Print. 71-76.

[15] Trudeau, Pierre E. “New Treason of the Intellectuals.” 1962. Federalism and the French Canadians. English ed.: Macmillan, 1968. Print. 158.

[16] English, John. Just Watch Me: The Life of Pierre Elliott Trudeau, 1968-2000. Toronto: Vintage Canada, 2010. Print. 129-130.

[17] Ibid, 483.

[18] Dufour. 76.


A final note on Independence

Regardless of which side prevails in the referendum today, Scottish nationalism has asserted itself so loudly in the past few months that the consequences will be tangible even in the face of a No vote: Westminster’s leaders are already offering further devolution of powers and the episode has successfully sent the complacent London establishment into panic mode.

Whatever your view of the referendum, anyone frustrated at the ossified state of British politics should welcome this development. Neoliberalism may have wrought destruction everywhere but in Britain it has affected a massive socioeconomic transformation with consequences that have completely restructured the body politic in just a few decades. Once a social democratic country with a huge manufacturing sector, a dynamic welfare state, and a ruling class tamed by both democracy and public ownership, Britain today is an economic oligarchy lacking either solidarity or social justice. Its working class, once proudly assertive at the highest levels of political decision-making, has been reduced to a precarious postindustrial rump, suffering the double indignities of poverty and class chauvinism; the latter exemplified by a morally reprehensible tabloid/entertainment culture which delights in demonizing the casualties of Margaret Thatcher’s counter-revolution as parasites for the amusement of its smug economic beneficiaries. That the party which once proudly and openly represented the interests of the working class spent the better part of its most recent tenure in office embracing and even deepening the injustices of Thatcherism can only add to visceral sense of misery and despair felt by so many Scottish, English, Welsh, and Northern Irish alike.


In the face of all this, a Tory prime minister who once claimed to embrace social justice now appropriates the iconography of wartime austerity while asking people all over the UK to accept even deeper retrenchment to pay for a crisis wrought by the very amoral greed which his party’s most popular leader helped make culturally hegemonic.

Britain today is a country which officially embraces enterprise, entrepreneurship, individual freedom, and social mobility. In practice, it is a country run by and for a narrow political elite from a select group of families who inherit their wealth and send their children to the same cabal of exclusive private schools while hollowing out social provisions and gleefully demanding people on benefits “work harder” to “earn” their miserable payouts. It is a country whose elites accuse the SNP of exclusionary demagogy while English far right movements and their allies in the press call for immigrants to be denied welfare, rounded up, (or worse). It is a country where individual freedom means the freedom of the ruling class to acquire unspeakable wealth while thousands of people spend their nights sleeping on cold concrete and the unemployed are effectively reduced to economic serfdom. It is a country where the elitist proclivity to fawn on greed and bourgeois excess is matched only by a love of demonizing and degrading the extremely poor for sport.

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Scotland has been among the worst victims of this neoliberal shift. In spite of this, a majority of its people haven’t voted Tory in over 50 years and its political centre of gravity remains defiantly to the left of the British mainstream. Scottish nationalism may predate Britain’s ring wing cultural shift, but its aggressive reassertion – particularly among the young – can only be understood as a clarion call for social justice and solidarity in the face of their erosion by myopic Westminster elites.

This granted, we must hope that any result will persist in shaking Westminster out of its complacent neoliberal slumber. The Yes campaign has faced a predictable barrage from all manner of sources who have an economic stake in the current arrangements and yet maintains considerable momentum. The No campaign, for its part, finally realized it needed to articulate its own vision of social justice in order to prevail – as evidenced by Gordon Brown’s decidedly left wing speech in Glasgow on the campaign’s final day. If this whole episode is evidence of anything, it’s that only a decisive break from the political shackles imposed by neoliberal orthodoxy will galvanize large sectors of the public for change. In either case, the Labour Party must take note.

So whatever the result of tonight’s vote, here’s to a Britain that turns itself once again towards solidarity, equality, freedom, and social justice for the working people of all its kingdoms – United or otherwise.