The leader of Canada’s New Democratic Party (NDP), Jagmeet Singh, has announced that he will introduce new legislation targeting businesses with “excessive” CEO pay ratios with higher corporate income taxes.
The decision was announced in an April 18 news release, in which Singh said, “Over the last few months, we’ve seen Canadian families that are working hard and playing by the rules fall further and further behind…It’s really frustrating. But what makes it even worse for people is to see that while you’re trying to pay the bills, the richest CEOs are driving up prices and giving themselves huge raises, all while claiming to be ‘underpaid’.”
According to the release, Canada’s highest paid CEOs make 243 times more than the average Canadian worker. Pointing to an example, grocery retailer Loblaw’s CEO Galen Weston was cited as making 431 times what the average of its company employees make.
Singh’s legislation will be similar to the U.S. Senate Tax Excessive CEOs Pay Act, which plans to increase corporate income tax by 0.5% if the CEO pay ratio is between 50 and 100 times, 1% for 100 to 200, 2% for 200 to 300, 3% for 300 to 400, 4% for 400 to 500, and 5% for 500 and above.
The NDP noted that if this legislation had been in place in Canada in 2022, Loblaw would have paid up to CA$106 million more in corporate income tax.
Singh contended, “While Justin Trudeau sits by and pretends there isn’t an issue, because his friends are doing just fine and Pierre Poilievre works to tip the scales even more in favor of rich CEOs, the NDP is coming up with solutions.”
“We believe that Ottawa should be working for you – not for wealthy CEOs, and that’s why we’re working on this plan,” he concluded.
Insightia’s Compensation data reveal that U.S. CEOs made on average 164 times the average U.S. employee in 2022, according to disclosures as of April 20, 2023, up nearly 15% from 2021.