A stronger Team Canada starts with those most in need

On February 2, former Prime Minister Trudeau addressed Canadians with a message of unity: “I’m sure many of you are anxious, but I want you to know we are all in this together. The Canadian government, Canadian businesses, Canadian organized labour, Canadian civil society, Canada’s premiers, and tens of millions of Canadians from coast to coast to coast are aligned and united. This is Team Canada at its best.” 

All of Canada standing as one – businesses and workers, rich and poor – defending and reshaping our country. It’s a compelling vision.  

As we put our “elbows up” and prepare to go to the polls, we need to ask ourselves: What should our response look like if we are truly in this together? 

Together for whom?

People who are already struggling will suffer the most when the economic self-immolation of our neighbours to the south causes job losses and inflation here in Canada.  

Frontline organizations have direct experience in how our systems fail to uphold the human rights to food, housing, and an adequate standard of living. They are once more sounding the alarm and have put forward specific solutions, from permanent EI reform, to a grocery and essentials benefit, to rent and eviction freezes. These ideas have received little media attention, even as our national conversation has exploded with calls for reform in other areas. 

It is the immediate concerns of Canadian businesses that are capturing the most attention as they opportunistically advance an agenda of big subsidies and small government. The Business Council of Canada published a plan that would require sizeable new corporate subsidies and has proposed massive increases in defense spending to be paid for by cutting $90 billion in unnamed federal programs. Meanwhile, the top priority of the Canadian Federation of Independent Business is cutting taxes for their members.  

These actions are often framed as necessary for our industrial competitiveness and productivity, but it is our businesses that must bear considerable responsibility for Canada’s lackluster productivity growth. Many have insufficiently reinvested profits into improving and scaling operations, while others have sold too early in a corporate growth cycle so they can lock in their personal wealth.  

Stepping back, these arguments for a pro-business policy response rest on the fundamental assumption that if our industries and businesses are more profitable, then we’ll all be better off. In fact, recent history gives us good reason to doubt this is the case.  

Learning from the recent past 

It was just five years ago with the COVID-19 pandemic that we went through another shared economic shock that brought Canadians together, at least initially. When push came to shove, however, those with means showed little interest in chipping in to support Team Canada for the long term.    

At the onset of the pandemic, the federal government scrambled successfully to provide large-scale income security to affected companies and individuals. With the benefit of hindsight, some of our programs could have been smarter, but it proved that we have the tools and the know-how to drive down poverty rates, food insecurity, and core housing need across our society. For a while, we even dreamed of re-emerging stronger than when we started.  

But when offered the chance to create an economy and social safety net inclusive enough to leave no one behind and resilient enough to handle the next economic shock, we turned away. Doing more together requires asking those who can contribute to step up for Team Canada. They weren’t interested.   

Team Canada for the better-off only

This is not to say that the past few years haven’t seen attempts to share Canada’s prosperity more broadly. For example, the federal government briefly considered asking corporations to contribute more during the pandemic, as they did during the Second World War. Back then, corporate taxes were raised from 18 to 40 per cent, with an added tax of 75 to 100 per cent on excess profits. After all, no one should be profiting off a national emergency when we’re all in this together.  

During the pandemic, Canadian corporations saw their profits soar to fifty per cent above pre-pandemic levels, where they have remained ever since. The federal government responded with the watered-down Canada Recovery Dividend, which imposed a temporary tax increase only on banks and life insurers and at rates nowhere near historic levels. The Parliamentary Budget Office estimates this raised just $3 billion.  

The federal government tried again to raise revenues in the 2024 federal budget, announcing an increase in the capital gains inclusion rate that would generate nearly $20 billion over five years federally, and billions more provincially. The change would make our tax system more efficient and the costs would fall predominantly on the wealthiest Canadians. A year later, that plan is dead in the water, even as income inequality reached the highest level ever recorded in 2024.  

While low-income Canadians struggled to deal with inflation, corporations made record profits, and individuals with money to invest saw tremendous returns thanks to high interest rates. Despite this, corporations and wealthier individuals have continued to fight tooth-and-nail to avoid contributing more to Team Canada.  

What a better deal would look like 

Centring corporate interests today and hoping this will benefit everyone tomorrow is a failed strategy. Where there is a strong policy rationale for temporary subsidies or tax reductions, the costs should not be passed on to Canadians in the form of service cuts or long-term debt. Instead, we should require that any business supports are more than paid back over time in the form of permanently larger contributions to Team Canada. That’s what it should mean to be all in this together.

Similarly, when things go from bad to worse for those who are already struggling, we can’t turn away because we’re out of borrowing room. In a time of crisis, Canadians who are better off, including landlords in the private rental market, can afford to contribute more to Team Canada. That’s what it should mean to be all in this together.  

Prosperity from the bottom up 

Doing more to support those in greatest need is often portrayed as a tax that damages our competitiveness. This view ignores the benefits that accrue not only to the affected individuals but across our society. Poverty, homelessness, and food insecurity are not only violations of our human rights commitments, they also have multi-generational repercussions on our long-term productivity. This works through myriad channels, from poorer health, to lower education outcomes, to less willingness to take entrepreneurial risks. 

Just as investments in a new weapons industry leads to economic returns, investments in social programs make our economy stronger and often have tremendous long-term rates of return. Moreover, an extra dollar given to a corporation may simply pad its profits, while a dollar in the hands of a low-income Canadian is invested immediately back into the economy in the form of rent, food, and other necessities.  

If Team Canada could come together around one thing in this time of uncertainty, it should be that we don’t need to choose between investing in our economy or helping those in greatest need.