'Alternate budget' proposes tax on wealthy

The richest Canadians and corporations should pay more tax to help fill up federal coffers, according to an alternative budget released Tuesday by a think tank.

The Canadian Centre for Policy Alternatives proposes a number of tax reforms and other measures in its annual Alternative Federal Budget report, that it says relate to what matters most to Canadians: post-recession job and household debt worries, pensions, income inequality and climate change.

The think tank clearly disapproves of Prime Minister Stephen Harper's spending choices billions of dollars on a new fleet of F-35 fighter jets and expanding prisons, for example and it says Canada's social safety net needs investments.

"Instead of addressing the fragile nature of Canada's job market, we have a federal government fixated on high-priced security purchases such as fighter jets and new jails, along with maintaining expensive corporate tax cuts with questionable job creation benefits," said David Macdonald, coordinator of the report for the CCPA, at a news conference in Ottawa.

"With so much at stake for the financial security of the country, now isn't the time to 'stay the course' or waste money on corporate tax cuts for the most profitable companies in Canada. Canadians are being taken in a direction that bolsters military and prison security spending but that does nothing to secure Canadians' future prosperity."

The federal budget is set to be delivered by Finance Minister Jim Flaherty on March 22. If the Conservatives don't get the support of at least one opposition party to pass it, an election could be triggered and corporate tax cuts will be a major campaign issue.

The latest corporate tax rate reduction was introduced in January, bringing the rate down to 16.5 per cent from 18 per cent. Next January it is set to drop again to 15 per cent. The opposition parties are opposed to these reductions, and the CCPA's alternative budget also backs their call for the rate to be raised back up to previous levels. The think tank suggests it be raised to 21 per cent.

It also proposes introducing a "legacy tax" on the country's richest citizens to raise millions of dollars of revenue. It suggests adding a fifth tax bracket that would mean a 35 per cent income tax on incomes over $750,000. The organization says that tax rate would add $1.2 billion annually to Ottawa's bank account.

"We are calling today on profitable corporations and Canada's richest citizens to play their part in securing Canada's economic future and prosperity," said another CCPA member behind the report.

The group also calls on the Conservative government to continue stimulus spending on infrastructure projects.