When Carol Wilding, president and CEO of the Toronto Region Board of Trade, came before Toronto City Council’s Executive Committee last month and flatly rejected a suggestion that an increase in corporate tax could fund transit, I shook my head. “During these difficult economic times, you wouldn’t want to do that,” she cryptically replied. I shook my head once more. I don’t want to single Wilding out, as the “tax us at your peril” refrain from corporate types is very common, though it has rung hollow for years.

Corporations have never had it so good in Canada. Canada has emerged relatively unscathed from the recent global economic slowdown, boasting growth since 2009, unlike our G20 counterparts. Still, Canada and Ontario have reduced taxes on big business to skeletal levels with little or no economic stimulus to show for it. These corporate tax reductions are precisely why we cannot afford to pay for transit and infrastructure. They need to be reversed — and the additional revenue should be tied to transit expansion.

To put it in perspective, Canada has the eighth-lowest corporate taxes in the world. Compare that to the United States, which ranks 69th. A recent report from PricewaterhouseCoopers says corporations in Ontario benefit from a “generous” corporate tax regime. To reiterate, the word is “generous” — not adequate, not competitive, not favourable, but generous. When we are struggling to pay for transit, our “generous” corporate income tax rates should be first up for re-examination.

Since 2006, corporate tax gifts at the federal level have amounted to an estimated $60 billion in lost public revenue. The feds did this by reducing the corporate income tax rate from 22 per cent to 15 per cent. That is $60 billion not going to infrastructure or transit.

As mentioned, the province is not an innocent partner either. Corporations have enjoyed a 14-per-cent or lower corporate tax regime since the mid-90s. Since 2009, efforts were begun to reduce that to 10 per cent. Each per cent is estimated to bring in $1 billion in annual revenue. Today, Ontario’s corporate income tax rate is 11.5 per cent.

Adding it up, reductions in corporate income taxes rob our economy of $12.8 billion a year at the federal level and $2.5 billion to $4 billion a year (depending from when you measure) at the provincial level.

To put these amounts in perspective, the province is currently seeking $2 billion a year in additional funds from taxpayers through new levies, fees and taxes to pay for the next 25 years of transit expansion. But the money is already there, our senior levels of government simply choose not to raise it, opting instead to pass the political buck to cities, telling them to pick their poison.

The counter-argument is always the same: taxing big business will slow down the economy. This is false. Reports show that despite a decade of corporate tax reduction, corporations have simply banked the money instead of reinvesting it as was intended. Since 2008, an estimated $86 billion was added to corporate rainy day funds in Canada, proving that large firms did not need the money that our upper levels of government were so happy to give them.

Another counter-argument is that local businesses will suffer if we raise taxes. This is not about small or local businesses. There are special designations in the tax regime that give small businesses a special tax rate and encourage them to reinvest. Those rates should remain favourable.

This brings me to the question: How did we used to fund transit without asking individuals to open their wallets?

Downsview residents are lucky. We have billions of dollars in transit money currently being spent in and around our ward. We have a new subway extension running through Downsview up to Vaughan. We also have $1 billion in light rail coming to the area by 2019. This was all achieved without asking residents for a new levy or new taxes, though it did involve a difficult political battle.

So how did we do it? These projects were based on a philosophy that hearkens back to a time when we prioritized transit as a public good that benefitted all. Coincidentally, this was also a time when we asked corporations to pay more. If the government chose to reprioritize transit over corporate tax breaks, the discussion about what transit taxes to implement would be rendered unnecessary.

The fact is unavoidable: our “generous” corporate tax rates have offered little to no benefit to our economy while robbing us of dollars that could be used for transit. The province cannot continue to ignore this.

Leadership is not about passing the political buck to municipalities to make all the tough decisions. Normalizing corporate income tax rates back to competitive levels, not “generous” ones, would be a sign of provincial leadership that would not require any action from cities.

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Once that’s been done, maybe then you can go to the precariously employed, pensioners and other residents on fixed income, and ask them to pay more.