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TORONTO — Canada is tightening rules, increasing international co-operation, and stepping up collaboration with the provinces to make sure that companies and individuals all pay their fair share of income tax, the federal finance minister says.

Bill Morneau brought his plans for more tax fairness to a lunch crowd of about 75 at the Toronto Region Board of Trade on Thursday.

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Morneau said that right now some Canadians are exploiting tax loopholes to pay less tax. He gave the example of two neighbours who each do well and earn $220,000 a year.

The first neighbour declares his income and pays about $80,000 in tax, Morneau said. The second neighbour owns a private corporation and “sprinkles” their income among themselves, their spouse and an adult child.

“In cases where the spouse or child have no role in the business, suddenly your neighbour is paying roughly $30,000 less tax than you do,” Morneau said. “We see no good reason for that.”