Time to share the wealth

Canadians are struggling to pay their bills, and many need help now. The government ought to tax away some of the enormous profits pouring into the energy companies and use that money to support those being hit hardest

Energy prices, as we all know, are through the roof and everyone’s feeling the pinch.

Well, not quite everyone. And no prize for guessing who the biggest winners are.

Yes, it’s the energy companies. They’re racking up record profits as the price of oil and gas soars for all the reasons we know — supply issues and the war in Ukraine.

In the first quarter of this year alone, the top five oil companies — Shell, ExxonMobile, BP, Chevron and ConocoPhillips — reported profits totalling $35 billion (U.S.) That’s a jump of more than 300 per cent over the first three months of last year.

It’s the same in Canada. Cenovus announced its biggest firstquarter profit ever — $1.6 billion. Last year the comparable figure was a mere $220 million.

Imperial Oil reported its best Q1 in 30 years, with net income of $1.17 billion. Canadian Natural Resources more than doubled first-quarter profit to $3.1 billion. For Suncor, the figure was $2.95 billion. That’s almost four times more than the $800 million it made in the first three months of 2021.

So the money’s been pouring in just as the rest of us face sticker shock at the pump and the cost of energy helps to drive prices for pretty much everything else higher and higher.

What, if anything, to do about it? Federal NDP Leader Jagmeet Singh, for one, has been urging the Trudeau government to do something that makes a lot of sense.

He wants Ottawa to impose an “excess profits tax” on the windfalls the energy companies are gathering at the moment, and use the money to help ordinary Canadians deal with the rising cost of living.

This is an idea well worth considering. There’s an active debate on exactly this point in Europe and the United States. The European Commission has recommended that member countries tax the energy companies’ windfall profits, and even some prominent Conservatives in Britain support the idea (Prime Minister Boris Johnson, however, has vetoed the idea there).

More to the point, the Trudeau government has already adopted the idea of an excess profits tax for another sector that did very well during the COVID-19 pandemic — the big banks and insurance companies.

In her April budget, Finance Minister Chrystia Freeland imposed a one-time 15-per-cent windfall levy on last year’s profits over $1 billion from Canada’s major financial institutions and raised their income tax rate from 15 to 16.5 per cent. That will bring in an extra $6.5 billion over the next five years.

The reasoning is that the government backstopped the financial sector through the pandemic with billions of tax dollars that kept incomes up and the banks’ customers solvent. They benefited from government support, and now it’s time to pay some back.

Naturally, the banks grumbled about being singled out. But as far as we can see, those big towers in downtown Toronto didn’t crumble. There was enough cash to both keep the banks humming along and help fill the treasury.

The energy companies are in a similar situation. They would no doubt argue that a windfall profits tax would discourage investment, transition to a greener economy, and so on. But there’s more than enough money to go around, quite literally. In Britain, a top executive of BP let slip a few months ago that high oil prices had turned the company into a “cash machine” and it didn’t know what to do with all the loot.

Canadians are struggling to pay their bills, and many need help now. The government ought to tax away some of the enormous profits pouring into the energy companies and use that money to support those being hit hardest.