MEI Counters CCPA Wage Gap Findings

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    The gap between the remuneration of the 100 highest paid CEOs in Canada and the average salary in Canada has reached a point that justifies greater wealth redistribution, says a report from the Canadian Centre for Policy Alternatives (CCPA). It says by January 2 these CEOs had pocketed the equivalent of the average annual salary in Canada. By increasing income tax rates and limiting deductions, the CCPA claims that governments could use these additional revenues to finance public services that would benefit the population. However, the Montreal Economic Institute (MEI) says if the total remuneration of these CEOs some $921 million, were entirely confiscated, this would represent just 0.13 per cent of the overall revenues of governments in Canada. Assuming that these CEOs would continue to perform their duties without getting paid, their salaries would be entirely spent by governments by 10:37 a.m. on the first day of the year. “There is a legitimate debate to be had regarding the remuneration of the CEOs of large corporations. But it has to do with corporate governance and the ability of shareholders to have their point of view on the topic properly reflected in the decisions of boards of directors,” says Michel Kelly-Gagnon, president and CEO of the MEI. In addition to being an ineffective means of increasing government revenues, high tax rates hinder wealth creation and wealth creation is something that actually contributes to everyone’s standard of living. “Dangling the prospect of being able to pay for a multitude of social programs just by excessively taxing the salaries of the CEOs of large corporations, as some do, is simply mistaken,” says Kelly-Gagnon. “It serves only to stoke people’s envy and contributes nothing constructive to serious discussions of public policy.”