Letting private equity buy law firms may stifle service, mobility | Bloomberg Law
By SCP Fellow Rachel Wasserman | Part of our Special Series: Always Canada. Never 51. | This post first appeared in Bloomberg Law
Rachel Wasserman of Wasserman Business Law says law firms should decentralize, not consolidate, to provide good service and keep lower overhead.
Private equity firms are quietly buying up and consolidating dental, accounting, medical, and veterinary practices, turning smaller independent firms into corporate chains. These firms offer professionals handsome payouts in exchange for ownership of their practice. Law firms are the final frontier for these consolidators. Recent developments in Arizona may finally give private equity the door into the legal industry that it’s been waiting for.
If we allow for private equity ownership of law firms, it isn’t unreasonable to expect a similar result as we are seeing in other professions—lower quality of service and work for clients and lower job satisfaction for lawyers. As these firms consolidate, it will be even harder for independent lawyers to compete against the economies of scale of these corporate behemoths.
In the longer term, this could mean less upward mobility for future generations of lawyers. It isn’t impossible for equity participation to disappear entirely if these corporate chains take over the market, which could also lead to the commodification of our profession. On the bright side, at least a handful of already rich partners and investors will have gotten even richer.
The scale advantage that once insulated big law is disappearing. Thanks to AI and legal technology, large-scale projects such as due diligence and discovery no longer require armies of associates. Boutique firms, with lower overhead and without the burden of luxury offices and top-heavy compensation structures, are now able to compete, offering sophisticated legal services at a fraction of the price. We don’t need investment capital or consolidation to make law firms more efficient—the future lies in decentralization.
Firm Ownership Matters
Legal regulatory bodies have largely prohibited nonlawyers from owning law firms, but these protections are starting to erode. Regulatory rollbacks often operate under the guise of altruism, purporting to promote access to justice. But maybe large multinationals and investors who have been shut out from this high-margin industry are just looking for access to more profits?
One example of this is the alternative business structure now permitted in Arizona. The regime still prohibits non-licensed attorneys from practicing law, but nonlawyers are now entitled to the economic interests and decision-making authority of law firms.
Nonlawyers having equity in a legal practice is a fantastic way to motivate non-legal professionals to deliver the best result for firm clients. But there is a significant difference between ownership in and control of a firm. Those in control dictate the firm’s values, performance expectations, and culture.
Once law firms are controlled by private equity, such firms will be required to juggle fiduciary duties to both their investors and their clients. Private equity’s interest in owning law firms is merely a means to an end. Whether it’s practicing law or manufacturing widgets, these firms seek out the most lucrative investment opportunities for their investors and themselves.
They don’t really care how the sausage gets made—as long as the sausages keep selling. Private equity firms are eager to capitalize on economies of scale through the consolidation of smaller practices, while also benefiting from the streamlined operations and reduced headcount enabled by adopting artificial intelligence.
Cautionary Tales
To understand the impact private equity ownership could have on the legal profession, we don’t have to look far. There are countless examples of PE firms’ impact on other professions that have already undergone significant PE consolidation.
A study published in the Journal of the American Veterinary Medical Association found that veterinarians working for large corporations reported more pressure to generate revenue than independent practices. An employee at two different corporate vets recounted that one of them had five price increases in one year, each between 3% and 6%, with no justification provided.
The cost for veterinary care outpaced general inflation by 2.7 times in the US last year. As the cost of care rapidly increases, many vets are now being forced to euthanize pets because the price for care has become out of reach for some clients.
Medical care also has suffered under private equity ownership. When private equity buys a hospital or physician practice, costs usually rise, as do the number of costly procedures and serious medical errors.
Sen. Sheldon Whitehouse (D-R.I.) went so far as to say “private equity has infected our health care system, putting patients, communities, and providers at risk” after a scathing bipartisan report on the subject was released earlier this year. In nursing homes, private equity ownership is associated with an 11% higher mortality rate and a 50% greater chance of being sedated, which reduces demands on staff and helps to lower labor costs.
Thinking law firms wouldn’t be faced with similar issues would be naive.
Lawyers are no more virtuous than the countless veterinarians, doctors, and other professionals who have sold their practices to investors. Many senior partners have already built immense personal wealth, and if private equity begins consolidating law firms, they’ll undoubtedly be enticed by the same kinds of lucrative offers that younger lawyers will be unable to match.
Protecting Our Professions
Clients come to us for independent, expert advice—not guidance shaped by firm profitability. We can’t allow the legal profession to be stripped of its integrity and independence in the name of efficiency and returns.
Lawyers must not only resist private equity control within our own profession—we must also stand alongside other professionals facing the same threat. Our skills, our judgment, and our commitment to the public trust are needed now more than ever.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Mark Carney passed a tough test in Washington. He now faces an even tougher one at home | Toronto Star
By Matthew Mendelsohn and Jon Shell | Part of our Special Series: Always Canada. Never 51. | This post first appeared in the Toronto Star
Prime Minister Mark Carney went to the White House last week to meet U.S. President Donald Trump. It was his first real test, and just about everyone agreed that he had passed. Carney was smart, funny and very Canadian, and he even seemed to disarm the president.
Now he faces a very different kind of test.
Sunoco, the energy giant based in Dallas and chaired by Trump ally Ray Washburne, is pushing to take over Alberta-based Parkland Corporation. The deal would bring together U.S. infrastructure and Canadian retail and refining assets to create the largest independent fuel distributor in the Americas — and it would be owned by an American company.
At this inflection point in Canadian history, where years of globalization and continental integration have come to an end, our “elbows up” approach is now coming face-to-face with real-world policy choices.
A transaction like the Sunoco deal would once have been a no-brainer: there’s a buyer offering a good price for a Canadian company, and if the board and shareholders approve, there should be no reason for the government to obstruct the deal. The market will produce value and the right outcomes.
But Canadians now have to decide how to navigate a new world, and we must ask ourselves whether we’ve learned the lessons of recent history.
Decades ago, Canada lost its mining leaders when Inco, Falconbridge and Alcan were bought by foreign giants. Now, instead of owning the world’s foremost mining companies and generating wealth in Canada, Canadians are working for foreign entities. This story has been well told.
Despite short-term benefits for shareholders, we know now that these deals robbed Canadians of their ability to build global firms. We also know that the era of taking free trade for granted is over — and that state power in the U.S. and elsewhere is being used more aggressively to protect national sovereignty.
It would be bad for Canadians to have an economy owned by others. It would be bad for Canadians to have merely a “branch plant” economy, one that doesn’t own or control its natural-resource companies.
We predicted earlier this year that American investors would soon look to buy up Canadian businesses and other assets, and we argued that it would threaten our national security and economic sovereignty. And here we are. Do we want to be owned by American billionaires, to work for them and have our wealth stripped away to pad bank accounts in New York and Dallas?
It’s hard to say no to predators, and doing so comes with risk. But we need to start saying no anyway. As the prime minister has said, Trump wants to weaken us in order to own us. Invasion is the least likely way for him to achieve that aim — it’s much easier to buy up Canadian assets.
In March, the government introduced changes to the Investment Canada Act to strengthen its ability to review foreign takeovers. Everything about our history tells us that the Sunoco deal is exactly the kind of foreign investment that would threaten Canada’s long-term economic competitiveness.
As the transaction awaits Canadian regulatory review, we must follow through on Minister of Innovation, Science and Industry François-Philippe Champagne’s commitment to “take action on transactions that could harm Canada’s national and economic security … and bring the foreign investment review regime in line with today’s reality.”
The government should kill the Sunoco deal through its review under the ICA. True, some shareholders would be deprived of a bump to their portfolios. But we are in the midst of an economic war, and we cannot further cede control of our infrastructure or accept more high-value talent leaving Canada for the United States.
In the Oval Office last week, the prime minister described Canadians to the president as the “owners of Canada” and said the country would never (never, never, never) be for sale. If we really want it to remain ours, then we need to think and act like it.
We have the tools. Now let’s deploy them to protect our sovereignty.
These Canadian millionaires are asking for tax increases—but just for themselves | CBC News
By | CBC News
A group of wealthy Canadians calling themselves “Patriotic Millionaires” is banding together to lobby governments to increase the amount of taxes they must pay, with a campaign patterned after similar movements in the United States and United Kingdom.
But there is already pushback on the concept — even before the group officially launches in Canada — with the opposing view being that higher taxes would drive entrepreneurship away from this country.
Speaking exclusively to CBC News in advance of the group’s Canadian launch, members of the Patriotic Millionaires say their organization is looking for broad changes to wealth taxes and capital gains in this country.
The group says it believes lower-income citizens often pay tax on much of their income, while wealthier investors can leverage dividends, investments and capital gains to change what they pay and how.
“Patriotic Millionaires, which started in the U.S., rapidly realized that this is an international issue,” said Claire Trottier, chair of the Canadian branch, in addition to her work as a businesswoman, investor and philanthropist in Montreal.
“Every country should be taking a look at the way that they design their tax system to try to ensure greater fairness across the system.”
The organization said it’s initially focusing on changing how Canadians think about taxing the wealthy, but is working to release research in early June on how it believes different wealth taxes across G7 nations could change government revenues.
An event planned for that month in Ottawa will push the idea that as the 2025 host nation for the G7 summit, Canada can encourage other nations to re-assess how wealthier citizens are taxed.
Changing taxation policy by lobbying new members of Parliament and a soon-to-be-announced finance minister is also an explicit goal of the organization, said Patriotic Millionaires Canada executive director Dylan Dusseault.
The organization wants to enable wealthier Canadians to be part of an “organizing, and lobbying campaign to change the public narrative and the law around tax fairness,” said Dusseault.
Even Trump might support higher wealth taxes
Further south, U.S. President Donald Trump has recently said he was “OK” with raising taxes on the wealthiest Americans in order to benefit people in middle- and lower-income brackets.
“I would love to do it, frankly,” he said in the Oval Office on Friday. He says he would be willing to pay more in taxes himself.
However, the U.S. House of Representatives Speaker Mike Johnson and other top Republicans have resisted the idea of raising taxes on the wealthy.
The president told Johnson this past week that he wanted to see a higher tax rate on incomes of $2.5 million for single filers, or $5 million for couples, only to sort of back off the idea on Friday. “Republicans should probably not do it, but I’m OK if they do,” Trump wrote on social media.
But Trump’s verbal — if loose — support of increasing tax on the rich didn’t actually surprise Patriotic Millionaires Canada.
“[Trump] and his rich friends don’t pay income tax because they don’t declare income. It’s just one more sign of the problems with the tax system in the U.S. that are mirrored in Canada,” said Dusseault.
Meanwhile, group member Avi Bryant, who now lives on B.C.’s Galiano Island, founded a Canadian tech company that was sold to Twitter in 2010 and says the bulk of his family’s wealth comes from that work in the Silicon Valley tech sector. He says he believes higher taxes for the wealthy can maintain Canada as a desirable location to both live and work.
“If we want thriving businesses with knowledge work, like tech startups, [we need] to be a nice place to live. Taxation and redistribution and good social services help a great deal with that,” said Bryant.
New government to lobby
The recently victorious federal Liberal Party’s platform includes tax changes focused on increasing tax penalties and fines through the Canada Revenue Agency (CRA), promising revenues of $3.8 billion over four years.
It also promised a tax cut to the lowest marginal tax rate, which could be interpreted as a tax cut for many — if not all — Canadians earning income.
Only the NDP, who were not able to retain official party status in the election, promised a tax increase on what that part labelled the “super rich.”
“Why is it that we’re paying less taxes than the people who are actually working for a paycheck… your teachers, your nurses,” said Patriotic Millionaires group member Sabina Vohra-Miller, who splits time between California and Toronto with her spouse Craig Miller, former chief product officer at Shopify.
Specifically, one goal of the organization as it launches will be to encourage the federal government to re-attempt a functional increase in how much wealthier Canadians would pay in capital gains tax.
That policy announcement triggered opposition when first announced earlier in 2024. The finance minister at the time, Chrystia Freeland, said it was intended to address what she called issues of tax fairness.
Groups such as the Calgary Chamber of Commerce had said the changes to capital gains, which would primarily have hit wealthier Canadians, were a “negative signal for investment.”
In the end, the capital gains changes were implemented, then delayed by the Liberals under Justin Trudeau. They were then fully cancelled by Prime Minister Mark Carney. Conservatives were also against the tax increase.
Anti-tax anxiety in current climate
The principle of increasing taxes that primarily target the wealthy elicited a fiery reaction from a venture capitalist in Canada.
“If you want to use tax policy, you tax the things that you don’t want,” said John Ruffolo, the founder of Maverix Private Equity and vice-chair of the Council of Canadian Innovators, a group that referred to the now-cancelled capital gains tax changes as “bad policy.”
“You don’t want wealthy people, you don’t want capital, you don’t want entrepreneurship. Is that what we’re saying? Is that what you really want?” said Ruffolo.
A Canadian expert in taxation points out that weaker economic indicators in Canada, along with anxiety around relations with the U.S., could mean that politicians will be very cautious to respond to lobbying efforts to increase taxes.
“I think there’s anxiety about doing anything that might signal anything that would cause people with money to think, Oh, well, Canada is not a good place,” said David Duff, director of the Tax LLM (Master of Laws) program at the Peter A. Allard School of Law at the University of British Columbia.
“We’re also in an environment where a sort of an anti-tax agenda has become politically more dominant,” he said, an observation in keeping with both major Canadian federal parties explicitly indicating they would not support the previous increase in capital gains inclusion rates.
Duff pointed out that increasing taxes on the wealthy may not generate earth-shattering revenue for Canadian governments, but can be a symbolic statement.
“In many cases, these are people who have benefited from a Canadian society and economy that’s allowed them to earn or inherit significant fortunes.
“The downside, in my experience over 30 years of doing tax, is generally highly overblown … dire economic consequences from any kind of additional taxes,” he said.
Duff also pointed out that while higher taxes may lead Canadians to try and hide their taxes through loopholes, if that was easily done, those subject to higher levies “wouldn’t get so upset about raising taxes.”
Donations aren’t good enough: millionaire
The idea that donations and philanthropy are an alternative to mandatory wealth taxes is mentioned by both proponents and opponents of the lobby group.
“It’s just not enough to wait for people to make the proactive decision to give away their money and also trust that they’re going to give away their money to these different priorities,” said Trottier, who is involved with multiple philanthropic organizations including a family foundation that pledges hundreds of millions of dollars.
On the flip side, opponents say they should not be forced — through taxation — to fund those priorities, especially if they must give up control over how the money is used to governments.
“If you feel so passionately about it, nothing stops you from giving it all the way, nothing,” said Ruffolo, who said he fundamentally believes in giving his money away.
“But I will decide I will decide who gets it and why,” he added, pointing out that Warren Buffett is planning to do the same with his fortune.The philanthropist and billionaire Buffett, 94, has announced he will retire at the end of this year and had previously said on his death he’ll donate 99.5 per cent of his remaining wealth to a charitable trust.
Tech billionaire Bill Gates has made a similar pledge, saying he will donate 99 per cent of his remaining tech fortune to the Gates Foundation, worth an estimated $107 billion US.
However, Patriotic Millionaires chair Trottier feels there is a stronger issue at play: that taxation must be used to address the growing gap between the rich and poor in Canada, rather than through select causes supported by choice.
The gap between the disposable income of the wealthiest and poorest groups of Canadians hit the widest gap in 2024 since Statistics Canada first starting collecting data in 1999.
The widening gap was pinned, at the time, on investment gains — something Patriotic Millionaires Canada wants to see taxed differently in this country
“Are we going to recognize that massive growing runaway wealth inequality is a danger to democracy?” Trottier said.
Canada's Liberal party will face down Trump. But will it address inequality? | Truthout
By Nora Loreto | Part of our Special Series: Always Canada. Never 51. | This post first appeared in Truthout
Canada entered the 2025 federal election with a Liberal minority government and it emerged from the 2025 federal election with a Liberal minority government. The outcome is shocking, given that Conservative leader Pierre Poilievre had been riding the top of the polls since the end of 2023.
Liberal leader Mark Carney now has a monumental task to lead Canadians through the turmoil of a second Donald Trump term, while also addressing various crises: affordability, housing, toxic drugs and health care, to name a few.
While these crises loomed over the election, one fundamental cause was never clearly identified: concentrated corporate power.
Polls showed that Canadians were concerned about finances, the economy and the cost of living just as, or more than, than Canada-U.S. relations.
And yet, each of the parties talked more about the need to help corporations rather than limit their reach. Now, Canada’s prime minister is a man who has been the top banker at not one, but two central banks, and the chairman of one of Canada’s largest asset management companies, Brookfield Asset Management.
“During crises, corporations have the power to just raise profits at everyone else’s expense,” explains Silas Xuereb, research and policy analyst with the nonprofit group Canadians for Tax Fairness. Xuereb points to the fact that during the first years of the pandemic, corporations raised their prices with very little pushback from the Liberal government. The result was profiteering the likes of which Canada has never seen before.
Trudeau’s Liberals didn’t try to reign in corporate profiteering, instead actually backtracking on the one measure that they had promised to implement — lowering the amount of profits that are sheltered from tax when a person or a business makes a large sale, called the capital gains inclusion rate.
As a result, corporate profits in 2022 were higher than in any other year in the history of Canada, at $685 billion — Canadians had never before witnessed profits as high. While profits dipped slightly in the following years — by 3 percent in 2023 — they still remained record-high.
In 2023, real estate and education, health and social assistance services had the largest profit margins, surpassing 25 percent, and oil and gas made the largest jump to reach nearly 20 percent from -11 percent. Real estate represents 40 percent of Canada’s GDP, higher than any other G7 nation. Real estate is big business for investors, which drives Canada’s housing affordability crisis.
Xuereb points to the fact that Canada’s tax laws allow corporations to reinvest their profits without being subject to tax. That means that what is left over is all that is taxed, and therefore, wealth is increasingly concentrated in the hands of stockholders and doesn’t go toward creating jobs. “When we cut corporate taxes, corporations end up with more profits left over to give back to their wealthy shareholders,” he says.
The flip side of these profits is record-high and growing income inequality. One analysis from 2024 calculated that where the richest 20 percent of Canadians owned 67.7 percent of total wealth in 2023, the poorest 40 percent of Canadians owned just 2.7 percent of Canada’s total wealth. In monetary terms, where the wealthiest households hold $3.3 million, on average, lower income households hold just $67,038 on average.
Skyrocketing corporate wealth barely registered as an issue to debate during the election campaign. Instead, the parties all promised various tax measures that targeted personal income taxes rather than corporate profits.
The Conservatives’ campaign focused on eliminating several tax measures, which gave the Liberals a lot of space to promise a more balanced approach to taxation. Instead, they vowed to cut taxes as well. It was Carney’s first promise, something that the Liberals said would “keep more of what they earn and build a stronger Canada in the face of President Trump’s tariffs.” The proposed income tax cut would save the average middle and upper income household $300, and cost the state $22 billion over four years.
The Liberals also promised corporations the ability to shelter even more of their profits from taxes, both by maintaining the capital gains inclusion rate and by lowering corporate income tax rates if corporations reinvest profits either in Canada or abroad.
Despite the fact that Canadians said they were worried about the affordability crisis, ultimately, they did not vote for the two parties that did make very modest promises to tax wealthy Canadians more: both left-leaning parties, the Greens and the New Democratic Party, were decimated, and the latter didn’t elect enough people to hold party status. The Liberals increased their percentage of the popular vote by 10.9 percent, and the Conservatives increased theirs by 7.6 percent.
Under Carney, Xuereb warns that Canadians should expect more of the same.
“I don’t think there will be any huge changes to corporate taxation or really the taxation system in general,” Xuereb told Truthout. “I’m sure he will implement some tax breaks around the edges for corporations, which will just allow corporations to send more money to their wealthy shareholders. A status quo policy in this area is continuing a status quo that is already benefiting the wealthy and allowing billionaires to accumulate billions of wealth on the backs of working people.”
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This article originally appeared in Truthout. It is republished here under a Creative Commons license.
School meals aren’t just good for kids: they can also be good for industry
By SCP Fellow Sarah Doyle and SCP Advisor Alex Himelfarb | Part of our Special Series: Always Canada. Never 51.
Canada’s National School Food Policy has the potential to significantly improve learning and life outcomes for hundreds of thousands of children. It could also benefit Canada’s agrifood industries and serve as a model of how to integrate economic, social and environmental objectives.
Every province and territory and parties across the spectrum have signed on, with good reason. Until this year, Canada was the only G7 country and one of the few in the OECD without a national school meals program. The benefits are well documented: children’s health, school attendance and scholastic achievement improve; dropout rates, socioeconomic inequality, food insecurity and pressure on household budgets go down.
What we have not yet fully exploited, however, is its potential to contribute to a more robust and sustainable agrifood sector.
In the face of U.S. threats, Canadian governments have rightly adopted procurement policies that give preference to Canadian businesses. Prime Minister Carney, in his party’s election platform, emphasized the imperative of directing government purchasing power to buy Canadian—specifically proposing to do so through the National School Food Policy. These policies open the door to a more strategic approach to food procurement—one that shifts the focus from minimizing price to maximizing public value.
Getting food procurement right is particularly consequential now, as Canadian governments work to build a more resilient, less dependent economy. Canada’s agrifood businesses—responsible for about 1 in 9 jobs and 7% of GDP—are grappling with escalating trade tensions with China and the U.S., which respectively account for 14% and over 60% of Canada’s agrifood exports.
Specifically, governments could require a minimum percentage of school meals procurement budgets to be spent on healthy food that is grown and made in Canada, with incentives for suppliers to adopt sustainable practices and decent work standards. Support could be made available to businesses that are willing to transform to improve nutrition, sustainability and labour standards, with smaller suppliers receiving additional support to help them compete for contracts against larger incumbents.
This is not uncharted territory. Brazil’s National School Feeding Program requires at least 30% of federal funding for school meals to be used to procure from family farms, with priority given to local and Indigenous farmers, and to those who adopt sustainable land use practices. This program contributes to creating more sustainable value chains for food and nutrition security—one of six “missions” in Brazil’s industrial policy.
The patchwork nature of Canada’s School Food Policy is unlikely to offer much of a boost to industry. But it is not too late to negotiate a coordinated, national approach that reconciles flexibility with solidarity. Governments should identify procurement criteria that transcend provincial and territorial barriers, complemented by mechanisms for pooled procurement and advanced purchasing agreements for certain products, enhancing market certainty for businesses.
A national agreement could apply to all public food procurement, including in schools, hospitals and programs for northern and remote communities, building on sophisticated local procurement approaches that already exist. Such an agreement would reflect the collaborative approach to federalism that all parties are calling for to weather the impacts of U.S. aggression. Failing a national approach, willing governments could move forward together with agreed targets and principles.
Canada’s School Food Policy commits the federal government to spend $1B over five years on top of existing provincial, territorial and municipal funding and to work towards universal access. The benefits to children make this a worthy investment, but the return on investment could be greater. Clearly school meals are good social policy, but if school meal procurement is leveraged as an instrument of inclusive and green industrial strategy, they could be good economic policy as well.
Orienting procurement around the challenge of providing sustainable, healthy meals that are grown and made in Canada could stimulate innovation across the value chain, driving investment in potential growth areas like plant protein and greenhouse production, and providing a path to scale for made-in-Canada innovations like Growcer’s modular vertical farms. A strategic approach to food procurement could work in concert with, and augment, other tools of industrial strategy, such as government support for agrifood research and development, infrastructure, concessionary financing and supply-chain adaptation.
Scaling up access to school meals is a big win for children and families. It could also be a win for agrifood businesses, the climate and workers, contributing to a more resilient, just, sustainable and less dependent Canadian economy—but only if Canada’s newly elected government takes an ambitious, collaborative approach to how food is procured.
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Sarah Doyle is Policy Fellow at the UCL Institute for Innovation and Public Purpose and a Fellow at Social Capital Partners and Alex Himelfarb is former Clerk of the Privy Council and Fellow at the Broadbent and Parkland Institutes.
Watch the video: Unleashing Canada’s potential in turbulent times | Canada Growth Summit 2025
A Quick Start Plan to Double Down on Investment
Panel discussion: Here’s how global experts suggest we can accelerate investment to drive economic growth and create a sustainable, prosperous environment.
Thursday, April 24, 2025
10:15 a.m.
Fairmont Royal York
100 Front Street West, Toronto, ON M5J 1E3
Panelists
Matthew Mendelsohn
CEO, Social Capital Partners
Michelle Harradence
Executive Vice-President and President, Gas Distribution & Storage, Enbridge
Peter Tertzakian
Founder, ARC Energy Research Institute
Moderator
Luiza Ch. Savage
Executive Editor, POLITICO
#HIRING Visionary Founding CEO to lead the Canadian Tax Observatory
What is the Canadian Tax Observatory:
The Canadian Tax Observatory (the “Observatory”) is a newly established non-partisan, non-profit organization committed to confronting wealth inequality through transformative tax policy. Our mission is to support a more equitable tax system that advances shared prosperity and economic growth through rigorous research, collaboration, advocacy and public education.
Why are we launching the Canadian Tax Observatory?
Highly unequal societies are not compatible with democratic governance. They are too unstable and vulnerable to the erosion of democratic norms. Democratic capitalism requires well-regulated markets, real opportunities for people to build economic security, and fair taxation. Today’s tax debate is shaped by wealthy interests and the organizations and lobbyists they support. Tax policy is increasingly structured to benefit the wealthy. Misleading stories about the tax system abound and are pushing Canada to accept rising inequality and wealth concentration as the price of economic growth. We want to correct this.
What we aim to achieve:
The Canadian Tax Observatory will be a catalyst to confront wealth inequality in Canada. We aim to reshape Canada’s tax landscape by delivering evidence-based analysis and workable options that will promote a more equitable and growth-oriented tax system. Confronting growing wealth concentration requires a full range of policy and legislative solutions, including tax reform.
Our journey thus far:
We are in the foundational stages of building this organization: we have incorporated as a nonprofit and are in the process of registering as a charity. The Observatory is currently incubated by Social Capital Partners, a nonprofit organization that provides robust governance, administrative and operational backing during this transitional period. We have thus far secured initial seed funding of roughly $550,000 per year for the first three years and are actively developing funding partnerships with other organizations. We are ready for a leader who can shape and grow the Observatory into a permanent, nationally recognized Canadian institution.
The leader we’re seeking:
We are searching for a visionary—a Founding CEO who sees beyond conventional boundaries. This person is innovative, strategic, deeply committed to social justice and capable of engaging diverse stakeholders, ranging from civil society to academic experts, industry stakeholders and government leaders. The ideal candidate will possess:
- Exceptional strategic vision with the ability to translate ideas into actionable policy solutions.
- A proven track record in organizational leadership, fundraising, and building influential partnerships.
- Credibility and expertise in economic and tax policy, preferably with a focus on Canadian public policy.
- Powerful communication skills to inspire, educate, and advocate across varied audiences, along with comfort engaging with the public, decision-makers and expert policy networks.
- An ambitious, entrepreneurial spirit eager to build and sustain an impactful, lasting institution that will have a transformative impact in Canada on the sustainability of democratic capitalism.
Position Details
- Type: Full-time permanent.
- Location: Remote within Canada – option to work out of SCP’s Toronto office if desirable.
- Compensation: $175-275,000/annum. The salary range is wide to accommodate various potential operating models and scopes of the role. We are open to honest discussions around compensation.
- Benefits: Competitive benefits package.
- Vacation: To be discussed and determined by the founding board and CEO.
Your application – an invitation to dream big:
We invite you to craft and submit a letter of no more than three (3) pages outlining how you would build and lead the Canadian Tax Observatory. Your letter should clearly state your vision for the Observatory and how you plan to bring this vision to life.
We are committed to adapting the Observatory’s operating structure to support the leadership model best suited to the chosen Founding CEO. All candidates should feel comfortable reaching out to us for a preliminary conversation to help determine their suitability for the role or to ask any clarifying questions.
Please submit your letter of no more than three (3) pages, along with your CV (including a list of your relevant publications), to careers@socialcapitalpartners.ca by June 4, 2025. As applications will be reviewed as they are submitted, we encourage all interested individuals to submit their application package as soon as possible.
Next steps:
Selected candidates will be invited to present their vision to our founding board and key stakeholders and will be compensated for their time. Our goal is to appoint our Founding CEO as soon as possible to promptly begin laying the groundwork for the Observatory’s next steps.
We are excited to learn about your bold vision for building this new Canadian institution—a beacon for economic fairness, sustainable economic growth and a thriving democracy.
Together, let’s redefine what’s possible for Canada.
Watch the video: Is Canada really poorer than Alabama?
Corporate leaders are obsessing over GDP per capita. But if you look at just about any number that would meaningfully tell you how well our economy is doing, Canada does better than the U.S. So, when corporate leaders speak glowingly of the American economic model, and how great it would be if Canada could be more like the U.S., it is worth asking: which aspect of that mess do they really want to replicate here? And how would that be good for Canadians?
Ten ways to unleash Canada’s potential | Public Policy Forum
By Deborah Aarts | Public Policy Forum
Public Policy Forum’s Canada Growth Summit 2025 gathered some of Canada’s top leaders and policy minds. Here are some of their biggest and brightest ideas.
No Canadian has any doubt of the magnitude of this economic moment. As U.S. President Donald Trump’s mercurial tariff mandate unleashes market mayhem and geopolitical unease, Canadians have galvanized — buying local, putting the maple leaf on everything, ratcheting our elbows way up.
Which may explain the pronounced air of intent at the Public Policy Forum’s 2025 Canada Growth Summit, which took place this week at Toronto’s Royal York Hotel. Over the course of a dozen sessions, more than 40 speakers put forward a series of smart, actionable ideas for how governments, businesses, policymakers and communities can work together to advance our collective fortune.
There was plenty of debate — when isn’t there when you put more than 400 heavily caffeinated wonks, politicians and businesspeople in the same room? — but as the day unfolded, a few themes emerged. This is a moment for pragmatic clarity, not wishful thinking; for focus, not blue-sky experimentation. It’s a time to, finally, activate our long-lamented untapped economic potential.
Here are 10 of the day’s best ideas to make that happen, including reflections from SCP’s CEO Matthew Mendelsohn on the role of policy in attracting business investment in Canada.
The misleading use of per capita GDP: Numerators, denominators and living standards | Policy Options
By Jim Stanford | Part of our Special Series: Always Canada. Never 51. | This post first appeared in Policy Options.
Some political and business commentators argue Canada experienced a lost decade of subpar economic performance even before U.S. President Donald Trump’s erratic trade actions cast their shadow. The most common evidence presented for this pessimistic judgment is a comparison of Canada’s per capita GDP to the U.S. and other industrial countries.
To be sure, Canada’s economy has traversed many challenges in recent years, including a global pandemic and subsequent inflation. Many features of the economy need to be strengthened. But for several reasons, it is misleading to use per capita GDP to grade Canada’s overall economic performance or, as it often is used, as a proxy for measuring living standards.
Per capita GDP is a simple ratio of the total value of goods and services produced for money in an economy divided by that jurisdiction’s population. The math sounds easy. But the methodology is complicated. Equating average output per person with the standard of living in a country is not credible.
Per capita GDP has a numerator (GDP) and a denominator (population). Canada’s numerator has not performed badly by international standards. Real GDP growth over the past decade averaged close to two per cent per year, despite a shallow recession in 2015 and a bigger downturn during the COVID-19 pandemic. That’s the second fastest among G7 economies, behind only the U.S.
It’s the denominator, therefore, that explains Canada’s seemingly poor performance by this measure. GDP has grown but not as fast as the population. Indeed, in recent years, Canada has had its fastest population growth since the 1950s. The population grew three per cent in each of 2023 and 2024, almost entirely due to immigrants – two thirds of whom were non-permanent arrivals (on temporary work or student visas).
Economic averages diluted by immigration
There is much to debate about the appropriate pace of this and the federal government has recently curtailed non-permanent immigration. But the impact of rapid population growth on an arbitrary statistical ratio hardly proves a broader economic failure.
The link between immigration and GDP is indirect and felt with a time lag. We do not expect the arrival of new Canadians to immediately boost GDP in the same proportion as the existing population for many reasons. It takes time to find work, gain skills and develop productivity.
Any surge in immigration will normally result in lower average per capita GDP, but that doesn’t mean Canada’s previous residents suddenly became poorer.
It simply means that Canada is absorbing new people to lay the groundwork for future expansion. The resulting decline in per capita GDP cannot be interpreted as evidence of a more general malaise.
It is also worth noting that many of the business voices now bemoaning Canada’s per capita GDP performance were the same voices demanding more access to temporary foreign labour after COVID-19 (to solve purported labour shortages and reduce wage pressures). It’s contradictory for them to now complain about poor GDP per capita resulting precisely from the temporary immigration they demanded.
GDP itself – the numerator of the ratio – encounters numerous conceptual and methodological questions, casting further doubt on its validity as a measure of living standards. GDP includes many components that have no direct bearing on the quality of life, such as depreciation, real estate commissions and imputed rents on housing.
It is tricky to measure real GDP over time and even trickier to compare it across countries, different currencies and different prices.
Moreover, simple per capita averages ignore how GDP is distributed. Only about half of GDP is paid to workers. Much is captured in profits and investment income, disproportionately concentrated at the top of the income ladder. Very high incomes for a rich elite can pull up average GDP per capita figures, even when most members of a society face hardship.
International comparisons confirm the perils of evaluating economic performance by GDP per capita. The top four countries on the International Monetary Fund’s per capita GDP ranking are all tax havens: Luxembourg, Switzerland, Ireland and Singapore. A fifth, Liechtenstein, is not included due to incomplete data, but its GDP per capita (US$186,000) is the highest of all – helped by the fact its population is just 40,000.
These countries receive inflows of profits from global companies lured by low corporate taxes and lax banking rules. Those inflows boost GDP per capita (with profits credited to local subsidiaries of those global firms), but have little impact on work, production or living standards.
The Irish example
The Irish case is instructive. Ireland has recorded the fastest growth of real GDP per capita of any OECD country over the last decade and its GDP per capita is purportedly twice Canada’s. Ireland is a wonderful, fascinating place. But any visitor can immediately confirm it is not rich. Average living standards (evidenced by wages, housing, health and poverty) are no higher and, by some measures lower, than Canada’s.
Because Ireland’s corporate tax rate is lower than other European Union countries, global multinationals have established Irish subsidiaries to receive intracorporate transfers. In 2023, more than half of all net value added in Ireland consisted of business profits – two thirds of which belonged to foreign firms.
GDP per capita has soared but living standards have not. Because the whole model is driven by corporate tax avoidance, the Irish government’s ability to capture some of that largesse for domestic use is constrained.
The vagaries of per capita thinking are equally visible in Canada. Consider Newfoundland and Labrador. After the development of offshore oil resources in the 1990s, that province’s GDP grew rapidly. Some of the new wealth trickled down to residents, but not as much as might be assumed.
By 2006, per capita GDP in Newfoundland and Labrador exceeded the Canadian average. Its new status as a “have” province was significant beyond provincial pride. It meant that Newfoundland and Labrador soon stopped receiving federal equalization payments.
However, personal incomes in the province remained below national averages. Over the latest five years, Newfoundland and Labrador’s GDP per capita was 6.1 per cent higher than the Canadian average, yet personal income per capita (including government transfer programs) was 3.4 per cent lower.
Exacerbating this anomaly, Newfoundland and Labrador’s population shrank through the 2000s. Population decline is negative for any economy, but it has the perverse effect of artificially boosting GDP per capita (by shrinking the denominator). This further eroded the province’s chances of receiving equalization.
Much of the GDP associated with offshore oil literally never touches ground in the province. It is shipped overseas by tanker, with most of the profits appropriated by petroleum firms headquartered on the mainland or in other countries. Because of this, the province’s GDP is skewed heavily toward corporate profit. That’s good for business but doesn’t enrich its residents.
Little wonder then that the province is challenging the federal equalization formula in court. Last year, shrinking oil revenues pushed the province’s GDP per capita back slightly below the Canadian average, so Newfoundland and Labrador will now receive (small) equalization payments once again. But this experience confirms per capita GDP is no way to measure the true well-being of a province or a country.
The goal of economic policy is not to maximize an abstract statistic. It should be to enhance the well-being of people. Per capita GDP is not an accurate or reliable measure of progress toward that goal.
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This is part 1 of a 2-part analysis. In part 2, Jim Stanford evaluates per capita GDP comparisons between Canada and the U.S. This article originally appeared in Policy Options. It is republished here under a Creative Commons license.
🎥 Plus, view Social Capital Partners’ video: Is Canada really poorer than Alabama?