Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Cancel Anytime
Enjoy Unlimited Digital Access
Canada’s most-awarded
newsroom for a reason
Stay informed for a
lot less, cancel anytime
“Exemplary reporting on
COVID-19” – Herman L
$1.99
per week
for 24 weeks
Get full access to globeandmail.com
Just $1.99per week for the first 24weeks
Just $1.99per week for the first 24weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

The corporate headquarters of Pfizer Canada are seen on Nov. 9, 2020 in Montreal.

Ryan Remiorz/The Canadian Press

Pfizer Canada Inc. (PFE-N) is urging the Liberal government to cut or freeze corporate taxes and approve targeted tax breaks in the 2021 federal budget, while also criticizing Canada’s efforts to reduce tax avoidance by global multinationals.

The policy recommendations are outlined in a prebudget submission sent to the Commons Finance committee by Pfizer Canada, the domestic arm of the global pharmaceutical company that received the first Health Canada approval for a COVID-19 vaccine.

The company is in talks with the federal government over the supply of its vaccine.

Story continues below advertisement

Provinces ration COVID-19 vaccines ahead of Pfizer delivery slowdown

Canada to wait longer than Europe for Pfizer-BioNTech COVID-19 vaccine

Opposition parties want Pfizer, ministers to appear before Commons committee over drug regulation delay

In its prebudget submission, Pfizer notes that tax policies affect how multinational pharmaceutical companies decide where to locate production and research facilities and the associated high-paying jobs.

It asks the government to “maintain or reduce corporate income tax rates,” and enhance a tax credit for scientific research and development.

The company also said Canada is too aggressive in its scrutiny of transfer pricing, a practice in which multinational companies account for cross-border business activity within the parent company. This method can sometimes be used as a way to avoid taxes by shifting profits onto the books of subsidiaries in low-tax jurisdictions.

The practice is legal, but Canada and other members of the Organization for Economic Co-operation and Development (OECD) are discussing measures to ensure it is not used improperly.

“To retain and grow biopharmaceutical manufacturing and R&D activities in Canada, the tax regime must provide certainty and predictability in order to be effective as incentive for investments,” the company states. “Unfortunately, over the last decade, Canada has been viewed as a jurisdiction in which transfer pricing is systematically and aggressively challenged by the Canada Revenue Agency.”

The OECD has been negotiating for years on a new approach to taxing multinational corporations, particularly in the digital industry, and Finance Minister Chrystia Freeland announced in her fall update that Canada is prepared to act alone by Jan. 1, 2022, if no international deal is reached.

“The OECD’s current proposals regarding the taxation of the digital economy will almost assuredly, if they were to apply to the biopharmaceutical sector, introduce additional uncertainty for [multinational enterprises] and discourage them from maintaining or growing their activities in a country like Canada,” Pfizer Canada’s letter said.

Story continues below advertisement

The Finance committee will examine the seven-page document and nearly 800 other submissions as it produces recommendations for the 2021 budget. The letter was submitted in August, and posted online by the committee in late November.

Pfizer Canada director of corporate affairs Christina Antoniou said in an e-mail on Tuesday that the company’s budget recommendations do not come up during vaccine talks with federal officials.

“In fact, beyond the submission we provided, we have not had an opportunity to discuss our recommendations with the members of the Finance committee or anyone else,” she said.

Pfizer did not submit a prebudget report in recent years, Ms. Antoniou said, but “we felt it would be relevant” for 2021 to respond to the committee’s call for policy suggestions on restarting the economy after the pandemic.

Economist Toby Sanger, executive director of the advocacy group Canadians for Tax Fairness, said the timing of the company’s requests is a concern.

“Their recommendations are pretty aggressive and they’re frankly a bit disturbing considering the context that we’re in,” he said. “What’s disturbing is that they’re pushing for these recommendations at a time when they basically hold the cure [to COVID-19].”

Story continues below advertisement

Mr. Sanger took issue with Pfizer’s criticism of the CRA’s tax enforcement efforts with multinationals.

“Is this a veiled way to say back off on this?” he asked. “It’s not a gun to the head, but it’s a needle to the arms.”

Pfizer Canada also asked for a repeal or postponement of the planned 2024 phase-out of the Accelerated Investment Incentive for capital cost allowance rules, and a “reconsideration” of planned changes to the Patented Medicine Prices Review Board.

Ottawa recently decided to delay the changes to drug-pricing regulations by half a year. They were set to come into force in December and would adjust which countries the board uses to set a benchmark on drug prices and take into account a drug’s cost-effectiveness.

When asked on Friday whether the price-review board changes came up in their discussions with drug makers, Health Minister Patty Hajdu and Procurement Minister Anita Anand said no.

Opposition parties are now calling for the company and federal ministers to appear before the Commons health committee to explain the delay in the drug pricing changes.

Story continues below advertisement

Katherine Cuplinskas, a spokesperson for Ms. Freeland, said the government welcomes the work of the Finance committee and that the government will conduct its own prebudget consultations.

“We are committed to ensuring that everyone pays their fair share of tax,” she said in an e-mail.

Pfizer’s tax recommendations are contrary to those of the NDP, on which the minority Liberals often rely for support. With massive deficits looming because of the pandemic, the NDP is urging the government to consider tax increases for corporations.

NDP health critic Don Davies said the government needs to be far more transparent about what ministers agree to in their private meetings with vaccine manufacturers. He notes that Ottawa won’t release its contracts with vaccine manufacturers or say how much it is paying for vaccines.

“What I’m feeling is there is big lobbying going on behind closed doors by powerful, entrenched interests and almost a complete lack of transparency,” he said.

With a report from Kristy Kirkup

Story continues below advertisement

Know what is happening in the halls of power with the day’s top political headlines and commentary as selected by Globe editors (subscribers only). Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow the author of this article:

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

UPDATED: Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies