Human rights organisation Amnesty International Canada has warned that the Canadian government must not embrace a programme of “race-to-the-bottom” corporate tax cuts that threaten human rights and the environment.

The organisation made the statement in response to the Canadian government’s proposed “mega deduction” for corporations, announced at Prime Minister Mark Carney’s Canada Investment Summit earlier this week. 

If adopted, the changes would massively increase tax deductions businesses could claim for new investments in “capital assets”, such as buildings, vehicles, machinery, computer equipment and energy infrastructure.

The proposal includes add-on tax incentives for investments related to the production of liquefied natural gas (LNG).

Amnesty International Canada explains that LNG, derived from fracked methane gas, is a highly contested fossil fuel in Canada owing to its environmental and health impacts, greenwashing, violations of Indigenous Peoples’ rights, and mounting financial costs to taxpayers.

According to a Department of Finance Canada press release, the “mega deduction” programme is expected to cost the government $36-billion in tax revenue over five years. Amnesty International says these cuts would extract a steep price from Canadians.

“At a time when Canadians are struggling with sky-high housing costs, surging grocery bills and the fallout from one of the worst wildfire seasons on record, subsidising fossil-fuel and AI companies to the tune of billions of dollars would be an unmitigated disaster,” says Amnesty International Canada secretary general Ketty Nivyabandi.

“Providing massive, ‘race-to-the-bottom’ tax breaks to global investors keeps power and wealth flowing to the few while emptying the public purse. We urge the government to correct course and invest in change that puts people – especially those whose human rights are most at risk – and the environment first," Nivyabandi states.

For years, Amnesty International Canada has repeatedly urged Ottawa to stop subsidising fossil-fuel companies, whose activities accelerate climate change and expose local communities to toxic pollution and other harms. Meanwhile, the federal government under Carney has responded to US President Donald Trump’s economic attacks on Canada by encouraging the construction of new fossil-fuel infrastructure.

Amnesty International Canada is of the view that committing billions in public finance to fossil-fuel projects will lock the country into long-term dependency on a source of energy many countries are intentionally eschewing. Rather than pad the profit margins of oil-and-gas companies, Canada must invest aggressively in renewable-energy sources and tax the excess profits of companies capitalising on the surging cost of oil, the organisation says.

Earlier this year, Amnesty International Canada joined a growing list of more than 70 civil society organisations urging the government to tax the excess profits of oil companies raking in extra billions because of wars in the Middle East and Russia-Ukraine.

Revenue derived from taxing the excess profits of Canadian oil giants – who are set to net an estimated $90-billion this year – should be used to help residents offset rising living costs and to supercharge Canada’s transition to a green economy, Nivyabandi motivates.

“Canada’s leaders have already captured the world’s attention through their resolve in the face of Trump’s economic attacks and threats against our sovereignty, but we must go further. We can capture the world’s imagination by showing that a rapid transition to a greener, fairer economy based in human rights for all is not only possible, but well within our reach," Nivyabandi concludes.