Finance Minister Flaherty has hinted that tax cuts will be part of the fiscal stimulus in his next budget. It raises the question, “What will you do if you get a tax cut?” In far too many cases, the answer is either to pay down personal debt or save. What we need is effective fiscal stimulus. That means getting money circulating in the local economy. And that means putting money in the hands of people who are going to spend it.
Taxation has loomed large in discussions about the future of Canada’s economy. But so much of the debate is centred on numbers and how much money Canadians pay – forgetting that taxes are equally about government programs and services, poverty and inequality.
Taxes are an important tool, helping the government to carry out its public justice tasks. Taxes are a major contribution to the common good, an investment in our shared future. We need to go beyond looking at taxes as an isolated set of numbers to recognize the contribution that these revenues make to our entire society. Ask your candidate about what kind of Canada they want to live in, and how collective programs and services can contribute to that.
Recently, I received a flyer from the current governing party offering me two choices: I can pay a 5% GST or a 7% GST. In case I was uncertain of the best choice, inside a smiling man tells me “We kept our promise to cut the GST,” while a dopey-looking man is labeled as “threatening to raise it back up to 7%.” Given the options, my choice is clear. More taxes? Yes, please! In fact, rather than taking something away from me, taxes make a contribution to the betterment of my life, my country, and my fellow Canadians. Taxes generate the revenues that create our social and physical infrastructure, support our democratic institutions and provide a mechanism for redistribution so that no one in our financially prosperous country is left too far behind.
Something is missing in the current focus on taxes and economic management: taxes don’t happen in a vacuum. They provide the revenues for government services. Paying taxes is thus one way in which we contribute to the common good. What’s more, when we talk about taxes, we’re really talking about what kind of country we want. This idea should be debated as vigorously as tax rates and economic management.
The recent federal government’s economic statement outlined tax cuts, including a cut to the GST. But for most of us, these tax savings will be measured in spare change, not thousands of dollars. Instead, these tax cuts help to erode the fairness of our progressive tax system. To help more Canadians reach their full potential, the federal government could have made other choices with the recent $14 billion surplus.
Canada is a land of great wealth. Nowhere was that more apparent than in the 2006 federal budget, the first of the new Conservative government. In it, Minister of Finance Jim Flaherty forecast surpluses of more than $37 billion dollars over the next two years.
Public justice issues framed for the 2006 federal election.
The stage: the parliamentary pre-budget hearings. The performance: the Finance Minister’s annual economic and fiscal update. The key message: prudent fiscal management over the past ten years will deliver multi-billion dollar annual surpluses over the next five years.
UNICEF’s recent report, Child Poverty in Rich Countries 2005, paints an unflattering portrait of Canada’s lack of progress in reducing child poverty. With a child poverty rate of 14.9%, Canada ranks 19th out of 26 OECD nations.
As the federal government goes about making good its promise to invest in early learning and child care, perhaps it is not surprising to hear voices of dissent raising many of the old arguments against such a move. There are groups and individuals who continue to equate publicly funded child care with Soviet-style state socialism. It is important to avoid such distortions and recognize that early learning and child care, sensitively planned, is one piece in a mix of policies to support families in their varied needs and situations.