TAXES.CA - The Canadian Tax and RRSP Homepage TAXES.CA - Your source for tax information in Canada
Canadian Tax BlogDirectory of Canadian Tax ProfessionalsCanada Tax and RRSP Information
Canadian Tax Blog

June 2006 Archives

June 17, 2006

Tax Freedom Day Arrives Monday

Tax Freedom Day Arrives Monday – More Evidence Canadians Remain Over-taxed
And StatsCan Reports Total Government Surpluses Hit $26-B in ’05

The Only “Fiscal Imbalance” is Between Governments & Taxpayers

Ottawa: The Canadian Taxpayers Federation (CTF) today responded to news from the Fraser Institute that Tax Freedom Day for Canada will occur on Monday, June 19th. Tax Freedom Day is the day of the year when taxpayers finally start working for themselves after paying the total tax bill imposed on them by all governments. The original release and calculations are available at: www.fraserinstitute.ca.

“Canadians this year will work 169 days to feed the appetite of all three orders of government, chewing up 46 per cent of average family income,” stated CTF federal director John Williamson. “Government officials insist broad-based tax relief just isn’t possible. Yet millions of Canadians recognize our politicians don’t tax to collect the money it needs, instead governments always find a need for the money it collects. Isn’t it time the requirements of taxpayers were given a higher priority?”

Statistics Canada reported on June 15, 2006, that the combined surplus for all Canadians governments was $26-billion last year (2005/06 fiscal year), the second highest level in 20 years. Governments collected revenues of $572.9-billion in taxes and spent $546.9-billion. The agency found “revenues were up 6 per cent, outpacing the 4.1 per cent gain in spending.”

“This is evidence governments of all political stripes are taxing Canadians too heavily. The StatsCan figures are based on ’05 data. The fiscal forecast for the current year is even rosier, meaning total tax revenues flowing to governments will continue to grow,” noted Mr. Williamson. “Politicians just don’t get it. If taxes cannot be reduced when Tax Freedom Day is arriving on June 19th it signals Canadian governments have a spending problem, not a revenue problem. When will this imbalance be fixed?”

John Williamson
Federal Director
Canadian Taxpayers Federation

Posted by John Williamson, Canadian Taxpayers Federation [permalink]



June 8, 2006

Just Say “No” (to Mayors)

When the Federation of Canadian Municipalities asked Stephen Harper to their meeting last week, municipal leaders probably expected him to rollover and accept their demand for a slice of Ottawa’s GST and income tax revenues. The Prime Minister would have none of it. He understands the votes of taxpayers are more valuable to him than accolades from mayors.

On the specific issue of providing tax room to municipalities, Mr. Harper simply said, “We have no plans to do that but obviously we’re listening to all kinds of proposals.” And what proposals might there be? Ottawa, he suggested, would be pleased to discuss ways to divvy up future federal surpluses. But don’t hold your breath because he cautioned “we do not anticipate large federal surpluses in the future.” If cities want more money, he told mayors, they should look to the provinces: “I do have to point out that municipalities are the responsibilities of the province.”

None of this is meant to suggest Canada’s cities have not received help, indeed the opposite it true. The three federal parties all support the GST rebates to municipalities as well as the “New Deal for Cities and Communities” which will transfer $5-billion of Ottawa’s gas tax money to them over five years. In addition, the recent federal budget included $16.5-billion in infrastructure spending over the next four years.


Because “no” is a word Canada’s big cities mayor don’t often hear, Federation of Canadian Municipalities President Gloria Kovach insisted afterwards the door somehow remained open for the federal government to transfer some of its taxing power to cities. She outlined the view of municipalities that property taxes are used to pay for basic infrastructure needs, like roads, police and fire services and other traditional costs like garbage collection. This is an exhaustive list. So what else is there?

According to the federation’s president, additional taxes are necessary for cities to tackle other new priorities, like culture subsidies and climate change. With cities jumping into these provincial and federal jurisdictions no wonder municipal property taxes have jumped by 24% nationwide since 2000.

The mayors even adopted a resolution to abide by the Kyoto Protocol. Ottawa believes it impossible for Canada to fulfill the targets to reduce greenhouse gases as spelled out in the international treaty without spending billions of dollars and crippling the economy. But not the Federation of Canadian Municipalities it seems.

A recent report from the C.D. Howe Institute concluded Ottawa’s (now defunct) plan to implement the protocol would cost $12-billion over seven years and still not achieve the targets. Continuing the plan would cost $80-billion over 35 years and emissions would be 50% higher than today. Little wonder budgets are stretched at City Hall.

One important responsibility of lawmakers is ensuring tax dollars are used efficiently. This is a lesson lost on the Federation of Canadian Municipalities and it is why granting additional tax powers is a nonstarter. Our municipal governments have a spending problem, not a revenue problem. Between 2000 and 2004, revenues collected directly by municipalities increased by over 16%. By way of comparison, Ottawa’s revenues over the same period grew by less than 9%. Cities need to begin prioritizing their spending, which is not happening. More money will only enable councilors to find new ways to spend it.

The Prime Minister’s message to municipal leaders was welcome. Next, taxpayers hope he is prepared to display a similar resolve when dealing with the country’s other group of whiners – Canada’s premiers. Provincial leaders will be meeting this week in Edmonton and they all want one thing from Ottawa. You guessed it, more of your money.

John Williamson
Federal Director
Canadian Taxpayers Federation

Posted by John Williamson, Canadian Taxpayers Federation [permalink]