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July 3, 2008

Canada Day Brickbats & Laurels

While Canadians celebrated Canada Day on July 1, it was business as usual for government. Taxes were paid, regulations enforced and lawmakers handed out awards. Indeed, the holiday was an unusually active one on public policy issues of concern to the Canadian Taxpayers Federation, which is dedicated to lower taxes, less wasteful spending and government that is accountable to voters.

On Taxes – Brickbat to Higher Energy Taxes

British Columbia taxpayers are paying more for gasoline and most other energy sources as a result of Liberal Premier Gordon Campbell’s introduction of a carbon tax. The levy went into effect on July 1 and gasoline taxes increased by 2.34 cents a litre (the additional tax paid by consumers is actually 2.46 cents/L when the GST tax-on-tax is factored in). Vancouver, which today has the highest taxes on gasoline, saw pump prices jump to over $1.50. The province’s carbon tax will also hit natural gas, propane, diesel and jet fuel. It will rise again on Canada Day over the next four years unless high energy prices and voter furry prompts Premier Campbell to rethink his policy.

Canada’s Official Opposition also wants to saddle consumers with a federal carbon tax if they win the next federal election. Liberal Leader Stéphane Dion’s plan will not add a new tax to pump prices because, the opposition rightly says, gasoline is already heavily taxed by Ottawa. Instead, the Liberal proposal will see taxes on other energy sources – like home heating fuel – rise to the level of taxes applied to gasoline.

On Spending – Laurel to the Department of Indian Affairs

July 1 also saw the introduction of a reform to bring badly-needed accountability to Canada’s native reserves. Indian Affairs Minister Chuck Strahl’s hard-fought proposal to amend departmental funding agreements to include an audit clause went into effect. This change gives Ottawa powers to review how native bands spend tax dollars and is something taxpayers – native and non-native alike – have repeatedly demanded. Ottawa believes adding any audit mechanism will ensure tax dollars are actually spent “for the provision of intended programs and services and that [native reserves] have appropriate management, financial, and administrative controls in place.” Translation: that federal money is spent responsibly and bands account for it. This small, but necessary, spending reform brings the Indian affairs department in line with virtually every other federal department, including health, heritage and the RCMP. It is a long-overdue reform given that every year $10-billion is transferred to native bands across Canada.

On Accountable Government – Brickbats to the Government of Canada & Rideau Hall

Prime Minister Stephen Harper quickly distanced his government from Rideau Hall’s award of the Order of Canada to Dr. Henry Morgentaler this week. Whereas the Governor-General routinely takes advice from elected officials on other matters, Order of Canada appointments are made by an advisory committee without ministerial input. If Canadians are hoping their Prime Minister might have a say on appointments they must look across the pond, to Britain.

Former Prime Minister Jean Chrétien advised the Queen not to grant a life peerage to Conrad Black after the British government recommended him for this honour. Similarly, Canadian Roy Thomson’s peerage was blocked by Lester Pearson. (Both men forfeited their Canadian citizenship to bypass Ottawa’s ruling.) The British honour system includes an advisory committee, but unlike Canada also permits input from the Prime Minister’s office. Canada’s Prime Minister can therefore advise (approve or block) our Queen on the granting of honours to Canadians from London, but he has no influence on honours originating in Ottawa. Only in Canada, you say? Pity, but not surprising.


Please note that after six good years with the Canadian Taxpayers Federation, I will be resigning as federal director on Sept. 12, 2008, to undertake graduate studies in economics.

John Williamson
Federal Director
Canadian Taxpayers Federation

Posted by John Williamson, Canadian Taxpayers Federation [permalink]

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