Well, the Fraser Institute is at it once again, announcing so called “Tax Freedom Day”. Its announcement is purportedly meant to signify when we achieve our “freedom” from those burdensome taxes paid to government. It’s always worth noting why we as Canadians pay taxes, and what services are delivered to working families as a result of our collective actions. Because the truth is taxes provide tremendous value to us as Canadians. To be frank: taxes are not a penalty. They are a collective investment in our communities. They pay for the people and services families depend on. We’re talking about nurses, health care aides, doctors, police, paramedics, correctional officers, teachers, social workers, water quality inspectors, workplace safety inspectors, highways workers, flood control officials, probation officers, home care attendants, and addictions counselors. These are but a few of the people our taxes go toward. Their work enhances our quality of life immeasurably, and levels the playing field between those who have much and those who have little (many through no fault of their own). We all benefit from paying taxes – even those working at the Fraser Institute. We all need safe roads to drive on and public employees help ensure that. We need safe drinking water, and safe workplaces. We need social services for people asking for help, and security in our communities for those who break society’s rules. We need to educate our children, we need accessible health care, and we need to ensure respect and dignity for the elderly. And we need to share the responsibility to invest in these areas. So, in my humble opinion, the concept of “tax freedom” has always been used to undermine the value of the public sector and public services. It suggests Canadians derive no benefit from taxes. And the average Canadian knows that’s not true at all. And while the average Canadian knows we need to ensure healthy services in their communities, it’s important to acknowledge that the playing field is getting less and less even every year. It’s about fairness. Consider these facts:
  • The top 1% of income earners in Canada paid a lower total tax rate than the lowest 10%;
  • By 2012, Canada will have the lowest corporate tax rates in the G7. Canada’s rate will be 15% lower than the US, yet governments say they are running deficits and will need to cut public services;
  • In the past 12 years, Canada’s top CEOs have seen their salaries go up an average of 444%. In 1995 the top ten earners made a combined total of $60.7 million— by 2007, that number had jumped to about $330 million;
  • The 100 best-paid CEOs in Canada breezed through the peak of the recession in 2009 with an average $6.6 million in compensation. That’s 155 times more than what a Canadian earning the average wage of $42,988 earns;
  • According to a University of Quebec study, between 1993 and 2003, the five big banks used their offshore accounts to avoid paying $16 Billion in Canadian taxes;
  • In 2009, Statistics Canada reported that $78.4 billion of Canadian assets were invested in the tax havens of Barbados, Bermuda and the Cayman Islands, exceeding the GDP of these tiny jurisdictions many times over; and
  • A Globe and Mail review of executive pay last year shows CEOs at Canada’s 100 largest companies saw their compensation jump 13 per cent last year, led higher by a 20-per-cent increase in annual cash bonuses. Base salaries climbed 4 per cent.
So it appears the big banks and the corporations, CEOs are doing quite nicely – thank you very much. It’s average Canadians who rely on quality public services to ensure their health, education and overall quality of life that are getting the short straw.
  • A recent study by the Canadian Center for Policy Alternatives estimates that the average Canadian household takes advantage of about $41,000 a year in public services;
  • Total government spending in Canada has dropped dramatically over the last 16 years. In 2002, total government spending in Canada as a percent of Gross Domestic Product (GDP) was 53%. In 2008 it was 39%;
  • In 1995 total government revenue in Canada was 36%. In 2008 it was 33%. A drop of 3% may not seem like a lot. But it actually represents a loss of about $50 billion a year in revenue for governments in Canada. That’s $50 billion that could be invested in health care, education, child care, public pensions and social services;
  • In the G7, Canada has the lowest total government debt of all countries – by far! According to the International Monetary Fund (IMF), by 2014, total government debt for G7 countries is predicted to be: Japan (142%); Italy (123%); United Kingdom (91%); United States (83%); France (82%); Germany (81%); Canada (32%).
So we’re not drowning in debt like other jurisdictions around the world, we’re not spending irresponsibly (if you consider health care, education, and security of our communities as good investments), and Canadians in the middle and lower income categories really depend on our social safety net. This is why so many Canadians – a majority, in fact – said via the ballot box that they don’t support the Conservative government’s agenda of giving even more breaks to the banks, the CEOs and the corporations. So what is Tax Freedom Day? Well, it should be a wake-up call signaling that we need to begin talking about re-investing in those things that make Canada a generous, compassionate, and GREAT country to live in. It’s about fairness. That’s what my Canada is all about.

“Taxes are the price we pay for civilization” Justice Oliver Wendell Holmes

Lois Wales is President of the Manitoba Government and General Employees Union.