Ottawa might stability its price range just by sticking to its spending plan of two years in the past. It ought to do this, then lower taxes
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The Trudeau authorities is sort of a band that solely is aware of one tune: extra spending/greater taxes.
It not too long ago imposed a capital good points tax hike. A part of the rationale was to scale back the debt burden on future Canadians. “Canada could finance these critical investments by taking on more debt, but that would place an unfair burden on younger generations,” Finance Minister Chrystia Freeland mentioned in saying the rise. “Fiscal responsibility matters.”
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But when the federal government is admittedly apprehensive about deficits and debt, couldn’t it lower wasteful spending as an alternative? On the Canadian Taxpayers Federation, we commissioned a Leger ballot asking Canadians that very query. The response was that 54 per cent of us choose the federal government to chop spending, whereas solely 23 per cent favour the capital good points tax enhance. The remainder have been not sure.
That 54/23 breakdown implies that amongst those that do have an opinion, 70 per cent of us — greater than two to at least one — choose lowering spending to growing capital good points taxes.
Right here’s the place the federal government ought to lower:
If it desires the wealthy to pay extra, begin by making multinational firms and their shareholders pay for their very own factories. As a substitute, the feds have put taxpayers on the hook for about $30 billion in subsidies to large corporations like Honda, Volkswagen, Stellantis and Northvolt. The federal government has additionally introduced greater than $600 million for the Ford Motor Firm, $551 million for Umicore, $420 million for Algoma Metal, $110 million for Toyota, $372 million for Bombardier and $12 million for Loblaws, amongst others.
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Based on the Fraser Institute, federal company subsidies totaled $11.2 billion in 2022. That’s greater than double what the federal government spent on company subsidies in 2015, even after accounting for inflation. And it’s $4.2 billion greater than Ottawa will usher in by the capital good points tax hike this yr.
The federal government additionally must take air out of its ballooning forms, which consumes greater than half its day-to-day spending. Payroll hit a document $67 billion final yr, up 68 per cent since 2016. The explanation for the spike? A much bigger forms gathering greater paycheques. The Trudeau authorities has employed about 100,000 extra bureaucrats since 2015. The feds additionally rubber-stamped greater than $1.5 billion in bonuses, regardless of the Parliamentary Finances Officer discovering “less than 50 per cent of (performance) targets are consistently met.” And it dished out greater than one million pay raises over the past 4 years.
The federal government ought to dump Crown firms such because the CBC, which competes with media firms and prices taxpayers greater than $1 billion yearly. VIA Rail needs to be on the chopping block, too. The feds shovelled $1.8 billion on the failing Crown company over the past 5 years simply to cowl its working losses.
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Canada ought to comply with the lead of nations like the UK, Sweden, the Netherlands, Germany, New Zealand and Portugal, which have totally or partially privatized their postal companies. Canada Put up misplaced $548 million in 2022 and $748 million final yr and forecasts “larger, unsustainable losses in future years,” based on its annual report.
Among the many virtually numerous different examples of presidency waste: the Nationwide Capital Fee spent $8 million constructing a barn at Rideau Corridor; Parks Canada is spending $12 million looking deer on one B.C. island. Three “affordability” cupboard retreats within the house of a couple of yr value greater than $1 million. Prime Minister Justin Trudeau and his entourage racked up a $220,000 in-flight catering tab throughout a week-long tour of the Indo-Pacific final September — after the federal government had promised to chop down on these prices. Federal departments and Crown firms are spending thousands and thousands branding trinkets and different merchandise.
Balancing the price range would solely require modest restraint. In truth, the federal government might do it this yr if it merely caught to its personal spending plan from simply two budgets in the past. Even should you take away the additional money from the capital good points tax, the deficit can be $5.5 billion, not $40 billion.
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There are two key takeaways right here. First, Canadians are fed up with tax hikes and wish much less authorities spending. Second, there’s no scarcity of locations to chop. The federal government ought to take heed to Canadians, cease climbing taxes and as an alternative lower spending.
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Franco Terrazzano is federal director of the Canadian Taxpayers Federation.
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