Groaning Beneath The Yoke

Last week, that paragon of rectitude, impartiality and righteousness (irony alert!), The Fraser Institute, performed its annual service to all Canadian by reminding us of the tax yoke under which we all groan:



This non-profit, tax-payer subsidized 'independent' think tank without a political agenda was keen to share details of our collective burden:

The Fraser Institute calculates that the average Canadian family paid $34,154 in taxes of all sort last year, including "hidden" business taxes that are passed along in the price of goods and services purchased.

The study's authors conclude that visible and hidden taxes would have been equal to 42.4 per cent of the cash income for an average Canadian family in 2015, estimated at $80,593.

By comparison, the study estimates the average Canadian family spent $30,293 on housing, food and clothing last year — about 37.6 per cent of the family's total cash income.

Thanks to a largely compliant and/or lazy mainstream media, this is now being accepted as a factual and grievous injustice. However, leave it to Press Progress to provide some much-needed balance and perspective:

Although the Fraser Institute claims the average family spends 42% of its income on taxes, less than one-third of that number actually refers to federal and provincial income tax.

The Fraser Institute inflates its numbers by tacking on average costs for health insurance, pensions and employment insurance (as if they're all one in the same thing) and further pads their numbers by including corporate taxes and oil and gas royalties for some reason.

Fraser Institute defends their curious methodological choices by arguing "the cost of business taxation is ultimately passed onto ordinary Canadians."

Is that true? To the extent that taxes on corporate profits are passed along to anyone, a US study shows four-fifths of the corporate tax burden would be passed onto income earners in the top 20% – in other words, even by the Fraser Institute's own logic, it's not being passed on to the "average Canadian family."

In a similar vein, that outlier of the mainstream media, The Toronto Star, offers offers this counsel about the alarmist report:

- it deceptively includes corporate taxes, which are largely shouldered by richer Canadians.

- as a share of Canada’s economy, taxes are now at a low rarely seen over the last three decades.

- the portion of income going to taxes has increased by only 7 per cent since 1961.

The biggest flaw in the Fraser report, typical of the kind of right-wing propaganda it regularly disseminates, is the glaring omission of what we get for those tax dollars:

A 2009 report from the Canadian Centre for Policy Alternatives found that middle-income Canadians enjoy public services, from education to health insurance to pensions, worth about $41,000 annually per family – or roughly 63 per cent of their income. Conversely, we have watched as decades of tax cuts have led to eroding public services, but also to rising inequality, persistent homelessness, traffic gridlock and crumbling schools.

So clearly, that yoke under which the Fraser Institute would have us believe we all slave isn't quite the burden they have presented. Indeed, many would not call it a yoke at all, but rather a representation of the values we hold dear as a society. But I guess the Fraser Institute lacks both the will and the tools to measure such vital intangibles.

On Progressive Legislation

While I am sure that the legalization of marijuana will not be a legislative priority of the incoming government, I have little doubt that Justin Trudeau will honour his pledge to enact it. It is something I have given a fair bit of thought to, and although initially I was quite ambivalent about the prospect, I now embrace the argument that, however counter intuitive it may seem, it is far better to legally control cannabis, thereby reducing both the power of the criminal element that currently supplies the recreational market, and the prevalence of its distribution to young people.



As well, the fact is legalization will also mean a new source of tax revenue, something not to be lightly dismissed. Additionally, police forces will no longer be wasting their resources and taxpayers' money on the failed 'war on drugs'. It is something I think they will welcome:

The Canadian Association of Chiefs of Police has been pushing since 2013 for officers to have the ability to ticket people found with 30 grams of marijuana or less.

Mario Hamel, the association's vice-president and the chief of the Gatineau police, said legalizing marijuana could free up officers to address other issues.

Also instructional is the Colorado experience:

... this summer, state officials reported that marijuana tax revenues were up nearly 100 percent, according to ABC7 Denver. Revenue jumped from $25 million in the first five months of 2014 to $44 million in the same period this year.

Colorado began directing some marijuana revenue toward school and research programs in May, including providing grants to public school districts and charter schools, an education official told The Huffington Post. Almost $24 million was allocated to the Building Excellent Schools Today program, said Kevin Huber.

The possible mechanics of distribution, economic benefits and the potential for international growth are discussed in this Power and Politics clip:



As also implied in the above, there will clearly be other benefits to the economy: the additional employment of people to grow and distribute the products, as well as the ancillary industries arising around cannabis:

Leigh Coulter, president and co-owner of GGS Structures, which builds greenhouses for marijuana operations and other agricultural products, anticipates major growth for her small business after last night’s election. “This is an extension and a chance to let the world know Canada will be a leader,” she said. “We will develop the technologies to ensure that this is a crop of great revenue potential.”

Mr. Alves anticipates a number of other small-business sectors benefiting from a more marijuana-friendly Canada as well.

“You just have to look south of the border to see the types of businesses that have sprung up – everything from marijuana-focused marketing and promotions to technology platforms and delivery systems,” he said. “There’s also a real opportunity for some of the businesses that currently exist in an unregulated market to really become a mainstream businesses; they can develop and scale as opposed to remaining in the shadows of a grey market.”

Not to be forgotten either is the upscale market for recreational marijuana:

The newly launched website Tetra offers an array of handmade objects, smoking accoutrements designed to be kept in plain sight – especially when company comes over. Designers and artists including Ben Medanksy, Matthias Kaiser and Leah Ball are creating luxurious pipes out of marble and buffed sandstone, and ashtrays that would make The Dude topple over in awe.

Add to that the increasingly artisanal cast of cannabis strains, and you have a recipe for real growth.

No public policy should be decided solely on the basis of economic parameters; however, I am convinced that the legalization of marijuana will be progressive legislation ultimately welcomed and endorsed by a progressive nation.

As always, I welcome all comments, and I am certainly happy to entertain challenges to the position that I have advanced here.

About Those Taxes...

Responding to the latest propaganda piece about taxation levels from The Fraser Institute, Star readers weigh in with their own perspectives, one of which includes taking the paper to task for publishing news of the report with no critical comment:

Re: Families pay more for taxes than basics, Aug. 13

This report of a study from a conservative think tank could be a verbatim quote from the authors’ press release, with no editorial comment or critical opinions included. The Star does us a disservice (and, rather atypically, gives the conservative cause a boost) by publishing it in this fashion.
Other news sources (the CBC, for example) discussed the study in the context of criticisms, such as the fact that the base year 1961 was at the very beginning of Medicare and before state pension plans were instituted, not to mention many other lifestyle shifts that have taken place over the 52-year gap of the selected comparison.

The report as cited by the Star sounds more inflammatory than instructive.

Eleanor Batchelder, West Toronto


The Fraser Institute just confirms what most Canadians already know — their disposable incomes are either stagnant or decreasing while their taxes are constantly going up.

What most Canadians don’t realize is that while their taxes have been steadily increasing over the years, the corporate tax rates have been coming down. Corporate lobbies pushed our government to implement policies that catered to businesses and corporations at the expense of consumers. And the tool that successive Canadian governments used to implement the corporate agenda was taxation.

In the 1960s the federal corporate tax rate was 40 per cent. This rate has been whittled down by successive Liberal and Conservative governments. Today it is 15 per cent — the lowest in all of the G8 countries. But for consumers, taxes went up.

To make up for revenue lost from the discontinued 10 per cent manufacturing tax, paid by manufacturers only, the federal government’s GST is effectively paid by consumers. And with the added HST, Ontarians have to pay 13 per cent tax on almost every product and service they buy. This is on top of increases to income taxes, property taxes, health, vehicle, alcohol and tobacco taxes.

This massive shift in tax burden from corporations to individuals is the reason that Canadians are spending more on taxes than food, shelter and clothing and why most of us feel that we are going backwards rather than forward in terms of our disposable incomes.

Michael Poliacik, Toronto

Will The Harper Promise Of Tax Breaks Continue To Seduce Canadians?

Recently, Ontario Premier Kathleen Wynne called upon the Harper regime to commit $12 billion annually in infrastructure funding. This request takes on even greater urgency in light of the challenges we are and will be facing as we reap the consequences of climate change.

Fiance Minister Joe Oliver's response:

Wynne’s request is “divorced from fiscal reality.”

“We are not going to engage in a wild spending spree, which will create massive deficits and increase the debt. . . . We will also not jeopardize our top credit rating and we will not add to the intergenerational burden,” he said.

At the same time Herr Harper's henchman is preaching the virtues of fiscal discipline and ignoring the increasing costs of doing nothing in light of the above-stated peril, he is also pandering to our basest and most selfish instincts.

Yesterday, in a preview of the 2015 budget that will be designed to ensure the regime's re-election, 'Uncle Joe' offered this tease:

“I’m talking about reducing taxes for Canadian families and individuals”.

The words 'false economy' never escaped him ample lips.

In reference to a study done by the regime's ideological allies, The Fraser Institute, which just released a 'study' claiming we are grossly overtaxed and not getting good value in return, the finance minister had this to say:

Ottawa has reduced the federal tax burden and has urged other levels of government to reduce expenses and taxes.

It’s healthy for Canadians to understand the facts when it comes to taxes so the public can decide what’s fair and necessary.

So the Institute is just providing a public educational service, eh?

In that case, be sure to check out this piece, which points out some flaws in both the study's methodology and ideology.

After all, apparently Uncle Joe wants Canadians to be fully informed to decide 'what's fair and necessary.'

The final choice is up to us in 2015. Will we embrace the Harper ideology of selfishness and insularity and re-elect a corrupt and undemocratic government? Or will we rediscover our collectivist traditions and remember that our obligations are not only to ourselves but to each other?