Winnipeg Free Press - PRINT EDITION

Harper's low-tax plan not low at all

  • Print

Happy Tax Freedom Day! When Canadians return to work today, June 6, they will finally be working for themselves. In other words, if we had to pay all our taxes up front, we would have to pay each and every dollar we earned from Jan. 1 to June 5 to various levels of government.

Coincidentally, Finance Minister Jim Flaherty is also scheduled to deliver the federal budget on Tax Freedom Day. All expectations for the budget are that it will look much like the March version, dubiously entitled A Low-Tax Plan for Jobs and Growth.

While the March budget provided the Conservatives with good rhetoric heading into a federal election, the truth behind the spin is the budget was anything but a low-tax plan for jobs and growth.

In delivering the plan, Flaherty promised that his government "will keep taxes low."

However, taxes are hardly low. With the tax return deadline having just past, Canadians are still getting over the shock of just how much income tax they paid last year.

But the reality is that income taxes account for only about one-third of the total taxes we pay. Add property taxes, sales taxes, profit taxes, health taxes, social security taxes, alcohol taxes, tobacco taxes, fuel taxes and many others to the mix and the average Canadian will pay $39,900 in taxes (42.6 per cent of income) in 2011.

The March federal budget actually estimated an increase in total federal tax take from 12.9 per cent of GDP in 2010/11 to 13.4 per cent in 2015/16.

While this may seem insignificant at first glance, it translates into an additional $67.1 billion in tax revenue. In all likelihood, this means a later Tax Freedom Day in years to come.

Canadians are also rightfully worried about the substantial $30-billion deficit the federal government expects to run this year and the fact that it has no credible plan to return to a balanced budget.

In the March budget, the Conservatives proposed balancing the budget in five years (by 2015/16). To get there, the government pinned its hopes on revenues growing at a robust average rate of 5.6 per cent over the next five years while holding program spending increases to an average rate of 1.6 per cent.

The same approach failed drastically in the 1980s and early 1990s. Successive federal governments failed to balance the budget by trying to slow the growth in spending while hoping for higher revenues.

And there's nothing in the current Conservative government's track record suggesting they are capable of keeping a lid on spending increases. Even before the financial crisis and its massive fiscal stimulus package, the Conservative government increased spending at an average rate of 5.5 per cent.

Of course, today's deficits must one day be paid for by taxes, which means the longer the government delays balancing its books, the more likely Tax Freedom Day will fall later in the year.

In fact, if Canadian governments covered current expenditures with current tax revenues, Tax Freedom Day would fall 22 days later on June 22.

Rather than increase the tax take, a true low-tax plan would have aggressively cut government spending to balance the budget and then implemented a multi-year plan to reduce taxes. Waiting years to eliminate the deficit will only burden Canadians with higher government debt, increased interest payments and ultimately higher taxes.

On that note, Happy Tax Freedom Day! Maybe happy is not the right word...

Niels Veldhuis collaborated with Charles Lammam, both economists with the Fraser Institute, in writing this piece. Calculate your Tax Freedom Day at

--Troy Media

Republished from the Winnipeg Free Press print edition June 6, 2011 A11

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes


  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.


Make text: Larger | Smaller


Total Body Tune-Up: Farmer's Carry

View more like this

Photo Store Gallery

  • MIKE APORIUS/WINNIPEG FREE PRESS STANDUP - pretty sunflower in field off HWY 206 near Bird's Hill Park Thursday August 09/2007
  • A goose flys defensively to protect their young Wednesday near Kenaston Blvd and Waverley -See Bryksa 30 Day goose challenge- Day 16 - May 23, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos


Did you watch the Bruce Jenner interview?

View Results

Ads by Google