"A rose by any other name would smell as sweet" -- Shakespeare
"A tax by any other name would bite as deep" -- Green
Prior to the last election the NDP promised that its platform for re-election would be implemented without any tax increases. It continues to assert that this promise is being kept. In the meantime, provincial revenues are budgeted to increase by $452 million.
That's an increase of about seven per cent over the previous year, but the government, by sleight of hand, maintains that this has been done without an increase in the tax rates. If pressed they will argue that the sales tax, the income tax, the payroll tax rates have not increased and accordingly their promise has been kept.
The government's rationale gives us some insight into the proposal that the MPI use revenues obtained from premiums to help finance road safety infrastructure.
The government argues that road safety would reduce accidents, which would result in lower insurance premiums. If the argument is correct, and I do not challenge it, then why would the government not use its general revenues to make such changes?
When Autopac was introduced in 1972, the reasons given were quite satisfactory and explicit. The public could provide coverage more efficiently and less expensively than the multitude of private insurers then operating. It would be outrageous for the government to have suggested that the private insurers increase their premiums to contribute to government road improvement programs. There is no example of any government, anywhere imposing an obligation on automobile insurers to pay for road improvements.
If Autopac started to do so it would make it more difficult to compare Autopac rates with those in the private sector. Perhaps this is one of the reasons that the government has commented favourably on the Autopac proposal. Anything that obscures analysis of performance is attractive to the government.
The Autopac proposal is not the first or the only time that the government has used alternative forms of revenue collecting which they claim are not an increase in taxation rates. Although the retail sales tax has stayed at seven per cent, it has now been applied to a whole series of purchases that were not included in the first place. Retail sales tax revenues will rise by over $200 million. Much of this increase can be attributed to previously exempt purchases, now included, such as haircuts and beauty parlour services over $50, which will primarily affect women.
The most cruel and outrageous of these inclusions will be taxes on fire insurance premiums which will affect owners and tenants alike. A modest homeowner will have about $70 added to their insurance premium but not for any logical reason. Unlike the so-called sin taxes on liquor and cigarettes, virtually everyone has to buy fire insurance and there is no relationship with ability to pay or service provided.
Perhaps the most outrageous and cruel of the non-taxes is the land transfer fee. Young or old, anyone who buys a modest hope in Manitoba must pay a land transfer fee. A home valued at $201,000 will not be registered in the land titles office unless the buyer forks over $1,750 to the government.
It used to be the case that purchasers had difficulty raising the down payment. Today they have the additional hurdle of the registration fee. Equivalent purchases in Alberta will be registered for $75 and $600 in Saskatchewan.
The reason the government gets away with the increased fee is that while home purchasers are numerous, they represent a very small percentage of the population in any one year. They are very angry about the tax, but there are not enough of them angry at the same time to have any political clout.
This government needs money to pay for its expenditures but considers taxation to have a bad name. Accordingly, the financial wizards of the NDP have decided to practice alchemy by turning lead into gold. They simply give taxation another name and hope nobody will notice.
The fact that the word taxation is anathema to the government was not always so and need not be so. Governments have been elected after raising taxes. The best example is the Tommy Douglas government of Saskatchewan, which imposed a two per cent sales tax to finance universal hospital benefits. The people supported the tax and the government.
The people can and will recognize that a tax is justified when the government provides a service which will be more expensive or prohibitive if purchased individually. The big reason that taxation has such a bad name in Manitoba is that the public is not convinced that it is getting value for its money. Most citizens are unable to identify the additional services provided by the government since it came to power 12 years ago, that would justify the repeated taxes that have been imposed.
Sidney Green is a Winnipeg lawyer and a former NDP cabinet minister.