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COLUMN: 'Tis the season, so how are Canadians taxed on a global scale?

When politicians promise lower taxes, exercise due diligence and demand details about what they plan to abandon, says columnist
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There is one thing on which all Canadians can agree: taxes. 

We all dislike — some despise — paying taxes. April is a tough month. Not only do April showers bring May flowers, but it's is also the deadline for filing Canadian income tax.

I guess most Canadians believe Canada is a high-taxation country. This is partly because politicians have been trumpeting that mantra for decades, but also because we usually compare ourselves to our neighbour, the United States.

It is true that taxes are slightly higher in Canada than they are in the U.S. However, we Canadians receive most of our health care for “free.” Of course, it isn’t “free” at all. Simply put, we pay for our health care in advance, via our taxes.

And that’s a crucial point. If you factor in America’s high-cost health care and include health insurance, the result comes out considerably higher than Canadian taxes. Health care is neither free nor inexpensive, but Canadians are not forced into bankruptcy when we become ill, either.

Canada is a founding member of the Organisation for Economic Co-Operation and Development (OECD). Created in 1961, this consists of 27 “high-income” countries. It's committed to fostering democracy and the market economy. In support of that goal, the OECD guides the domestic and international policies of its members.

The OECD publishes comprehensive summaries of the taxes its members collect. These summaries consist of income taxes, corporate taxes and sales taxes, but exclude other levies such as property taxes and fees like marriage licences, car and driver registration, etc. The OECD graph is complicated by including social service charges like pensions and unemployment.

The pension levy is not really a tax because it is returned to citizens when they retire. Although I have never personally made a claim for unemployment, many Canadians have, so this tax on my income has been a benefit for others.

The same could be said of taxes collected for health care. I have, fortunately, seen very little come back to me, and am grateful for that. But it remains available should I need it. Of course, the likelihood of needing health care increases as we age.

Japan enjoys the OECDs lowest taxation rate. They claim that prize because the Japanese are particularly law-abiding and respectful of each other, so they spend little on policing, courts and prisons.

As for sales taxes, our GST is far lower than other OECD countries, but we must factor in provincial tax. Adding provincial sales taxes to the GST more than doubles the federal value; the equivalent of what the OECD lists. That still puts us several percentage points lower than most OECD countries charge their citizens. (The U.S. has no federal sales tax and state sales taxes tend to be low by OECD standards.)

Let’s think about what taxes buy us. If we go back 250 years, Canada had virtually no roads, no sewers, a few (private) schools, no garbage collection and a military provided mostly (wholly?) by Great Britain.

Today, we have schools, universities, hospitals, police, fire and ambulance services, ports, sewage treatment, canals, hospitals, courts of justice, electricity, snow plowing and more. All of these essential services and infrastructure were made possible through tax revenues.

When politicians promise “smaller government,” this is code for reduced services and infrastructure neglect. Whenever you hear a politician make such a promise, demand to know what they intend to cut. It could be something you or your family values.

Some folks believe we should build more naval frigates and destroyers to protect our Far North. I would prefer we build heavy-duty icebreakers to strengthen our territorial claim to the Far North. Canada is an Arctic nation, but has just two heavy ice breakers — the Louis St. Laurent, which is 55 years old, and the much smaller Terry Fox, which is 41 years old. Compared to Russia’s 37 ice breakers, 11 of which are nuclear-powered, we clearly aren’t taking our Arctic seriously.

Some people think we need more police. I feel we first need more courthouses and judges to clear the backlog and halt our provincial and federal governments’ unintended “catch-and-release policy.” The police do their best, but if we cannot bring the accused to trial within a mandatory time frame, they must be released, guilty or not. I feel that undermines the — sometimes dangerous — work our police do.

Our universities must also be better funded. We import engineers, doctors, nurses, architects and others from abroad. Should a wealthy country like Canada poach smart, capable people from Nigeria, India, Colombia or the Philippines when these low- to middle-income countries invested in their education? Of course, we welcome them and their skills to Canada, but surely we must encourage the education and training of our own youth, too.

And how did our universities and colleges become financially dependent on foreign students paying two to three times what domestic students pay just to keep their doors open?

Lately, frequent and loud cries of “axe the tax,” referring to the federal carbon charge, have been heard.

On April 2, I wrote that my household’s quarterly “carbon charge rebate” was more than double the carbon charge we paid on our heating and cooking gas, and on vehicle fuel. About 80 per cent of Canadian households receive more money back in this rebate than they pay out in carbon charges. For our household, this was about $400 for 2023. Not a king’s ransom, but also not trivial.

Most of the revenue generated from carbon charges is returned to citizens who paid it, so it’s not a tax. Remember, if the “tax is axed” the rebate will go, too, leaving the majority of Canadians financially less well off.

People can choose to spend their rebate on fuel, or look for ways to reduce their energy consumption. The carbon charge has increased steadily over several years, giving people ample time to make these decisions.

When replacing a vehicle, you could downsize from a large SUV to a smaller one, or perhaps a hybrid version. You could buy a car without four-wheel drive and rent a larger vehicle when you need one. (Four-wheel drive costs more to buy and repair, plus it increases fuel consumption.)

When replacing a furnace, choose a high-efficiency model, or take advantage of rebates offered on heat pumps. When windows need replacing, choose triple glazing with low-emissivity glass. An inexpensive “fix” is to blow extra insulation into your attic. Lowering the thermostat by 1 Celsius and wearing a sweater is even cheaper.

There are many energy-saving possibilities available, some of which have government incentives attached. That is exactly what the carbon charge aims to encourage Canadians to do.

As for politicians promising lower taxes, exercise due diligence and demand details. Ask them how they intend to compensate for the shortfall, or what services and infrastructure investments they intend to abandon.

Any politician who will not explain what they intend to do and how they intend to do it – in detail – is simply a charlatan selling snake oil. We have often been warned about telephone scams. We must be just as wary of those offered by politicians wearing well-tailored suits.

Barrie resident Peter Bursztyn is a self-proclaimed “recovering scientist” who has a passion for all things based in science and the environment. The now-retired former university academic has taught and carried out research at universities in Africa, Britain and Canada. He is also a former NDP candidate. As a member of the community advisory board for BarrieToday, an affiliate of BradfordToday and InnisfilToday, he writes a semi-regular column.