Hugh MacKenzie writes that we should have had an adult conversation about taxes and public services long ago. But that conversation has never happened, despite the obvious connection between the two:
Tax cuts reduce fiscal capacity, driving reductions in public services and that if you want better public services, you need to increase the government’s fiscal capacity to generate revenue.
The alternative, from a 4-year-old’s perspective: if you go to the corner store with less money, you are going to come home with less candy.
In Ontario, the Wynne government began such a conversation -- then quickly gave up:
The closest we came in Ontario was the debate fostered by former premier Kathleen Wynne over how to pay for the massive investments in public transit infrastructure required in the Greater Toronto and Hamilton Area.
That got as far as a backgrounder prepared by Toronto’s city manager in 2012, followed by a formal options paper released by the transit agency Metrolinx in May 2013, which analyzed the revenue potential and impacts of a short list of options to raise money for transit funding.
It did not go well right out of the gate. Everybody wanted better transit. But everybody wanted someone else to pay for it.
And then the provincial government threw in the towel. The provincial government called a byelection in Scarborough and, all of a sudden, transit planning went out the window: the promise was promising Scarborough a three-stop subway instead of light rail at double the cost. And all of it for free.
Our other politicians have refused to go there:
Massive tax cuts were introduced by Paul Martin’s Liberals in the early-2000s coupled with a retreat by the federal government from public services in areas of jurisdiction shared with the provinces.
A cut in the GST rate by the Stephen Harper’s Conservatives led directly to the current federal deficit.
And we're living with the consequences:
The aggregate impact has been stunning. In 1992, the five-year average of total government expenditures as a share of GDP was 48.6 per cent. In 2016, the five-year average was 40.1 per cent — in the context of today’s $2 trillion economy, that’s worth $170 billion in lost spending on public services.
We see clear crisis indicators of decline everywhere we look:
Crumbling public infrastructure.
An elementary and secondary education system whose funding cannot meet the needs of today’s students.
Post-secondary tuition that is now more than triple what it was 25 years ago.
The lack affordable housing and the rise in homelessness.
A public health insurance system that excludes the fastest growing component of health care costs (pharmaceutical drugs) and that is straining to meet the needs of an aging population.
It's the age old conundrum: Everybody wants to get to heaven, but nobody wants to die. We have to pay for what we want.
Image: Canadian Centre For Policy Alternatives
14 comments:
.. timely post, thanks !
Yes.. I currently wonder where or how the complete fallacy of the Harper Years as economic genius at work.. via an ignorant fan club is sustained.. indeed, where was it conceived ? Good & honest Government seems a lost partisan tribe that drifted off over the hill or into the embrace of the GOP over the border or they wandered in the tundra or fell overboard into the sea.
In light of tripled tuition.. the current costs of textbook and workbooks.. and the scourge of extreme rents etc, I am left in wonderment at how students can afford higher learning. If not in one of the priceless residence programs, what students can afford to live off campus at Simon Fraser or UBC for example? Can they afford food ?
I see the buzzards of the Ontario Conservative Party cancelled funding of 1.2 million or so, to Mohawk College for its Climate Study Program. So maybe that's the PLAN .. just gut higher education.. its just 'an efficiency' .. Smacks of Stephen Harper trashing The Small Lakes Experimental Centre as soon as he had his Election Fraud majority. Muzzling of science and biology followed, as did gutting of Environmental Protection Legislation.
I see Trump & scum et al are following that plan now.. wiping out Protected Species legislation, that saved the Bald Eagle from extinction. Perhaps the NRA will now hype shooting the iconic American symbol out of the skies for sport and trophy !
Whether it's Conservatives past or present in Ontario, or the kind that call themselves Republicans, sal, it's pretty clear that they view education -- and knowledge in general -- as dangerous. Beware the person who knows how to think. Like Samson, he or she can bring the house down.
And in BC, education has become just another expensive commodity like in the USA, Sal. Also adding to and compounding the problem is that foreign students are given higher priority when it comes to access to required courses for even an under grad degree! The excuse being that they pay much more for their courses than the children whose parents live here, pay taxes here, and paid for the institution of "higher" learning to be built.
It is now taking 6 years to get a 4 year Bachelor degree and often that includes taking courses in the summer, all the while working at part time jobs so that they don't have a huge debt when they graduate. Of course, many of those part times jobs were at fast food places which now are occupied by Temporary Foreign Workers (who are guaranteed 40 hrs a week).
Its the conservative way... and not just the ReformaCons, but most Liberals as well.
Neo-Liberalism has become the conventional wisdom, Lulymay. And it's as expensive as it is wrong-headed.
What most people don't know is how the tax system works in Scandinavia.
All social programs are funded by income tax on workers, hence the problem they face with large numbers of outsiders expecting to use the system for free but never contributing to it. The human capacity for sharing always has a limit. The system is designed to provide the desired services as long as there is enough tax to cover it.
The flip side is that all non social costs come from sales tax, business tax, etc. but business has no say in social programs and cannot complain about taxes and influence the government to reduce programs.
It would be fun to see how many business subsidies and clean up costs for mining, forestry and clear cut logging as well as infrastructure costs that primarily help business all of Canadas companies would be happy to cover instead of workers. I suspect Walmart would demand changes next week not next month if they had to pay their share of the tar sands clean up as well as the corporate welfare.
I'm quite sure that most businesses would object to paying social costs, bill. I suspect they see taxes as costs on individuals, not groups.
Welcome to Louisiana north. It was Louisiana, a state with the lowest education funding in America, where voters strongly supported a ballot initiative to slash education spending.And with such a poorly educated work force they wonder why they can't attract major employers.
You know how you can get an airlock in your car's brake line if the brakes aren't properly bled when the fluid is changed? We have something along the same lines with governance in this era of everyday low taxes. Today elections are won and lost based on irresponsible governance. It's another one of those self-defeating habits to which society has become powerfully addicted.
I am reminded of 2014 when the World Council of Disaster Management held its annual conference in Toronto at the same time much of Calgary was under water. Dr. Saaed Mirza, professor emeritus of structural engineering at McGill, warned that Canada needed to spend upwards of a trillion dollars to upgrade, repair and replace essential infrastructure, adding if we did not, it would cost us far more as neglected infrastructure failed. Worldwide the tab was estimated at $57 trillion. Have you seen any sign of that sort of money? You won't - "everyday low taxes" rules.
https://the-mound-of-sound.blogspot.com/2018/06/the-funny-thing-is-its-here-and-what.html
We know the problem. We know the risks and the consequences of inaction. We even know the solutions - and we're not interested, thank you very much. So, how do you imagine that ends?
That is why Neo-liberalism exists in our country Owen.
Businesses here pay business tax, half of CCP, half of EI, workmans comp. and many pay part of private health plans as well as job related training courses. If everything except business tax was moved to income tax leaving only business tax then they would have no influence over social policy. Indeed if sales tax covered infrastructure, military, judiciary and foreign affairs, this would mean business taxes would only have to cover the cost of government, environment and various business subsidies which would mean huge changes starting with lobbying in those areas. best of all they would be fully responsible for the clean up costs from their profits in the past.
It's not that we don't know what the solutions are, Mound. Sixty years ago we took it as a given that one of government's responsibilities was to build and maintain infrastructure. And we knew that investment reaped economic benefits.
We have ignored our own history, insisting that willful ignorance is the best policy.
Business knows that all of those brown fields and tailing ponds would cost more than the profits it makes, bill. Paying the bills they have run up would bankrupt them. It's vitally important that the policy of individualizing profits and socializing losses be neo-liberalism's first principle.
.. Owen nails it
taxpayers get nada of profits
but always pay the freight..
not to mention the cleanup bill
As higher education becomes further out of reach, will the extent to which it remains subsidized by governments increasingly be understood as a transfer of wealth to those who can still afford it and are least in need of assistance? Let's keep this in mind in anticipation of measures no doubt to be considered in furtherance of projects to "reform" elementary and high school education, such as government funded discount coupons for private schools.
The little people always get rained upon, sal. The rich can afford umbrellas.
I think you can expect vouchers in support of private education, John -- as the infrastructure which supports public education continues to crumble.
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