B.C. VIEWS: Perils of an ‘entitlement state’

Quebec is Canada's Greece, Ottawa subsidizes pizza parlours and other harsh realities of our economic situation

Occupy Victoria squat

VICTORIA – With the B.C. and federal governments once again struggling to climb out of deep operating deficits, it’s a good time for the release of Mark Milke’s book Tax Me, I’m Canadian.

An update of the same title published 12 years ago, the book retains the history of taxes in Canada, detailing how Canada’s tax system was initially built to mimic the United States system in the late 19th century.

Beyond the history, it is mostly new material. Included are chapters on the global meltdown of 2009, the surge of pension liabilities as the baby boomers retire and the flawed logic behind the “Occupy” and “Idle No More” protests.

Some readers will immediately note that Milke works for the Fraser Institute and was previously B.C. director of the Canadian Taxpayers’ Federation. But the book is not just an argument for cutting taxes. It also dismantles persistent myths that income taxes are illegal, and launches a broadside on what Milke calls “Canada’s corporate welfare carnival.”

Many people will be able to identify some top names in the government subsidy game: Bombardier, General Motors, even poor old Rolls Royce Canada. Some will also be well aware that our supposedly tight-fisted Conservative federal government has continued to pour out “regional development” and other funds to every part of the country.

But I did not know that Industry Canada grants were handed out to pizza parlours (including the remote pizza-starved village of Kamloops), or to help open gas stations or convenience stores in Kelowna, Vernon and Chilliwack.

Milke makes a useful point for B.C. about royalty rates for timber, natural gas and other resources. They are resource rents, and if they are too high the tenants will move out. Reducing them isn’t a subsidy, especially if it leads to big revenue gains as B.C.’s unconventional shale gas incentives have done.

On the Occupy movement: The infamous “one per cent,” who in Canada earn $250,000 a year or more, earned 10 per cent of all income and paid 20 per cent of all taxes in 2010. The bottom 73 per cent of tax filers paid just 17 per cent of all taxes. About a third paid no tax at all.

(My 2011 commentary on the B.C. Occupy squatters is here.)

On Idle No More: When Attawapiskat Chief Teresa Spence played to the Ottawa media with her soup strike, former Liberal leader Bob Rae suggested a nearby diamond mine should share more revenue.

Milke omits the substantial support and employment that mine provides, and glosses over the misguided blockades that disrupted that and other job-creating enterprises. But he does detail the disastrous effects of passive resource wealth bestowed on impoverished aboriginal communities, and contrasts it with the success stories of reserves that build their own enterprises through hard work.

On public sector pensions: Milke notes that historically, public employees traded higher wages for better benefits and job security. Now their wages are generally higher, and taxpayers have to cover their personal pension contributions (as a portion of those wages) as well as the employer contributions, plus the “defined benefit” payout, which has to be subsidized far beyond what the pension fund can support.

On the debt-financed welfare state, there are memorable observations, like this one: “For the record, the generous Quebec welfare state and its ostensibly more progressive model are paid for in part with the taxes of other Canadians; Quebec is merely the North American equivalent of Greece.”

The recent B.C. political crisis over adoption of the harmonized sales tax showed that there is too much emotion and too little knowledge about how taxes work. This book is a step towards addressing that.

Tom Fletcher is legislature reporter and columnist for Black Press and BCLocalNews.com Twitter:@tomfletcherbc

 

Just Posted

Virus wipes out half the chum fry at hatchery

The number of chum in the river this year won’t be affected

Fundraiser kicks off in honour of missing Terrace man presumed dead

David Kim, 45, went missing April 7 between Terrace and Prince Rupert

DoK wants to have more say in SO2 monitoring

“The EEM is not static and was always designed for periodic review”

Kitimat RCMP ready to test for drivers under the influence of pot

“Like standardized field sobriety tests, drug recognition is observation-based.”

Winter road maintenance standards boosted

Quicker response times to be implemented

VIDEO: Moose found licking salt off B.C. man’s pickup truck

Tab Baker was in his garage in Prince George when the small moose gave his truck a clean

B.C. student makes short-list for autism advocacy award

Brody Butts honoured for his role as a mentor and self-advocate

Austin Powers ‘Mini-Me’, Verne Troyer, dies at 49

Facebook page confirmed his death Saturday afternoon

Alberta man dead after snowmobile collision on B.C. mountain

The incident occurred on Boulder Mountain Friday morning

B.C. parents grieving teen’s overdose death say it started with opioid prescription

Elliot Eurchuk, 16, died at his Oak Bay home Friday, after taking street drugs

16 of 20 fastest improving B.C. schools are public: Fraser Institute

Independent elementary schools remain at top of the chart in think tank’s annual report card

NAFTA: Talks continue through weekend in scramble to get a deal

Foreign Affairs Minister Chrystia Freeland called negotiations ‘perpetual’

Pulp mill fined $900,000 for leaking effluent into B.C. lake

Mackenzie Pulp Mill pleaded guilty to depositing deleterious substance into water frequented by fish

B.C.’s 2-year lobbying ban starts May 1

Office of the Registrar of Lobbyists can grant exemptions from the prohibition if public interest

Most Read