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

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Public will have input on changes to interior of Ashcroft Library

Local libraries also offering new takeout service as they work toward reopening

BC SPCA team helps discover new feline virus after outbreak at Quesnel shelter

Fechavirus is a kind of parvovirus, which makes cats and kittens very sick

No Cache Creek tax increase for 2020, but Village’s cash reserves a concern

Cache Creek held a special council meeting to discuss its 2020 budget… Continue reading

Village of Ashcroft announces appointment of new CAO

Daniela Dyck has accepted the position effective June 7

High tech fish transport system set up to ‘whoosh’ salmon past Big Bar landslide

Fish will spend about 20 seconds inside the system, moving at roughly 20 metres per second

VIDEO: Injured bald eagle rescued in B.C. First Nations community

Bird suspected injured in fight, whisked off to Coquitlam rehab

‘I’m afraid’: Witnesses of wolf attack on senior near Prince Rupert worried about safety

Frank Russ shows where the unprovoked wolf attacked his father

Protesters prepare to rally against racism in front of Vancouver Art Gallery

Rally is in response to the deaths of black Americans and a Toronto woman

Protesters rally against anti-black, Indigenous racism in Toronto

Police estimated the crowd to be between 3,500 and 4,000 and said there was no violence

Feds earmark $1.5M to support recovery of B.C., Indigenous tourism

B.C. money will be split between Vancouver Island and Indigenous tourism

‘We’re sick of it’: Anger over police killings shatters U.S.

Tens of thousands marched to protest the death of George Floyd

Surrey mayor’s party under fire for ‘sickening’ tweet accusing northern B.C. RCMP of murder

Mayor Doug McCallum says tweet, Facebook post ‘sent out by unauthorized person’

Father’s Day Walk Run for prostate cancer will be virtual event this year throughout B.C.

The annual fundraiser for Prostate Cancer Foundation BC has brought in $2.5 million since 1999

Most Read