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

Open houses regarding transit between Penticton and Kelowna

The meetings will be held in Summerland, Princeton, Penticton, Peachland and Osoyoos on Dec. 4 and 5

Third fatality in 24 hours on South Okanagan roads

A vehicle incident closed Highway 3 for five hours Monday night

CONTEST: New year, new you

KimXO has partnered with Black Press Media and Third Space for a brand new contest

School Powwow fundraiser happening in Keremeos

Fundraiser for school powwow including students from Princeton, Keremeos, Osoyoos set for Nov. 29

South Okanagan Similkameen leading in referendum ballot returns

Pro Rep group offering Nov. 22 information session

VIDEO: B.C. legislature clerk, sergeant at arms suspended for criminal investigation

Clerk of the House Craig James, Sergeant-at-arms Gary Lenz on administrative leave

Former NHL player and coach Dan Maloney dies at 68

Maloney coached the Toronto Maple Leafs and Winnipeg Jets

Ex-MSU president charged with lying to police about Nassar

Lou Anna Simon was charged Tuesday with lying to police during an investigation

Police aim to prevent retaliation after Hells Angel found dead under B.C. bridge

IHIT confirms Chad Wilson, 43, was the victim of a ‘targeted’ homicide

Otter makes a snack out of koi fish in Vancouver Chinese garden

Staff say the otter has eaten at least five fish

Police looking into two more incidents at private Toronto all-boys’ school

Police and the school have said two of the prior incidents involved an alleged sexual assault

B.C. lumber mills struggle with shortage of logs, price slump

Signs of recovery after U.S. market swings, industry executive says

25% of Canadians still won’t say they use pot, survey says

Statistics Canada poll says Canadians on average were 18.9 years old when they first tried pot.

Canucks’ 50/50 jackpot expected to surpass $1 million

The guaranteed prize for one lucky winner will be $500,000 minimum when Vancouver hosts LA Nov 27

Most Read