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Government services faltering despite Ottawa’s tax hikes

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4 minute read

From the Fraser Institute

By Matthew Lau

Compare this growth of almost 50 per cent to the growth rate of private-sector employment—from 2015 to 2023, combined growth for the private sector and self-employment was about 11 per cent.

According to a study published by the Fraser Institute, 44.6 per cent of the average family’s income will be consumed by taxes of all kinds in 2024. Thus June 13—which is 44.6 per cent of the way through the year—was “Tax Freedom Day.” In other words, on average, the work done and income earned from January 1 to June 12 is consumed by government. This tax bill, most Canadians believe, is too high, but alas a tax-happy federal government is unlikely to provide relief.

Indeed, the Trudeau government recently made another effort to push Tax Freedom Day further back into the year with its increase to capital gains taxes, adding to its long record of tax increases since coming to office in 2015. The list of tax hikes includes a new top income tax bracket in 2016, the carbon tax first imposed in 2019 and increased every year since, five consecutive annual Canada Pension Plan tax hikes from 2020 to 2024, special taxation of financial institutions imposed in 2022, continued threats of special taxation of grocery stores, and announced plans for a tax on share buybacks.

With such enthusiasm for tax hikes, it cannot be a surprise that since the Trudeau government took office in 2015, the number of employees at the Canada Revenue Agency increased from around 40,000 to almost 60,000 by 2023. Compare this growth of almost 50 per cent to the growth rate of private-sector employment—from 2015 to 2023, combined growth for the private sector and self-employment was about 11 per cent.

But alas, all these new taxes and government growth have not yielded positive results. From the third quarter of 2015 to the first quarter of 2024, growth in real GDP per-person (a common indicator of living standards) was less than 1 per cent cumulatively versus nearly 16 per cent in the United States. The productivity improvements that deliver sustainable economic growth rely on business investment, but that has badly stalled in Canada, too. Since the third quarter of 2015, real business investment in machinery, equipment and non-residential structures is down about 19 per cent on a per-person basis.

Nor have Canadians received improved government services as a result of higher taxes.

Health access is getting worse, with wait times for medical care continuing to increase. And even the Liberals have effectively admitted their national child-care program, which they began implementing in 2021, has created widespread shortages.

Similarly, on two core federal government functions—public safety and national defence—even as Canadians pay new and higher taxes, outcomes are dismal. Crime is rising and Canada’s military readiness is “dangerously inefficient.” In fact, at the end of last year the commander of the Royal Canadian Navy said it “faces some very serious challenges right now that could mean we fail to meet our force posture and readiness commitments in 2024 and beyond” and that “the air force and the army are facing similar challenges.”

And Canada’s passport offices continue to be in a state of disarray and the federal government has missed its own deadline for allowing Canadians to renew passports online.

Polling data show Canadians believe they pay too much tax. No one should be surprised. The Trudeau government’s new and higher taxes have contributed significantly to the country’s stagnating economy and declining business confidence, and have been accompanied by deteriorating government services across the board. Raising taxes won’t make things any better. Cutting taxes would.

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Economy

Trump’s Promise Of American Abundance, Fueled By ‘Liquid Gold’

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From the Daily Caller News Foundation

By JAMES P. PINKERTON

 

One of the brightest nuggets of policy in Donald Trump’s July 18 acceptance speech to the Republican convention in Milwaukee was his ode to “liquid gold.” That is, oil.

As part of his inflation-fighting plan, Trump offered a gleaming solution: increase energy production, thereby decreasing energy prices. “By slashing energy costs,” Trump declared, “we will in turn reduce the cost of transportation, manufacturing and all household goods.”

He continued: “We have more liquid gold under our feet than any other country by far. We are a nation that has the opportunity to make an absolute fortune with its energy.”

Indeed. According to the Institute for Energy Research (IER) technically recoverable oil resources in the U.S. total 2.136 trillion barrels. At the current price of around $80 a barrel, that’s some $171 trillion. And so, Trump concluded, “we will reduce our debt, $36 trillion.”

As former Alaska governor Sarah Palin would say, “You betcha.” In Palin’s Alaska, oil is so abundant, relative to the population, that everyone gets a check from the state. Last year, it was $1,312. For a family of four, that’s more than $5000. Our goal should be that every American gets such an energy dividend.

Moreover, the abundance of America’s carbon fuels is not limited to oil. According to IER, we have 3.391 trillion cubic feet of natural gas. That’s worth $165 trillion.

To be sure, these staggering dollar totals can’t be counted directly against the national debt—or in support of some future tax cut. Yet every dollar of our energy assets would contribute to the economy, and if even 10  percent of the humongous total could be available to the public, we could, in fact, pay off the national debt.

Moreover, thanks to fracking and other enhanced recovery techniques, we keep finding more energy: Human ingenuity has upended old beliefs about energy shortages, ushering in an almost Moore’s Law-ish surge in production.

Indeed, there’s so much oil and gas (and coal) that an emerging school of thought holds that carbon fuels aren’t “fossil” at all, but rather, the product of earth’s vulcanism. The core of this earth, after all, is the same temperature as the surface of the sun. Perhaps all that heat is cooking something.

In any case, we keep finding more oil, and not just in the U.S.

So how, exactly, do we take advantage of this planetary cornucopia? As Palin said, as Trump said, and as the convention crowd chanted, “drill, baby, drill.”

Okay, but what about climate change? Most Republicans don’t worry too much about that, but if Democrats do, they should be reassured that we can capture the carbon and so take it out of the atmosphere. Trees and other green vegetation have been capturing carbon for eons; the element is, in fact, vital to their very existence. Similarly, the human body is 18 percent carbon. Yes, all of us ourselves are carbon sinks.

So we, being smart, can capture vastly more carbon — capturing it in everything from wood to cement, from plastics to nanotubes. These in turn can be landfill, construction materials — maybe even a space elevator.

We can, in fact, establish a a circular carbon economy: carbon fuels extracted, burned, and then recycled back into feedstocks. By this reckoning, carbon fuels are renewable. Such creative thinking can power all those energy-hungry data centers on which Big Tech and AI depend. So there’s the makings of a bipartisan “Grand Carbon Bargain,” uniting mostly blue-state tech with mostly red-state energy. More energy + more tech = more wealth for all.

In Milwaukee, Trump spoke of American “energy dominance,” and that’s great. But with all the energy we can produce and consume, we can speak of economic abundance — and that’s even greater.

James P. Pinkerton served in the White House domestic policy offices of Presidents Ronald Reagan and George H.W. Bush. He is the author, most recently, of “The Secret of Directional Investing: Making Money Amidst the Red-Blue Rumble.”

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armed forces

Trudeau pledges another $500 million to Ukraine as Canadian military suffers

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From LifeSiteNews

By Clare Marie Merkowsky

Despite the nation’s own armed forces grappling with an alarming recruitment crisis, Justin Trudeau and his government have poured over $13.3 billion into Ukraine.

More Canadians tax dollars are being sent overseas as Prime Minister Justin Trudeau has promised an additional $500 million in military aid to Ukraine. 

During a July 10 meeting with Ukrainian President Volodymyr Zelensky, Trudeau announced that he would send another $500 million to Ukraine as it continues its war against Russia, despite an ongoing decline in Canada’s military recruitment.  

“We’re happy to offer we’re announcing today $500 million more military aid this year for Ukraine, to help through this very difficult situation,” Trudeau said. 

In addition to the $500 million, Canada will also provide much of Ukraine’s fighter jet pilot training as Ukraine receives its first F-16s. 

Trudeau’s statement comes after Canada has been under fire for failing to meet NATO’s mandate that all members commit at least two percent of their gross domestic product (GDP) to the military alliance. 

According to his 2024 budget, Trudeau plans to spend $8.1 billion over five years, starting in 2024-25, and $73.0 billion over 20 years on the Department of National Defence.   

Interestingly, $8.1 billion divided equally over five years is $1,620,000 each year for the Canadian military. Therefore, Trudeau’s pledge of $500 million means he is spending just under a third on Ukraine compared to what he plans to spend on Canadians.  

Indeed, Trudeau seems reluctant to spend money on the Canadian military, as evidenced when Canadian troops in Latvia were forced to purchase their own helmets and food when the Trudeau government failed to provide proper supplies.  

Weeks later, Trudeau lectured the same troops on “climate change” and disinformation.       

However, at the same time, Trudeau readily sends Canadian tax dollars overseas to Ukraine. Since the Russia-Ukraine war began in 2022, Canada has given Ukraine over $13.3 billion, including $4 billion in direct military assistance.    

In May, Trudeau’s office announced $3.02 billion in funding for Ukraine, including millions of taxpayer dollars to promote “gender-inclusive demining.”  

Trudeau’s ongoing funding for Ukraine comes as many Canadians are struggling to pay for basics such as food, shelter, and heating. According to a recent government report, fast-rising food costs in Canada have led to many people feeling a sense of “hopelessness and desperation” with nowhere to turn for help.  

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