Politicians and their governments love to take credit for a booming economy or for taking action on social issues, but both are influenced more by the actions of individuals and communities rather than by MPs or MPPs.
Yet one part of the economy in which politicians do have a direct influence is taxation. They establish budgets, they decide how much public money is spent, and they decide the level of taxation.
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And so it’s interesting to observe that, in the months leading up to the federal election, not a lot of attention has been placed on federal taxation and its impact on Canadians and their families. Issues such as immigration and the environment are important – and one could argue that both could become bigger indicators of progress and success for individual Canadians and their families – but taxation and its impact on household incomes can be better defined, and the impact is immediate.
The sad fact is that a great many Canadians, even within a booming economy that features an unemployment rate that is the lowest in decades, are struggling. Housing is a primary concern. The cost of shelter has become extraordinarily expensive, and a greater part of an individual’s or family’s income is being devoted to rent or mortgage payments than ever before.
Food is also becoming more expensive, as is the cost of energy. Both are indicators of a healthy economy, but incomes just aren’t keeping up. As a group, the nation has never been wealthier, and yet the cost of living has become a daily challenge for too many Canadians.
Government and politicians can do only so much to alleviate this pressure, but something that is their responsibility is taxation. And Canadians are spending more of their income on taxes than ever before.
Fraser Institute economists routinely examine the taxation challenge. They now report that in 2015 the average Canadian family devoted 43.1 per cent of its annual income to various taxes. Those taxes obviously weren’t all federal; there were also provincial and municipal taxes. But the amount of taxes that Canadian families paid in 2018 in total had risen to 44.2 per cent of annual income.
Economists Jake Fuss and Milagros Palacios report that, “To put this in perspective, housing costs (including rent and mortgage payments) for the average Canadian family totalled $19,134 or 21.5 per cent of its income. In other words, the average family spends more than twice the amount on taxes than it does on housing.”
Canadians should be working to support their families, not governments.
The environment and immigration are important issues, but for most Canadians the challenge of meeting their financial obligations is something they think about daily. And so should our politicians.
–– Peter Epp