Social Policy in Ontario

Too much government

Posted on January 29, 2010 in Inclusion Debates

Source: National Post — Authors: Lorne Gunter

Once, early in my journalistic career, I interviewed a U.S. historian about the causes of the American Revolution. At the time, Quebec separatism was hot, and I was trying to construct a story showing that Quebecers had little to complain about in Confederation, at least financially.

Quebec’s government, despite being the richest of the have-not governments for most of the past half century, is the recipient of half of all equalization payments. Quebec comes ahead by $8-billion to $10-billion per year in terms of what its taxpayers pay into the federal treasury versus what its citizens and governments receive in return.

The American colonists, by comparison, felt they were groaning under a crippling tax burden. Many of their staples, they felt, were onerously taxed while they received little from England in return and had no say in how large the levies against them would be.

My point was: Quebec, a net beneficiary of Confederation, was chomping at the bit to break up Canada, while, compared to the 13 colonies, they had little to complain about.

So out of curiosity, I asked the historian what the level of taxation was in 1776 that caused the U.S. to declare its independence.

I will always recall his answer: “the equivalent today of about 5% to 7% of their income.”

What?

Today, in Canada, all levels of government, through all their taxes, can confiscate as much as half or more of a taxpayer’s income, in total. Income taxes, pension claw-backs, the GST, gasoline excise taxes, import duties and tariffs, estate taxes, property taxes, capital gains and on and on and on.

And yet, like the abused spouse rushing back to an abuser, many Canadians continue to sing the praises of ever bigger and bigger government. They rush to it in any crisis looking to be saved, whether through “free” health care during times of personal crisis or through auto company bailouts that demonstrate solidarity with distant workers in distant communities during times of global crisis.

Government is far too big, especially considering that no matter how much more money it consumes, it never seems to solve any of the problems it claims can be eradicated by higher taxes. For instance, Canadian governments have spent over $1-trillion on welfare since 1970 and yet nearly every government claims the poverty problem is worse than it was then. If I had spent the equivalent of one year of my salary on cures that didn’t fix my ills, I might rightly be considered insane for arguing that I had failed to spend enough. Yet tens of millions of Canadians have thoroughly convinced themselves that we have too little government and too-low taxes

Were John Adams or Ben Franklin or Thomas Jefferson to show up in today’s world, he would immediately be calling for his fellow citizens to take up their muskets and throw off their tyrants.

All of which is a long-winded way of saying that while I agree with the Canadian Taxpayers Federation (CTF) that there are many ways to make government and bureaucrats more efficient, government must first be made very much smaller.

On Thursday, Colin Craig, the CTF’s Prairie-region director, lauded the Saskatchewan government for promising to make 10% budget cuts across the board this coming year. He then suggested Premier Brad Wall consider what is called in government circles “managed competition” — essentially putting public services from road building to garbage collection to prisons out to tender and permitting both public servants and private companies to bid.

In some cases — such as fire fighting in Phoenix, Ariz., and road repair in Indianapolis — salaries and productivity have gone up under managed care, while costs and delays have come down because the bureaucrats’ winning bids have “unshackled bureaucratic potential” (as experts like to say). The profit motive has spurred public servants to apply creative solutions to problems they have combatted for years.

And while Mr. Craig is undoubtedly correct about the desirability of finding ways to incite bureaucrats to be as productive as can be, given that the civil service in Canada has grown by more than a third in the past decade and threatens to grow another 10% or more while Ottawa and the provinces attempt to save us from recession, what is really needed is not only more efficient government, but first far, far less government.

National Post
lgunter@shaw.ca

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