Taxes: we hate them, but…

By Patrick Hunter Thursday August 07 2014 in Opinion
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We have just completed an election process to elect a new provincial government in Ontario. We are about to embark on another to elect new mayors and councillors for municipal governments in the province. And, next year, we will be asked to do the same at the federal level.


A “watchword phrase” of all political campaigns, probably everywhere in the world, is “cutting taxes”. Ontario and Canada are no different.


To begin with, let me give some credit to a recent re-broadcast of a discussion on CBC’s Sunday Edition with Eugene Lang, a former senior level advisor to governments on economics. The focus of the discussion was about taxes and what I would characterize as “the unfair rep that taxes have earned”.


Sure, we all hate the idea of paying taxes, especially when it seems like we are paying too much. But what I have found is that a lot of people have failed to make the connection between taxes and services that we have come to enjoy and expect.


Yes, quite often there are abuses. The government appears to spend money feathering their proverbial nests and having a good time. And we latch on to those mis-directions and misappropriations as proof as to why there should be less government and less taxes. The recent situation in Ontario of the McGuinty government’s cancellation of gas plants and the ever-growing costs of those cancellations give credence to this argument because it was done for political purposes.


However, it is worth looking at the other side of the coin. Taxes go towards supporting our means to getting to work. They go towards filling in those potholed roads that we often complain about, or re-paving when they desperately need to be. They go towards making sure that we have clean water coming through our taps and that our wastes go where they should instead of the outhouse at the back of the house a few yards away.


They go towards ensuring that, yes, our neighbourhoods are somewhat secure and that, if there are violations of that security, there are processes in place that will provide a level of punishment for those violations.


They go towards supporting a healthcare system that allows us to walk into a doctor’s office and be attended to, walk out and not pay a dime. The same with hospitals. They also help us to support a network of affordable housing.


The list is long. Imagine what life would be like if many of these amenities were unavailable. Ontario expects to spend close to $82 billion in the current fiscal year, ending in March 2015. Of that amount for the top four, health and long-term care is expected to spend nearly $35 billion; education, $20 billion; community and social services, $8 billion, and training colleges and universities, $5 billion.


It is important to note that for municipal affairs and housing, the estimate is $655 million. One reason for that “low” figure is that municipalities are allowed to tax…property, water and waste management, among other services.


The fact is that someone has to pay for these services. We do. And the collection of politicians that we elect to manage the maintenance of these services sometimes make a mess of things, but we have to admit that, for the most part, most of these things work pretty well.


It is also important to be aware that many of these expenditures are monitored. All three levels of government have an independent auditor who reviews the expenditures of government departments. In some cases, we only hear about some of the major “mis-directions”. But, for the most part, there is an accounting of how the money is spent and that is when we hear about monumental amounts of money we are paying for a glass of orange juice or a cup of coffee that we didn’t drink.


One of – and I emphasize “one of” – the most frustrating things for me is the failure of researchers and engineers in coming up with a better solution for paving roads that will withstand the harsh winter conditions we experience.


On the other hand, one of the reasons for the bad streets is also the fact that much of a city’s infrastructure are buried under those streets and, in Toronto, there is a massive undertaking to upgrade those older network hardware with hopefully more durable hardware. Add to that the heavy uses of those thoroughfares and, gradually, changes happen to the surfaces. At the same time, however, I often wonder whether contractors use mediocre materials as a way of ensuring the continuity of their contracts.


All this is to say that while I am enticed by the idea of lower taxes, like you are, be cautious of those promises during upcoming elections. Cuts in taxes often mean cuts in programs that we rely on, sometimes heavily. Be very wary of people who claim to want “to stop the gravy train”. @pghntr

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