New poll shows Canadians prefer spending cuts over capital gains tax hike
The Trudeau government is like a band that only knows one tune: higher taxes and spending.
The government recently imposed a capital gains tax hike. Part of the rationale for the hike is to reduce the debt burden on future Canadians.
“Canada could finance these critical investments by taking on more debt, but that would place an unfair burden on younger generations,” Finance Minister Chrystia Freeland said as she announced her capital gains tax hike. “Fiscal responsibility matters.”
But if the government is worried about deficits and debt, couldn’t it cut wasteful spending instead?
The Canadian Taxpayers Federation commissioned a Leger poll asking Canadians if they would rather the government increase capital gains taxes or reduce spending to rein in the deficit.
 Photo by Matt Artz |
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The poll shows that 54 percent of Canadians prefer the government to cut spending, while only 23 percent prefer the capital gains tax increase. Twenty-three percent of Canadians are unsure.
Among those who are decided on the issue, 70 percent of Canadians prefer reducing spending to increasing capital gains taxes.
Here’s where the government should cut:
Corporate welfare. Want the rich to pay more? Start by making rich multinational corporations pay for their own factories instead of putting taxpayers on the hook for about $30 billion to multinational corporations like Honda, Volkswagen, Stellantis, and Northvolt. The Trudeau government has also announced more than $600 million for the Ford Motor Company, $551 million for Umicore, $420 million for Algoma Steel, $110 million for Toyota, $372 million for Bombardier and $12 million for Loblaws, among others.
According to the Fraser Institute, federal corporate subsidies totalled $11.2 billion in 2022. That’s more than double what the government spent on corporate subsidies in 2015, even after accounting for inflation. And it’s $4.2 billion more than the federal government will bring in through the capital gains tax hike this year.
The bureaucracy. The government must also take air out of its ballooning bureaucracy, which consumes more than half of its day-to-day spending. The government’s payroll hit a record $67 billion last year, increasing 68 percent since 2016.
The reason for the spike? A bigger bureaucracy collecting bigger paycheques.
The Trudeau government has hired about 100,000 bureaucrats since 2015. It also rubberstamped more than $1.5 billion in bonuses, despite the Parliamentary Budget Officer finding “less than 50 percent of (performance) targets are consistently met.” And it dished out more than one million pay raises over the last four years.
Crown corporations. The government should sell off Crown corporations, such as the CBC, which costs taxpayers more than $1 billion every year and competes with media companies. VIA Rail should be on the chopping block. The feds shovelled $1.8 billion at the failing Crown corporation over the last five years just to cover operating losses.
Canada should also follow the lead of countries like the United Kingdom, Sweden, the Netherlands, Germany, New Zealand, and Portugal, which have fully or partially privatized postal services. According to its annual report, Canada Post lost $748 million last year and $548 million in 2022 and forecasts “larger, unsustainable losses in future years.”
There are countless other examples of government waste – a list too long to fully list here. Here are just a few examples:
The National Capital Commission spent $8 million building a barn at Rideau Hall. Parks Canada is spending $12 million hunting deer on one island. Three “affordability” cabinet retreats in one year cost more than $1 million.
Balancing the budget would only require modest restraint. In fact, the government could balance the budget this year if it stuck to its own spending plan from just two budgets ago. Even if you remove the extra capital gains tax cash, the deficit would be $5.5 billion, not $40 billion.
There are two key takeaways. First, Canadians are fed up with tax hikes and want less government spending. Second, there’s no shortage of places to cut.
The government should listen to Canadians, stop hiking taxes and cut spending.
Franco Terrazzano is the Federal Director of the Canadian Taxpayers Federation.
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