The Trudeau government is like a band that only knows one tune: more spending/higher taxes.

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Opinion: Canadians are tired of Ottawa’s over-taxing and high spending Back to video

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It recently imposed a capital gains tax hike. Part of the rationale was 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 in announcing the increase. “Fiscal responsibility matters.”

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But if the government is really worried about deficits and debt, couldn’t it cut wasteful spending instead? At the Canadian Taxpayers Federation, we commissioned a Leger poll asking Canadians that very question. The response was that 54 per cent of us prefer the government to cut spending, while only 23 per cent favour the capital gains tax increase. The rest were unsure.

That 54/23 breakdown means that among those who do have an opinion, 70 per cent of us — more than two to one — prefer reducing spending to increasing capital gains taxes.

Here’s where the government should cut:

If it wants the rich to pay more, start by making multinational corporations and their shareholders pay for their own factories. Instead, the feds have put taxpayers on the hook for about $30 billion in subsidies to big firms like Honda, Volkswagen, Stellantis and Northvolt. The 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 totaled $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 Ottawa will bring in through the capital gains tax hike this year.

The government also needs to take air out of its ballooning bureaucracy, which consumes more than half its day-to-day spending. Payroll hit a record $67 billion last year, up 68 per cent since 2016. The reason for the spike? A bigger bureaucracy collecting bigger paycheques. The Trudeau government has hired about 100,000 more bureaucrats since 2015. The feds also rubber-stamped more than $1.5 billion in bonuses, despite the Parliamentary Budget Officer finding “less than 50 per cent of (performance) targets are consistently met.” And it dished out more than a million pay raises over the last four years.

The government should sell off Crown corporations such as the CBC, which competes with media companies and costs taxpayers more than $1 billion every year. VIA Rail should be on the chopping block, too. The feds shovelled $1.8 billion at the failing Crown corporation over the last five years just to cover its operating losses.

Canada should follow the lead of countries like the United Kingdom, Sweden, the Netherlands, Germany, New Zealand and Portugal, which have fully or partially privatized their postal services. Canada Post lost $548 million in 2022 and $748 million last year and forecasts “larger, unsustainable losses in future years,” according to its annual report.

Among the almost countless other examples of government waste: the National Capital Commission spent $8 million building a barn at Rideau Hall; Parks Canada is spending $12 million hunting deer on one B.C. island. Three “affordability” cabinet retreats in the space of about a year cost more than $1 million. Prime Minister Justin Trudeau and his entourage racked up a $220,000 in-flight catering tab during a week-long tour of the Indo-Pacific last September — after the government had promised to cut down on these costs. Federal departments and Crown corporations are spending millions branding trinkets and other merchandise.

Balancing the budget would only require modest restraint. In fact, the government could do it this year if it simply stuck to its own spending plan from just two budgets ago. Even if you remove the extra cash from the capital gains tax, the deficit would be $5.5 billion, not $40 billion.

There are two key takeaways here. 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 instead cut spending.

Financial Post

Franco Terrazzano is federal director of the Canadian Taxpayers Federation.

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