"It’s quite clever, talking about taxes rather than detailing the things that taxes actually pay for. Can I give you a list? Universal free medical care, free public education, heavily subsidized universities, policing, highways, roads, parks, old-age pensions, policing, garbage collection, national defence, and the list goes on."

It makes for a great headline. “The average Canadian family paid $39,299 in taxes last year, more than housing, food and clothing combined.”

Sounds awful, doesn’t it? That’s exactly what the folks at the Fraser Institute want you to think. The think tank is a pillar of Canada’s libertarian right, whose goal is to erode the welfare state and reduce taxes so that the capitalist system can carry on its merry way.

To do so, they’ve been engaged in a prolonged fight to demonize taxes and government in general and convince Canadians that they’re being gouged by taxes of all kinds. It mirrors the same effort by the right in the U.S. although in Canada, where people generally like their government and think it’s there to help, that’s proven to be a harder sell.

“Taxes, not life’s basic necessities, remain the largest household expense for families across the country,” according to Finn Poschmann, resident scholar at the Fraser Institute, in the recent news release making public The Canadian Consumer Tax Index.

According the institute, the average family spent 44.2 per cent of its income on taxes compared to 36.3 per cent on “basic necessities.” And it says that the tax bill has gone up by 2,246 per cent since 1961.

It’s quite clever, talking about taxes rather than detailing the things that taxes actually pay for. Can I give you a list? Universal free medical care, free public education, heavily subsidized universities, policing, highways, roads, parks, old age pensions, garbage collection, national defence, and the list goes on. I don’t know about you but every one of those things is a necessity as basic as clothing and rent in a modern society, though not in the institute’s eyes.

The other thing the Fraser Institute does to get this big number is that it adds up every tax paid by individuals and corporations, from income to alcohol and corporate taxes and then allocates the number to the “average Canadian family.” As the institute explains, “Average Canadians also pay the taxes levied on business. Although businesses pay these taxes directly, the cost of this taxation is ultimately passed unto ordinary Canadians.”

Of course, the Institute hasn’t bulked up family incomes with the incomes of corporations. We just pay their taxes. Since it doesn’t matter how taxes are collected, according to the institute, I’d like to see their reaction if a future government decides to double corporate taxes or employer payroll levies. My guess is that they’ll warn about the catastrophic effect on Canada’s corporate competitiveness, rather than the impact on families.

And by taking an average, it pays no attention to the progressive nature of our tax system, which taxes high-income families more than middle or low-income ones.

In fact, Canadian tax rates overall have been pretty stable over the decades and compared to other advanced countries, our tax burden is on the low side. According to the latest statistics from the Organisation for Economic Cooperation and Development (OECD), the tax to GDP ratio in Canada actually decreased to 32.2 per cent in 2017 from 32.7 per cent in 2018, while the average of OECD countries rose to 34.2 per cent.

Canada is 24th out of 36 OECD in terms of tax to GDP ratio in 2017. Our tax take is higher than in the U.S. and Australia but I’m not sure that low tax ratios are something we want to blindly emulate. The lowest tax to GDP ratio is recorded by Mexico, at 16.2 per cent, the sign of a developing country with poor public services and a very weak education system. And our taxes are much lower than in places like France, Denmark and Belgium.

Actually, Canadians get a pretty good deal on taxes. Our single-payer health care system is much more efficient than the one in the U.S. We spend 10.2 per cent of our GDP on health care, compared with a gob-smacking 16.9 per cent south of the border and we have a longer lifespan as well. When it comes to post-secondary education, Canada has the highest education attainment levels in the OECD with 56.7 per cent of Canadians holding a post-secondary degree, 10 points higher than in the U.S. And we pay for much of that with our taxes.

And if you take a close look at the Fraser study, you’ll actually find a remarkable stability in the tax take. The latest news release screams that 44.2 per cent of family income, according to Fraser’s calculations, went to taxes in 2018 but in fact that’s below the comparable tax take in 1985 when it was above 45 per cent. The figure has bounced around over time and risen slightly in recent years but it’s still below the comparable figures from 1998 to 2006. So there’s actually no real story here.

The Fraser Institute can only justify its scare story by comparing the tax take in 2018 with that in 1961, when the statistics begin. That’s the big conclusion of the report. “The results show that the tax burden faced by the average Canadian family has risen compared with 57 years earlier.”

Do we really want to go back to 1961, before the days of Medicare, the Canada Pension Plan and much of Canada’s social safety net? To the days when a post-secondary education was the purview of the few? That might work well for the well-heeled backers of the Fraser Institute. Not so much for the rest of us.

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