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The gift we give each other

June 5, 2012

By Trish Hennessy

It can be easy to forget that taxes, while paid grudgingly, were never quite so vilified as they are today.

When my mother was born on the dusty Prairies in the heart of the Great Depression in 1935, Canadians didn’t know what a healthy, widespread middle class was like because it hadn’t yet been established.

They didn’t know income supports such as Employment Insurance or public pensions, because those didn’t exist yet either.

They didn’t know higher learning, because universities were then the domain of the very privileged few.

And they didn’t know a universal public health care system would one day become synonymous with what it means to be Canadian.

These, and many other cherished public services, didn’t exist the year my mother was born. But in a single lifetime, the world changed. By the time my mother was raising a young family, incomes in Canada were growing, jobs were aplenty, income inequality was narrowing, the physical infrastructure needed to support burgeoning cities had been laid down, and public programs that improved our quality of life had become part of the social fabric.

These were made possible not by the generosity of a few wealthy sponsors. Rather, we as Canadian citizens pooled our resources to fund this better life together. For ourselves, for our children, and for each other. We were taxpayers but, first and foremost, we were social citizens investing in one another and in our future.

There was pride in that investment. While we knew we couldn’t yet compare with more equal advanced societies such as Sweden and Norway, we saw that we were more equal and sharing in our prosperity than were our neighbours to the south, the United States.

We believed not just in the theory that one could go from rags to riches in a single lifetime; we also believed that our children and grandchildren would do better than their parents. That was the social bargain we had entered into with our governments, who were tasked with creating and protecting social programs and income supports that made Canada an enviable place to live.

Then, in the 1990s with a recession to contend with, Canadians were asked to share in the sacrifice of dealing with our governments’ fiscal deficits. There would be cuts to public programs in the short term. That was the ‘belt-tightening’ effort required to protect what we cherished. Things went downhill from there.

By the mid- to late-1990s, as the economy slowly recovered, a new era of politics took root in Canada: One that put the needs of the market ahead of the needs of the people; one that reduced governments to mere cash dispensers, promising tax cuts at every opportunity in hopes of buying a vote.

In focus group research, I’ve noticed with interest that most Canadians cannot put a price tag on the amount of tax cuts we’ve received. They would likely be surprised to know that, based on OECD data, the amount of revenue as a percentage of GDP has dropped from 36% in 1995 to 33%, the equivalent of nearly $50 billion annual loss in tax revenues that once paid for infrastructure, income supports, public services, education and health care.

Nearly $50 billion a year lost in the ether.

$41,000. That’s average amount middle-income Canadian families enjoy in public services that their taxes fund. It’s worth about 63% of their income.

You know what I find even more surprising? When Environics Research asked Canadians what they do that makes them feel like a good citizen, the most popular answer was ‘volunteer’, the second most popular response was ‘be kind/generous to others’, and the third answer? Pay taxes.

Taxes: The gift we give each other. With the help of Interlocutor Communications, sponsored by the Canadian Centre for Policy Alternatives and the Sécretariat Intersyndical des services publics, I made a really short video about it. If you love the public services our taxes fund, please pass it on.
The English version
The French version
  1. mikeb4 permalink
    June 12, 2012 2:31 pm

    Hi Trish: I came to this post from you inequality post at Rabble. I think the issues are intertwined. It is nice to see someone approaching this as you have done. If we all thought more about the fact that “we” are all Canada and all our actions are intertwined.

    The reduction of tax/GDP does not concern me as such, except that people use it as an excuse to cut programs. Canada is a sovereign country that issues its own currency, we can spend on whatever we choose to. Federal government borrowing is a relic of the gold standard era. Yes, there is potential inflation, but I think we are a very long way from that given our output gap (unemployment). I’ve come to visualize taxes not as money to be collected to spend per se but as a mechanism to remove purchasing power from the private sector which allows room for government spending without causing inflation.

  2. mikeb4 permalink
    June 12, 2012 2:35 pm

    sorry kind of broken 1st paragraph, should read something like: If we all thought … we’d all be better off. Its a big village, but its still a village.


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