by Troy Lanigan September 2009

Our former federal director John Williamson was fond of the quote "no public policy win is permanent, no defeat everlasting." Indeed, there is probably no better a quote to describe the vigilance with which public policy advocates must operate.

It’s hard to call a successful public policy campaign a victory, as victory signifies finality. When it comes to public policy, there is rarely a final victory or final defeat.  For example, the successful fight led by the CTF to balance budgets and secure laws that outlawed deficits in the 1990s, is being fought once again.

The CTF has fought many a public policy battle since its founding in 1990, and we’ve had our share of ups and downs. The following is a brief summary of just some of those campaigns where the CTF can tangibly point to its involvement having made a significant difference. Importantly, the CTF does not claim to have achieved anything on this list in isolation. But does claim -- in all instances -- to have played a leading role.

BALANCING BUDGETS

Years of consecutive and uncontrolled deficits through the 1970s and 1980s raked up by federal and provincial governments was a catalyst for the CTF’s creation. In 1993 the CTF commissioned the construction of a debt clock – 12 feet long, 8-and-a-half feet high – with changeable faceplates for the federal and each provincial government. The clock displayed the per-second increase in debt along with increasing debt for the average family of four. In what was ostensibly a horse trailer, the clock was toured across the country and made headlines wherever it was set up.

At every turn, the CTF challenged politicians and organized significant petition campaigns aimed at balanced budget legislation. It paid off. First in several provinces and later federally, the country as a whole gradually moved from red ink to black ink.

In the years between 1997 and 2008 the federal government alone re-paid $105-billion in debt.

Unfortunately, 2008 marked a return to deficit spending. In early 2009, the CTF launched a modern-day version of the debt clock and a petition campaign (www.debtclock.ca) to once again lead the charge in support of balanced budgets. 

POLITICIANS PAY REFORM

In every province where the CTF has established a full time presence, legislators’ compensation has been reformed around the guiding principles of transparency, fairness and simplicity. Specifically, the CTF has opposed gold-plated pensions and so-called “tax-free allowances” that exempted one-third of legislators’ salaries from federal and provincial income taxes. This is an important watchdog role for the CTF, as opposition politicians who should be blowing the whistle are often themselves wallowing in the same trough as government members.

The CTF is the only organization in the country that regularly calculates and releases the details of politicians’ pensions and benefits. Without the CTF, taxpayers would never know these details. Change has generally been built around petitions, the opportunity to make detailed submissions to compensation review panels and significant media coverage.

In Ontario, BC and Manitoba, legislators implemented a fully taxable salary and reformed their pension arrangements to a dollar-for-dollar, self-funding plan (Saskatchewan implemented a self funding plan in 1979). Alberta abolished their gold-plated plan in 1993 and replaced it with an RRSP allowance. In 2001, federal parliamentarians finally adopted a fully taxable salary as did legislators in Saskatchewan in 2006. In 2007, British Columbia legislators became the first to re-instate gold-plated pensions.

Until brought to peoples attention by the CTF, both Saskatchewan and British Columbia had the practice of allowing retired or defeated MLAs to keep all the taxpayer-provided furnishings and equipment in their office upon retiring or being defeated. Dubbed the “Clean Office Policy” by the CTF, the practice was eventually ended in both provinces.

The CTF hasn’t let cities off the hook either. In 2006, a CTF-led campaign resulted in Calgary joining other major Canadian cities such as Vancouver and Toronto in subjecting their mayor and councilor to fully taxable salaries.

THE 1995 FEDERAL BUDGET

In its January 12, 1995 lead editorial, the Wall Street Journal dubbed Canada “an honorary member of the third world in the unmanageability of its debt problem.” The 1995 federal budget was truly a defining moment in the nation’s history. Paul Martin, in only his second budget, had no choice but to tackle the deficit in a meaningful way. At issue was how he would do it. In the lead-up to that budget, the House of Commons Finance Committee recommended a slew of new taxes. Taxpayers were having none of it. And, unlike the GST five years earlier, taxpayers now had a national lobby group that could organize pro-actively.

And we did.

Nineteen TAX ALERT rallies from New Brunswick to Vancouver Island attracted 20,000 Canadians and 233,000 petition signatures were delivered to Finance Minister Paul Martin before he delivered his budget. And while the budget did contain some modest tax increases there can be no doubt of the campaign’s impact. On March 1, 1995, in the aftermath of our successful campaign, the Wall Street Journal summed: “The grass roots campaign … had an impact, Mr. Martin was able to sell deeper spending cuts to his cabinet colleagues and steer them from raising taxes on personal income.” Not only did the campaign stop major tax increases, it elevated the CTF to national prominence.

BALANCED BUDGET/TAXPAYER PROTECTION LAWS

Voluntary compliance on the part of politicians to balance the books, reduce debt and hold the line on taxes has proven a failure. As past CTF president Jason Kenney used to say “we’re in the 25th year of the government’s five year balanced budget plan.”

As early as 1994, CTF researchers went to work drafting model balanced budget/taxpayer protection legislation that would broadly do three things: balance the budget, require voter approval for new or increased taxes, and penalize politicians for non-compliance.

Each province -- where the CTF had a presence -- responded. Saskatchewan passed a balanced budget law. As did Alberta. More important, Alberta’s included a debt retirement provision and in 1999 added a further provision requiring three-quarters of any surplus be directed toward debt repayment. A law passed in British Columbia in 2001 requires balanced budgets and penalizes ministers for overspending their ministry budgets.

Manitoba passed the first comprehensive taxpayer protection law in 1995. The Act included requirements for balanced budgets, referendums on major tax hikes and mandatory debt retirement. Ontario also passed a comprehensive taxpayer protection law (1999) in the wake of Mike Harris’ signature on the CTF’s Taxpayer Protection Pledge during the 1995 Ontario provincial election.

The benefits of these laws included debt repayment, lower interest costs and the ability of governments to finally reduce taxes. On March 31, 2005 Alberta became the first debt-free jurisdiction in the country!

Unfortunately, many of these laws are being gutted.  Even before the recent economic downturn, former premier Ernie Eves weakened Ontario’s law and his successor Dalton McGuinty neutered what was left. BC’s law was amended twice in 2009 as was Manitoba’s in 2008 and 2009. Alberta returned to big deficits in a big way in 2008.

The CTF believes that with the exception of emergencies, federal and provincial governments should be required to balance their budgets like households, municipalities and states in the US. A more potent brand of the CTF-inspired balanced budget/taxpayer protection laws – perhaps voter protected -- is needed. We’ve won this battle before, and can win it again.   

THE BRACKET CREEP SQUEEZE

In the mid-1990s Canadians were well aware that harder work and more income was not getting them any further ahead. Although it was not well known, the problem was called “bracket creep.” In 1985, the federal government “de-indexed” the income tax system exposing a greater share of Canadians inflation-driven incomes to taxes each year.

The result: After 14 years of this stealth tax, the federal and provincial governments had netted $90-billion in new revenue.

In CTF pre-budget submissions in 1997, 1998, and 1999 the CTF demanded full re-indexation of the income tax system. And while the CTF was successful in convincing the House of Commons Finance Committee and the Alberta government, others proved a tougher nut to crack. So out came the cannons.

First in 1998, and then again in 1999, national campaigns aimed at eliminating bracket creep and lowering overall taxes were launched. The press conference launch in 1999 included 9,418 stacked loonies to show the impact bracket creep had on the average wage earner over the past decade. The campaigns also included comprehensive research, a cross-country speaking tour, billboards and a massive on-line petition drive called the “Billion-Byte March.”

Our efforts were rewarded with the announced death of bracket creep on February 28, 2000. The campaign has saved taxpayers some $20-billion. Then Minister of Finance Paul Martin wrote: “The Federation is an important and valued voice in decision making … nowhere is this more evident than in the leading role that the Federation played in educating Canadians about bracket creep and building support for re-indexation of the tax system.”

TAX REFORM

In 1998 the CTF submitted a report to the Alberta Income Tax Review Committee calling for lower, simpler and flatter income taxes. The four pillars of reform called for: an end to bracket creep, a more generous basic personal exemption, a low single rate of income tax and an end to tax discrimination based on marriage. The CTF’s recommendations were adopted almost verbatim by both the committee and government of Alberta.

Better, in 2001, the Alberta government announced it would be lowering its single rate tax of 11% to 10%. The CTF points to Alberta’s income tax structure as a model for all of Canada. Alberta’s reforms opened the door for income tax reviews in Manitoba and Saskatchewan. In each instance, the CTF made detailed recommendations of which some found their way into government budgets in 2000. Although there was no formal review process in place, the federal government ended bracket creep taxation in 2000 [see “bracket creep squeeze”], Ontario and British Columbia followed in 2001.

A CTF presentation to Saskatchewan’s Business Tax Review Committee in 2005 also resulted in tangible results: eliminating the corporate capital tax, reducing the corporate income tax rate from 17 to 12 per cent and increasing the small business tax threshold to $500,000. It has resulted in Saskatchewan having one of the most competitive tax structures for business in the country. CTF advocacy in support of broad-based (as opposed to “boutique”) tax reform was a key factor in the federal government’s tax reduction policies in both its Economic Statement of October 2007 and Budget 2008 (see “Tax Cuts 2005 – 2007”).

AN END TO CORPORATE WELFARE

In every province and federally, the CTF has long demanded not only an end to corporate welfare, but legislation preventing the practice. A significant victory was won in Alberta with the 1996 passage of the Business Financial Assistance Limitation Act which prohibits new loans and guarantees from being issued without the passage of specific legislation, ensuring full public debate before tax dollars can be sunk into any business venture. It is the only jurisdiction in Canada with such a law in place.

Federally, the practice still continues, but a steady barrage of CTF criticism led the Conservative government to replace Ottawa’s disgraced flagship corporate welfare program Technology Partnerships Canada (TPC) with the Strategic Aerospace and Defense Initiative in 2006. The new program’s budget is 40% less than TPC’s and includes stricter accountability rules, including the requirement that repayment records be made public.

DEMOCRATIC REFORM

So much of what the CTF deals with – high taxes, debt, wasteful spending – is symptomatic of a much larger problem. That problem, simply put, is that our current political system fails to be accountable to the very people who pay for it. For years – through commentaries, legislative presentations, reports, campaigns and conferences – the CTF has advanced the need to empower taxpayers through meaningful democratic reforms like citizen-initiated referendum, recall, whistleblower protection, embolden access to information laws and alternatives to our current voting system.

In 1991, we successfully pushed the Saskatchewan government for a province-wide referendum question on citizen-initiated referendum legislation which was supported by 80% of voters. In Alberta, we twice supported private members bills that came just short of passing.

In British Columbia a provincial Recall and Initiative Act was passed – albeit in name only -- as was local referendum legislation in Ontario. Voter approval mechanisms for new or higher taxes was a central ingredient in taxpayer protection laws in both Manitoba and Ontario. The latter unfortunately gutted in 2004.

In 1997, the CTF successfully fought off a Charter challenge of British Columbia’s recall law. We also got the province’s “gag law” taken off the books in 2001 and led the campaign for a province-wide referendum on adopting a new voting system. The province-wide referendum received 57% of the vote on May 17, 2005. Similar referendum questions fell short of the 60% threshold in Ontario 2007, Prince Edward Island 2005, and British Columbia 2009.  In 2008, the British Columbia government passed a new gag law even more draconian than the one they had abolished in 2001.

A scandal ridden federal government paved the way first, for proactive expense disclosure in 2004 followed by the Federal Accountability Act in 2006 which changes rules surrounding political party donations, lobbying, appointments, government contracts and advertising.

Protection is in place for whistleblowers, and the power of the auditor general and comptroller general is enhanced. While the Act stopped short of Access to Information reforms, it was a big step in the right direction and one supported by the CTF which had been championing many of these changes for years. Another long-time democratic reform priority of the CTF is to either abolish or reform the unelected, unaccountable Senate. In 2006, legislation came forward that requires appointments to the Senate to first be elected by voters in the provinces and second, limits their terms.

NO NEW MUNICIPAL TAXES

Despite taxpayers being squeezed by three and sometimes four levels of government – none are seeking to expand their scope more than municipalities. The CTF waged its first battle on the West Coast in 2000 when the Greater Vancouver Transit Authority (TransLink) attempted to bring in a $75 per vehicle registration tax. A successful CTF petition drive coupled with news releases, an examination of TransLink’s costs and building a coalition of organizations in opposition, convinced the provincial government to refuse to collect the tax for TransLink, thereby killing the tax grab.

In 2003, the former mayor of Winnipeg proposed a “new deal” which offered lower property taxes in exchange for a liquor tax, a city sales tax, a city gas tax, an energy tax on natural gas and electricity, a hotel room tax, a telephone tax, a sewage and water tax increase and a user fee on garbage removal. The CTF was the first to call the proposal a tax grab and quickly organized public opposition leading to a new mayor that committed to examining the spending side of the equation and killed any new taxes.

In 2006 the province of Ontario passed the City of Toronto Act which allows that city to impose new taxes. In 2007, Toronto proposed 10 new taxes on everything from theatre tickets to purchasing a home. The CTF led opposition to the taxes with an analysis showing it could cost the average homeowner $1,182. An effort involving a petition, commissioned poll revealing 74% opposed, a phone-in campaign, and presentation at committee hearings resulted in city council temporarily deferring a decision. Unfortunately, the hammer came down in October 2008 with a new car registration tax and land transfer tax implemented. If not for the CTF however, more than two taxes may have been imposed.  Importantly, the CTF continues its fight against more taxes not only in Toronto, but in all Ontario municipalities predictably wanting the same powers.

In March 2007, a Minister’s Council on Municipal Sustainability recommended the province of Alberta give local governments the right to levy six new taxes, including: land-transfer taxes, entertainment taxes, hotel taxes, and vehicle registration taxes. The CTF led opposition to the taxes with news releases, published commentaries, and TaxAction Alerts to CTF supporters urging Albertans to contact their politicians in opposition. The CTF also released calculations showing that these new taxes could cost an Alberta family of four an additional $911 per year. In the summer of 2007, Premier Stelmach wisely told mayors to put the taxing powers on the fall municipal ballot if they wanted them so badly. None did. In responding to the proposal in September 2008, Municipal Affairs Minister, Ray Danyluk, stated “if I can say it in one word: NO.”

The CTF opposes all new taxes on the grounds that “new” taxes never replace “old” taxes. They simply provide politicians more taxing levers and less incentive to look at the spending side of the ledger.

TAX CUTS 2005 - 2007

It seems that tax cuts hit the radar screen every five years. The CTF organized cross-country rallies opposing proposed new taxes in 1995, successfully fought to eliminate bracket creep and reduce income tax rates in 2000 and in 2005 played a leading national role in bringing taxes down yet again. 

After years of demanding excessive federal surpluses be returned to taxpayers, on the eve of an election call in November 2005 the Liberal government announced an immediate and retroactive reduction of the bottom income tax rate and an increase to the Basic Personal Exemption worth $4.5-billion. Long time CTF priorities -- tax relief and accountability -- were the top two issues of the 2005/2006 federal election campaign. As such, the CTF played a larger role than it ever had in providing commentary and analysis during a federal election campaign.

The 2006 federal budget was the first delivered by a Conservative government in 13 years. At issue however was whether income taxes would be raised to allow for a promised 1 point reduction in GST. The CTF provided analysis, issued media statements, published commentaries and earned editorial praise right across the country. We met with politicians and decision makers. And urged CTF supporters by the thousand to contact the finance minister and prime minister before budget day. The effort paid off. Along with a GST cut almost all the previous income tax reductions remained intact – no taxpayer was worse off.

The morning after the 2006 budget, the CTF led reaction on front pages of both the Globe and Mail and National Post. As Maclean’s Magazine editor-in-chief Ken Whyte put it succinctly: “The Canadian Taxpayers Federation dominated coverage of this year’s budget.” An Economic Statement delivered in October 2007 cut the GST a further point to 5%, reduced the lowest income tax bracket at half point, increased the Basic Personal exemption and scheduled a reduction in the general business tax rate from 22% to 15% by 2012.

Not only were these tax cuts measurable, but they were broad-based and accountable (keeping an important election promise to reduce the GST by two points).  The CTF had been lobbying hard against “boutique tax cuts” that benefited some, but not all taxpayers. The October 2007 Economic Statement changed policy course and was praised by the CTF.

ABORIGINAL POLICY REFORM

For years, the CTF has blazed a trail challenging conventional wisdom concerning Aboriginal policy and building the case for change where others would not for fear of “political correctness.” Case in point: the Treaty 8 taxation case (Benoit v. Canada). At issue was Treaty 8 Indian Gordon Benoit who claimed an oral promise made to his ancestors in 1899 exempted him and all Treaty 8 Indians from having to pay any tax, for all time, anywhere in Canada.

Your CTF intervened in this case to argue what politicians would not: that a race-based tax exemption would violate equality provisions of the Charter, numerous international treaties, conventions against racism and basic principles of fairness.

If someone does not pay tax it should be because they are poor, not because of their racial ancestry.

While the CTF first lost the case in 2002, we won on appeal in 2003 and the Supreme Court of Canada finally dismissed the matter in 2004, winning a big victory for the equality of Canadian taxpayers. The CTF is guided by the principles of support for individual property rights, equality, self-sufficiency, as well as democratic and financial accountability.

The CTF has made several appearances before committees and published many reports to challenge a status quo that has hurt both natives and taxpayers alike. In July 2008, a new law came into effect that allows the federal government – for the first time in 141 years – to audit the books of Reserves to ensure tax dollars are being used for their intended programs and services. The CTF continues to advocate for equal application of laws in Canada.

FREEDOM OF INFORMATION LAWS

The CTF has both played champion and defender of Freedom of Information (FOI) laws. The public has a right to know how their dollars are being spent and from its inception the CTF has fought to pry the closed doors of government open.

Major petition drives in 1990 in both Saskatchewan and Alberta eventually led to the implementation of laws in those two provinces. Since that time the CTF has participated in every opportunity to make the legislation more open and accessible. In British Columbia and Manitoba the CTF was instrumental in both forming and maintaining coalitions that successfully staved off proposed changes that would have weakened laws.

Predictably, politicians are big fans of access to government information – right up until they get into government! Each year the CTF works with a cross-section of groups in the provinces and federally to mark “Right to Know Week” promoting the importance of access laws. The CTF and its offices are major users of FOI. Many of the waste stories documented by the CTF over the years have come about as a result of FOI requests made to government.

DEDICATED GAS TAXES

Each year the CTF holds Gas Tax Honesty Day which blows the whistle on government tax gouging at the pumps and demands gas taxes be reinvested into roads and infrastructure. Unbeknownst to most consumers, close to half the pump price of gasoline is tax!

When the event began in 1999, just 26% of the $5-billion collected in gas taxes by the feds was put back into “infrastructure.”  Our message to governments on fuel taxes: “use it or lose it,” direct half into a Municipal Roadway Trust and return the remainder to motorists and taxpayers in the form of lower fuel taxes.

To date, over 150,000 Canadians (including 2,046 mayors and councilors from 459 communities) have signed the CTF’s gas tax petition demanding lower and dedicated fuel taxes.

During the 2004 federal election campaign, the CTF drove a decorated mini-van from Mile 0 of the TransCanada Highway in Victoria, BC all the way to Parliament Hill. The “Running on Empty, Fuming to Ottawa Tour” stopped in 40 communities, conducted countless media interviews, collected signatures and talked to thousands of taxpaying motorists. The campaign resulted in all three major party leaders finally making commitments to dedicate a portion of the federal fuel tax to municipal roads and infrastructure. Stephen Harper even declared as opposition leader at the time that he would lower fuel taxes if elected prime minister … 

And while gas taxes have yet to come down (the feds still apply GST to gas taxes) significant progress has been made dedicating fuel taxes to roads and infrastructure. By 2009/10 more than 100% of what the feds collect in gas taxes is reinvested into “infrastructure.”  Although “infrastructure” has a somewhat dubious definition (think canoe museum, and bocce ball courts), we know much progress has been made since the CTF began its efforts in 1999.

Provinces meanwhile have gone a step further. Manitoba passed a Gas Tax Accountability Act in 2004 requiring fuel tax revenues be dedicated to roads. Two years later, Saskatchewan followed suit. The province of New Brunswick cut gas taxes in 2006.

ALBERTA HEALTH TAX ABOLITION

Most public policy victories involve other advocates. But not in this instance. In 2003 when the CTF initiated a campaign to abolish Alberta’s health tax it was ignored by mainstream media and dismissed by decision makers. But the case against the health tax was clear: it did not pay for health care, it had nothing to do with insurance, it was costly to administer, and it was regressive. The CTF published analysis, distributed commentaries, and used polling data to demonstrate public opposition. With each passing year, CTF directors marched in a mounting pile of petitions to lawmakers and made the case. First, it was opposition parties that came on side followed by the government eliminating the health tax for seniors. Momentum had swung!

On the eve of calling a provincial election in 2008, Alberta Premier Ed Stelmach announced health care premiums would be scrapped for all Albertans. It meant each Alberta family would keep an additional $1,056 of their earnings. Every major media outlet in the province – Canadian Press, Calgary Herald, Edmonton Journal and the Globe and Mail – credited the CTF for the victory. As the Edmonton Sun put it: “the Canadian Taxpayers Federation campaigned tirelessly to get the premium scrapped.”