EN FR

Bigger and bigger

Author: John Carpay 2005/03/24
Like Liberal MPs in Ottawa, Alberta's governing Conservatives just don't understand whose money fills government coffers. When it comes to spending other people's money, both the provincial Conservatives and the federal Liberals think the money belongs to politicians rather than to those who earned it.

When the 2004 federal budget was tabled last February, Liberal Finance Minister Ralph Goodale said $148-billion would be spent on government programs. But now, towards the end of this fiscal year, Ottawa admits to spending $158-billion. Ottawa missed its original budget target by an astounding $10-billion. When Liberals get extra revenues from taxpayers, they spend the money as if it belongs to them, rejecting tax cuts.

Here in Alberta the story is no different. Last year Premier Klein's Tories presented a budget which called for $22.3-billion to be spent on provincial government programs. But now, towards the end of this fiscal year, it turns out that $24.1-billion of our money will be spent - an extra $1.8-billion. When Conservatives get extra revenues from taxpayers, they spend the money as if it belongs to them, rejecting tax cuts.

Both the federal Liberals and the provincial Conservatives announced personal income tax cuts in 2000, which went into effect in 2001. To their credit, our federal and provincial rulers have indexed the tax brackets to go up with inflation, so we no longer suffer automatic annual tax increases through "bracket creep." But since 2001, in spite of huge surpluses in both Ottawa and Edmonton, our tax burdens remain high.

When you look at growth in spending, it's no wonder that our federal and provincial tax burdens remain high. Our federal Liberals have increased spending on government programs by 47% in the past eight years. Our provincial Conservatives have hiked program spending by 90% in the past eight years. Both federally and provincially, politicians' spending outpaces - by far - population growth and inflation. In other words, in spite of chronic whining about "chronic underfunding," government is actually getting bigger - much bigger.

Provincially, Premier Klein raised taxes by $541 million in 2002. Small cuts to corporate income tax in 2003 and again 2004 - though positive - have not made up for this $541 million increase. Albertans are remarkably tolerant of tax increases and big spending politicians here at home. We only get really upset when Ottawa does it.

But our provincial taxes aren't nearly as low as Premier Klein would have you believe. In fact, the Alberta government is collecting $9,000 per person in revenues this year - more than any other government in Canada. The claim of "the lowest taxes in Canada" is only true when you exclude royalties from oil and gas, which is money that belongs to Albertans. The health care premium tax could be abolished tomorrow, and Klein's Tories would still be swimming in our money.

Like the federal Liberals, our provincial Tories will tell you that government cannot "afford" to reduce taxes, because tax cuts will "cost" too much. "How will those tax cuts be paid for?" they ask.

Our federal and provincial politicians assume that government owns - or is entitled to own - the wealth created by hard-working Canadians. Politicians think that government has a legitimate claim to every dollar earned, "giving" to the people only what it can "afford." In thinking that a tax cut needs to be "paid for," they assume that government already owns every dollar in every bank account in Canada.

It's time that our federal and provincial politicians recognized that wealth is created by workers and managers, investors and businesses, buyers and sellers, inventors and manufacturers. Every day, millions of individuals make choices about what to buy, where to work, how to run their businesses, which new products and services to develop, and where to invest their money. People make billions of voluntary decisions and perform billions of voluntary tasks, resulting in a prosperous economy with a vast multitude of different foods, clothes, products and services. Wealth is created because people work, buy, sell, farm, manufacture, invent, trade, invest, explore, develop resources, take risks, set up new businesses etc.

It's time for Liberals in Ottawa and Tories in Edmonton to recognize one simple truth: it's not your money. When you get more revenues than expected, give it back. We can spend it with more wisdom and greater care than any politician or bureaucrat ever can or will.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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