Surpluses Result of Ottawa's Structural Level of Over-Taxation

Ottawa: The Canadian Taxpayers Federation (CTF) reacted to the Economic and Fiscal Update delivered this afternoon by Finance Minister Ralph Goodale before the House of Commons Standing Committee on Finance in Ottawa.

"Today's massive surpluses are the result of one thing: A structural level of over-taxation levied on Canadians by the federal government," said CTF federal director John Williamson. "According to the federal government, the surplus over the next five years will total $52-billion; meanwhile private sector economists say the surplus will be $84-billion. Given Ottawa's abysmal record of forecasting surpluses, it is obvious which figure taxpayers should believe."

Federal Spending is Unsustainable:
"In the March budget, Mr. Goodale said program spending in 2004/05 would increase by 3.1 per cent. Today, we are told it will rise by 6.5 per cent. This is not a government that is acting responsibly," observed Williamson. "The federal government's alarming increases in spending began in 1998 soon after the budget was balanced. Today's forecast revealed the government has no intention of holding the line on spending growth or even prioritizing spending."

"Program spending is up 41 per cent in 7 years and is projected to jump another 34 per cent over the 5 years through to March 2010," added Williamson. "Increasing spending at this pace is simply not responsible as it is unsustainable should the economy slow."

Canadians Remain Over-Taxed:
"Despite passing a 5 year tax relief plan in 2000, total revenues are higher today than they were projected to be in 2000," noted Williamson. "Before accounting for the tax reductions between 2000 and 2004, total revenues for 2004/05 were predicted to be $193-billion in the 2000 Economic and Fiscal Update. Yet today we've learned total revenues will in fact be $194-billion this year. Ottawa is literally swimming in tax money and it is time for dramatic tax relief."

"This good news comes as no surprise to the CTF. Cutting taxes has not left the cupboards bare, rather lower taxes have delivered additional revenues as a result of strong economic growth and job creation. Personal income tax revenues will be more than $3-billion higher this year as a result of this growth. Taxpayers will note the personal income tax burden as a percentage of federal revenues is rising."

"Today, Prime Minister Paul Martin said his party campaigned on a spending program in the last election and he is going to fulfill that agenda despite his failure to win a majority government. Should the Finance Minister not provide meaningful tax relief in the upcoming budget, the opposition should bring down the government and go to the people," concluded Williamson. "Millions of Canadians want lower taxes and these voters have not disappeared."

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For more information, contact:
John Williamson on his national pager at 1-888-236-8490 or CTF Research Director Bruce Winchester in Ottawa at 613-234-6554.