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New front line in the tax battle: Municipalities

Author: David Maclean 2007/05/09
It hasn't always been that Canadians were forced to hand over half their income to three, sometimes four levels of government. The state's encroachment into our lives and wallets was incremental.

Since Canada's first income tax was implemented in 1917 as a temporary measure to pay for the Great War, taxpayers have generally been in retreat on the tax front. During the 1960s and '70s ever-expanding government influence on our lives carried a hefty price tag which brought on massive budget deficits and tax increases at both the federal and provincial level.

In the mid-90s overburdened taxpayers pushed back and tax rates held steady or even declined. Whatever advances have been made in recent years, it remains a formidable challenge to roll back the tax burden to where we were 30 or 40 years ago.

While federal and provincial governments have generally held the line on taxes (or actually reduced them) in recent years, a new front line is beginning to form and municipalities are leading the tax hike charge.

We've heard for years the complaints coming from towns and cities that they are cash-strapped. Around budget time, Saskatchewan mayors grandstand for more money from the province and Ottawa. Their refrain: The property tax base isn't enough to sustain municipal governments, "forcing" them to raise taxes. They need more of other peoples' money just to get by (as if federal and provincial governments are somehow funded by different taxpayers). Unfortunately, provincial governments have been more than happy to oblige.

Now municipalities are looking for permission to levy new taxes on citizens. In most provinces, cities are limited in the kind of taxes they can collect. In Alberta, British Columbia and Manitoba, cities are lobbying like mad to get their hands on more tax dollars. The City of Toronto has successfully lobbied the Ontario government to give them more "tax tools."

What's a "tax tool you ask Well, in Toronto tax tools include new taxes on: liquor, tobacco, billboards, parking, drivers' licenses, concert and movie tickets, sidewalks (for bars with lineups outside), legalized prostitution, coffee cups, garbage bags and Styrofoam containers.

The point here is that, once municipalities are given new taxing authority, they will use them! So called "consultations" in Toronto are more focused on where to spend the new-found loot than Torontonians want these taxes in the first place.

The scary part is that municipalities across Canada seem to be gaining traction in their efforts to impose new taxes. While Saskatchewan municipalities appear to be taking to a "wait-and-see" approach to new taxing authorities, they will no doubt be emboldened by Toronto's "success."

It's best to nip this trend in the bud and make it perfectly clear to local politicians that new taxes will not be tolerated in Saskatchewan municipalities. Once this genie is out of the bottle, we'll never be able to stuff it back in.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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