The Trudeau government is like a band that only knows one tune: higher taxes and spending. 
The government recently imposed a capital gains tax hike. Part of the rationale for the hike is to reduce the debt burden on future Canadians.

“Canada could finance these critical investments by taking on more debt, but that would place an unfair burden on younger generations,” Finance Minister Chrystia Freeland said as she announced her capital gains tax hike. “Fiscal responsibility matters.”

But if the government is worried about deficits and debt, couldn’t it cut wasteful spending instead? 

The Canadian Taxpayers Federation commissioned a Leger poll asking Canadians if they would rather the government increase capital gains taxes or reduce spending to rein in the deficit.

The poll shows 54 per cent of Canadians prefer the government cut spending, while only 23 per cent prefer the capital gains tax increase. Twenty-three per cent of Canadians are unsure. 

Among those who are decided on the issue, 70 per cent of Canadians prefer reducing spending to increasing capital gains taxes. 

Here’s where the government should cut:

If the government wants the rich to pay more, start by making rich multinational corporations pay for their own factories. Instead, the feds put taxpayers on the hook for about $30 billion to multinational corporations like Honda, Volkswagen, Stellantis and Northvolt. 

The Trudeau government has also announced more than $600 million for the Ford Motor Company, $551 million for Umicore, $420 million for Algoma Steel, $110 million for Toyota, $372 million for Bombardier and $12 million for Loblaws, among others. 

Federal corporate subsidies totaled $11.2 billion in 2022, according to the Fraser Institute. That’s more than double what the government spent on corporate subsidies in 2015, even after accounting for inflation. And it’s $4.2 billion more than the federal government will bring in through the capital gains tax hike this year. 

The government also needs to take air out of its ballooning bureaucracy, which consumes more than half of its day-to-day spending.

The government’s payroll hit a record $67 billion last year, increasing 68 per cent since 2016. The reason for the spike? A bigger bureaucracy collecting bigger paycheques.

The Trudeau government hired about 100,000 bureaucrats since 2015. It also rubberstamped more than $1.5 billion in bonuses, despite the Parliamentary Budget Officer finding “less than 50 per cent of (performance) targets are consistently met.” And it dished out more than one million pay raises over the last four years.

The government should sell off Crown corporations, such as the CBC, which competes with media companies and costs taxpayers more than $1 billion every year. 

VIA Rail should be on the chopping block. The feds shovelled $1.8 billion at the failing Crown corporation over the last five years just to cover its operating losses. 

Canada should follow the lead of countries like the United Kingdom, Sweden, the Netherlands, Germany, New Zealand and Portugal who have fully or partially privatized postal services. Canada Post lost $748 million last year, $548 million in 2022 and forecasts “larger, unsustainable losses in future years,” according to its annual report.

And there’s countless examples of government waste – a list too long to fully recreate in the space of a newspaper. Here are just a few examples:

The National Capital Commission spent $8 million building a barn at Rideau Hall. Parks Canada is spending $12 million hunting deer on one island. Three “affordability” cabinet retreats in one year cost more than $1 million.

Balancing the budget would only require modest restraint. In fact, the government could balance the budget this year if it stuck to its own spending plan from just two budgets ago. Even if you remove the extra capital gains tax cash, the deficit would be $5.5 billion, not $40 billion.

There are two key takeaways. First, Canadians are fed up with tax hikes and want less government spending. Second, there’s no shortage of places to cut. 

The government should listen to Canadians, stop hiking taxes and cut spending. 

This column was first published in the Financial Post on July 17, 2024