By Letter to the Editor on October 29, 2020.
Where are the tax revenues going to come from to pay off the massive debt that all three levels of governments are piling up? With information from the Canadian Taxpayers Federation, here is the bleak picture: Canadian federal debt, $905 billion; combined provincial debt, $785 billion, which equates to roughly $1.8 billion debt per day and rising.
This does not include municipal dept. The 2021 estimated interest on the Canadian federal debt is $23.3 billion. Including provincial and municipal debt, the yearly interest cost could be as high as $50 billion or $137 million per day. Think about how those interest costs could be better spent. More schools, teachers, hospitals, medical staff, better care of our military, research and development into a greener economy and the list could goes on.
But as they say, “that is water under the bridge” and I am sure we are going to see “a hundred-year flood” (billions of dollars) under the bridge before we get back on track. I am not even sure the average Canadian cares about debt and the cost of that debt. I am sure, with COVID-19 and the economic shutdown, Canadians have bigger concerns.
Now to the point of this letter: where are the new taxes or expense cutting going to come from? First, let us discuss new tax sources. We could raise GST and PST which some experts say is the fairest tax. We could increase both personal and corporate taxes with a focus on the wealthy. Revamp the whole tax code to make it fairer. Is it a good idea to increase taxes when the economy is being crushed to the point where major parts of the economy will take years to recover if ever?
I think we need to go after business and individuals that do not pay any taxes or are insignificant. E.g. social media companies like Facebook and Twitter. My understanding is these companies who make millions or billions of dollars revenue do not pay any income tax in Canada. They make revenue from selling advertising in Canada. Canadian companies pay for advertising on these platforms and can use these costs to reduce their operating costs and therefore taxes. It’s a double whammy. The Canadian government should disallow this advertising deduction which hopefully would force these Canadian businesses to advertise locally, a double win for Canada.
Expenses is another important topic to be discussed in a future letter.