Who Did You Vote For, Canada?

Is it obvious now?:

A majority of Canadians consider themselves overtaxed by a federal government that spends too much and unwisely. And Quebecers are the ones who most feel the Trudeau government is “investing” too much.

An Ipsos-MEI poll published on Thursday shows that 63 per cent of Canadians think the federal government’s spending is either “too high” or “much too high,” which is a sharp increase compared to a similar poll ran by Ipsos last year. They also feel the government isn’t transparent or accountable enough for the spending spree.

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In Quebec, 74 per cent said the Trudeau government spends too much, which is significantly more than those who said so in Western Canada (64 per cent), Ontario (56 per cent) and Atlantic Canada (55 per cent).

“Quebecers, I think, are reflecting the fact that they feel they aren’t getting the value from all those taxes they pay,” said Sean Simpson, senior vice-president at Ipsos.

He points out the fact that Quebec being one of the most heavily taxed jurisdictions in the world could influence the results.

 

Just squeeze more money out of Alberta, Quebec.

That's the way!

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The majority of Canadians say the government spends too much money, takes too much money from our paycheques and wastes money on the wrong priorities. That’s according to a new Ipsos poll commissioned by the Montreal Economic Institute.

The poll shows 72% of Canadians think income taxes are too high.

Forty-eight per cent of Canadians oppose the carbon tax, while only 39% support it. Opposition to the carbon tax has increased since last year, while support has declined.

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The Fraser Institute released its latest Consumer Tax Index on July 30. The index has been documenting Canada’s tax burden since 1961.

“Considering the sheer amount of income that goes towards taxes in this country, Canadians may question whether or not we’re getting good value for our money,” Fraser Institute director of fiscal studies Jake Fuss said in a statement.

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Canada had the third-lowest growth in GDP per person from2014 to 2022 among 30 advanced economies, finds a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“In terms of GDP per person, a broad measure of living standards, Canada’s performance has weakened substantially in recent years,” said Alex Whalen, director of the Fraser Institute’s Atlantic Canada Prosperity Initiative and co-author of We’re Getting Poorer: GDP per Capita in Canada and the OECD, 2002–2060.

The study, which examines Canada’s historic and projected GDP per capita growth compared to similar OECD countries, finds that from 2002 to 2014, Canadian income growth as measured by GDP per person roughly kept pace with the rest of the OECD, but from 2014 to 2022 Canada’s growth rate stagnated.

In 2002, Canada’s GDP per capita was higher than the OECD average by US$3,141. By 2022, it had fallen well below the OECD average by US$231.

Canada lost ground compared to key allies and trading partners such as the United States, United Kingdom, New Zealand, and Australia between 2014 and 2022.

For example, Canadian GDP per person in 2014 was $44,710 (80.4 per cent of the US total of $55,605) but by 2022, Canada was only at $46,035 versus $63,685 in the US.

In other words, the gap had grown from $10,895 to $17,649 by 2022 (all measures in inflation-adjusted US dollars).

“Canada has been experiencing a collapse in investment, low productivity growth, and a large and growing government sector, all of which contribute to reduced growth in living standards compared to our peer countries in the OECD,” said Lawrence Schembri, a senior fellow with the Fraser Institute and co-author.

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Many Canadians are unhappy about the carbon tax. Its proponents argue it’s the cheapest way to reduce greenhouse gas (GHG) emissions, which is true. But the government’s problem is that even as the tax hits the upper limit of what people are willing to pay, emissions haven’t fallen nearly enough to meet the federal target of at least 40 per cent below 2005 levels by 2030. Indeed, since the temporary 2020 COVID-era drop, national GHG emissions have been rising, in part due to rapid population growth.

The carbon tax is only part of the federal GHG plan, however. In a new study published by the Fraser Institute, I present a detailed discussion of the Trudeau government’s proposed Emission Reduction Plan (ERP), including its economic impacts and likely GHG reduction effects. The bottom line is that the package as a whole is so harmful to the economy it’s unlikely to be implemented — and it still wouldn’t reach the GHG goal even if it were.

Simply put, the government has failed to provide a detailed economic assessment of its ERP, offering instead only a superficial and flawed rationale that overstates the benefits and waves away the costs. In contrast, my study presents a comprehensive analysis of the proposed policy package and uses a peer-reviewed macroeconomic model to estimate its economic and environmental effects.

The ERP can be broken down into three components: the carbon tax, the Clean Fuels Regulation (CFR) and various other regulatory measures. There is a long list of the latter, including: the electric vehicle mandate; carbon capture system tax credits; restrictions on fertilizer use in agriculture; methane reduction targets and an overall emissions cap in the oil and gas industry; new emission limits for the electricity sector; new building and motor vehicle energy efficiency mandates; and many more. The regulatory measures tend to have high upfront costs and limited short-term effects so they carry relatively high marginal costs of emission reductions.

The cheapest part of the package is the carbon tax. I estimate it will get 2030 emissions down by about 18 per cent compared to where they otherwise would be, returning them approximately to 2020 levels. The CFR brings them down a further six per cent relative to their base case levels and the regulatory measures bring them down another 2.5 per cent, for a cumulative reduction of 26.5 per cent below the base-case 2030 level, which is just under 60 per cent of the way to the government’s target.

But the costs of the various components are not the same.

The carbon tax reduces emissions at an initial average cost of about $290 per tonne, falling to just under $230 per tonne by 2030. This is on par with the federal government’s estimate of the social costs of GHG emissions, which rise from about $250 to $290 per tonne over this decade. I believe these social cost estimates are exaggerated but even if we take them at face value, they imply that while the carbon tax policy does pass a cost-benefit test the rest of the ERP does not. It involves per-tonne abatement costs that are much higher: the CFR roughly doubles the cost per tonne of GHG reductions; adding in the regulatory measures approximately triples them.

The economic impacts are easiest to understand by translating these costs into per-worker terms. I estimate that the annual cost per worker of the carbon-pricing system — net of rebates and accounting for indirect effects such as higher consumer costs and lower real wages — works out to $1,302 as of 2030. Adding in the government’s Clean Fuels Regulations more than doubles that to $3,550, while adding in the other regulatory measures increases it further to $6,700.

The policy package also reduces total employment. The carbon tax results in an estimated 57,000 fewer jobs as of 2030; the CFR increases job losses to 94,000 and the regulatory measures increase losses to 164,000 jobs. Claims by the federal government that the ERP presents new opportunities for jobs and employment in Canada are unsupported by proper analysis.