“Tuition increases limited to 3%,” a Herald headline proclaimed last week, over a story labelled EXCLUSIVE. It quoted “a senior government official,” who cheerily said the province was imposing a three percent tuition cap “designed to protect Nova Scotia students, ensuring that their tuition will remain below the national average over the long term.” The leak tried to put a positive spin on the government’s decision to scrap a freeze on tuition and allow universities to hike fees by three percent each year over the next three while cutting university funding by four percent next year. It came one day before a student protest during which hundreds marched to Province House hoisting signs that read, “A University Education Shouldn’t Bleed You Dry,” a reference to the fact that student debt has more than doubled in the last 20 years.
Aside from well-timed newspaper leaks, the NDP government is trying to sell tuition hikes along with cuts to universities and public schools as the bitter medicine needed to help us “live within our means.” That simple slogan suggests we have to cut because we can’t afford current rates of social spending. This line has been spouted for decades by Canadian politicians of all stripes and trumpeted daily in the mainstream media. But, bear with me and I’ll try to show why it’s far from true, especially in the world’s 15th richest country.
First, a surprising, but rarely acknowledged statistic: Canada’s economic wealth has more than doubled over the last 40 years. In 1970, the country produced $18,691 worth of goods and services per person. Last year’s figure was $38,043. (Both figures are adjusted for inflation.) Economists call it real gross domestic product per capita. It’s a standard measure of a country’s wealth. Surprisingly, even as national wealth more than doubled, we’ve reduced the proportion of it that goes to social spending. In 1981, we spent 21.5 percent of GDP on social programs. By 1995, we were down to 18.9 percent and by 2005, we spent 16.5 percent ranking a dismal 26th out of 30 industrial countries.
And no wonder. In 2008, Canada’s tax revenues, at about 32 percent of our national wealth, were well below most other industrial countries. The media keep shouting that we’re “taxed to the max.” But that’s not true, at least not in comparison with other advanced countries, ones with better social programs than ours.
As I see it, there’s a quiet competition in Canada between public spending on social programs and private spending on consumer goods. Here’s an astonishing figure to illustrate my point: Every year Nova Scotians shell out about $5.3 billion just to own and operate their cars. That exceeds the $5 billion the provincial government spends on health and education combined! If you add in community services (welfare, et cetera), government spending on social programs comes to nearly $6 billion or 20 percent of provincial GDP —about one dollar in every five of our wealth, while private spending on the car comes to 18 percent of GDP (but that figure doesn’t include public spending on highways, police and health care to patch up accident victims).
Yes, most car-related spending comes from our private incomes while social programs are mostly funded by tax dollars. The money for both comes from the same pocket. Right-wingers might argue that people can choose whether to buy a car, but are compelled to pay tax rates set by the government. True, but instead of hacking away at social programs, why not undertake massive improvements to more environmentally friendly public transit and shift the savings in car bills to health, education and welfare? We do have choices despite what the politicians and media keep preaching. We need to make a collective decision about how we spend our money. Lower taxes and more private spending on fancier cars, for example? Or higher taxes and more public spending on social programs including affordable universities?
notes:
1. Nova Scotia passenger vehicle registrations as of December 31, 2010 stood at 600,956, a figure which included 402,597 cars classified as sedans, station wagons and hatchbacks and 198,359 classed as vans, pickup trucks and SUVs.
2. About 12 percent of those vehicles or 72,114 would be light commercial vehicles. So Nova Scotia families and individuals owned a total of 528,842 passenger cars at the end of 2010.
3. According to the annual cost of driving pamphlet issued by the Canadian Automobile Association based on calculations from Runzheimer International, the average cost of owning a car and driving 18,000 kilometres in 2010 was $10,057.50. (That’s based on averaging the cost of operating a 2010, 4-cylinder compact vehicle ($8,524) and a 2010, 6-cylinder minivan ($11,591). I’m told that the 18,000 km figure should really be closer to 24,000 in N.S., but I decided to stick with it anyway to avoid any risk of inflating the cost figures which are also quite a bit lower than they should be because the costs of operating SUVs and pickup trucks are not included either.)
4. Calculation of what Nova Scotians per year spend owning and operating their cars: $10,057.50 X 528,842 = $5,318,828,415 or $5.3 billion — more than health care and education spending combined.
5. Meantime total government spending on health care this year = $3,634,935,000; education and universities = $1,376,008,000; community services = $971,562,000. Grand total = $5,982,505,000
This article appears in Feb 10-16, 2011.
Bruce – some of the money spent on education is a waste. We have too much empty space, up to 1,000,000 sq ft by one estimate. Which means too many janitors, too many pricipals, too much heat, lights and maintenance. Kids being bused to French immersion.
Your figures re the amount spent on social programmes are misleading. The price increases in commodities drive up GDP but that does not mean we should automatically increase programme spending. An increase in the wages of social workers or teachers or civil servants does not translate into better education, better public servants or better social services. It does translate in higher pension costs and larger unfunded liabilities.
I think we should be hammering Mayor Kelly as he goes around saying ‘Housing is not our responsibility’ whilst he merrily traipses around Canada meeting stadium builders and rock concert promoters who now appear to provide essential services to towns and cities.
And that putz Mayor Basil Stewart of Summerside, (population 14,500) who, when he was the president of the Federation of Canadian Municipalities, went around telling any TV, radio and print journalist about how poor towns and cities were and begging for trainloads of federal cash, and at the same time was secretly sending $1,300,000 in two installments to a scam artist in California claiming to promote a Michael Jackson memorial concert starring Beyonce. For a family of 4 in Summerside Mayor Stewart just pissed away $36 of their property taxes.
Links : Summerside ranks 172 out of 179 towns and cities in Canada :-
http://www.journalpioneer.com/Sports/Baseb…
Basil Stewart has been Mayor of Summerside for 25 years. In July 2009 he sent $650,000 and then wired another $650,000 on March 10 2010. He kept quiet about the scam and was re-elected Mayor in November 2010 without voters knowing that he had been conned out of $1,300,000.
In June 2009 Stewart wes elected President of FCM and was all over the TV and radio bemoaning the fiscal plight of towns and cities and pushing for more federal Gas Tax money to build infrastructure
In a September 21 2009 press release he said ” By increasing investments in quality roads, bridges, public transit, and water systems, an enhanced GTF would help protect Canada´s quality of life — and strengthen the physical foundations of our economy — as we emerge from the global recession.”
http://www.pe.dailybusinessbuzz.ca/Provinc…
Mayor Kelly and Mayor Stewart are both Conservatives; Stewart ran and lost in the 1993 federal election.
One week ago the Charlottetown Guardian had an editorial :
http://www.theguardian.pe.ca/Opinion/Edito…
..who’s twice as rich? certainly not the rank and file average citizen anywho
Your figures show that NS social spending is far above the national average, 16.5 national vs ‘about 20’ provincial. Shouldn’t we applaud ourselves? As a property owning working nova scotian I also question the 32% tax rate. 15% HST removed AFTER 20%ish income tax and we havn’t even begun looking at all the ‘special’ taxes. I would love to work a year at 32%. As for your statement “shift the savings in car bills to health, education and welfare” I just shake my head. I disagree that more and more subsidies(taxes) invested in PT will make people give up thier cars. I also question how investing in greener PT technologies will increase PT ridership. Bottom line, my money doesn’t exist for the governement. If I am smart enough to reduce my expenses those savings are mine, not yours.
Damn right Walter
Ummm, Bruce, you accurately noted that the costs you proclaim for vehicle ownership/operation are based on several 2010 vehicles. I’ve looked at that CAA handout – your numbers are good.
So where do you get off assuming that every Nova Scotian out there is driving a 2010 vehicle? I drive a well-maintained 1997 Honda Accord that I’ve had for close to a decade, and I know for a fact that not once in the past 5 years has the TCO for that car gone over $5K per annum. And I think it’s safe to say that I’m not an outlier – I seriously doubt that your average Nova Scotian driver is forking out anywhere close to $10K per year. Hell, a substantial percentage of Nova Scotians could not possibly fork out that much; they simply do not have that kind of money.
And come on, Bruce, especially considering your politics, do you seriously believe that we are awash in wealth? Nova Scotia is one of the poorest provinces. There isn’t a single income earner in the bottom 80 percent that has extra disposable income to be taxed away, and although you may not believe it, most of the folks in the top 20 percent aren’t overflowing with cash that they don’t know what to do with. Fact is, you jack up the taxes on a two-income family making $100K or $120K or $150K per year (sounds like a lot, doesn’t it), and you’re downsizing their house or hurting their retirement or decreasing their childrens’ educational choices.
I suspect you’re implying, without flat out saying so, that we should be going after all those millionaires and big megacorps. Well, you know, they could all just pack up and move. And in fact they would. No solution at all. What we really need to confront is the fact that Nova Scotia, by and large, fields a Second World, mediocre-education service-oriented medium-quality (at best) labour force. And the problems start with our public school system – the currently well-funded one – that is underperforming and not held to account. Until we shake that tree everything else is just a bandaid.
Anyone with any sort of memory should remember what the bloated social programs that were brought in during Trudeau’s era did to our national debt. Canadian voters chose to become more fiscally responsible and cuts were made. Is your argument based on the premise that we should be spending as much as possible on social programs as possible? Don’t get me wrong, there are huge societal benefits to many programs like education and those of the environmentally forward-thinking type, but your argument is so loose, it’s just sad.
Despite ranking 26th out of 30 in social spending in 2005, we ranked 4th in the world for the Human Development Index and ranked 1st for seven years straight up until data in 1998. Authors of the study have also willing admitted that there is little noticeable difference between the top ranked countries, so I say we just may be getting the best bang for our buck. It isn’t who spends the most, it’s who spends it most wisely. There’s a magical little concept known as diminishing returns, and at a certain point the funding levels of social programs just become way too expensive for very little social progress. This is not to say that Canada cannot make improvements, as we surely can, but simply saying we need to spend more compared to our GDP is a vague statement at best, fiscally irresponsible at the worst.
Also, I’d be interested to see what sort of cutbacks the countries at the top of the social-spending list have had to make since the recession. We’re all quite familiar with the fun that France, Italy, and the UK have had implementing their austerity measures. But then again, maybe they should just tax their citizens more if their tax revenues aren’t at at ratio that you consider appropriate?
Down with the NDP!, they lied on every election “promise”. This is just typical of socialists lie to get into power.
Hey Realist in Dartmouth,
(1) I hope you noted when you read the CAA Driving Costs pamphlet that these are *average* costs. Some car owners will be above and some below — that’s the nature of averages.
It doesn’t matter that not everyone drives a 2010 model. Runzheimer uses the latest models to show typical, average costs. For example, maintenance and repair costs for a 2010 model will not be as great now as they will be when the vehicle is five years old, but the Runzheimer figures show that those costs will average out at 2.36 cents per km for a compact car while tire wear will cost 2.1 cents per km. Overall cost per km. for the compact is 47.4 cents which includes all ownership and operating costs.
If you live in Fall River as I do, the 50 km return trip to Halifax in a compact car will set you back an average of $23.70. Over time that runs into a lot of money ($118.50 a week on average) for people who commute for work every weekday — and that figure does not include the cost of parking.
And obviously, people use their cars for a lot more than driving to work. As the CAA charts show, everything depends on how far you drive. I used an average 18,000 km per yr. although an expert told me that for average Nova Scotians, the figure should really be 23-24,000. He pointed out that we live in a province with a large rural population and very poor transit services. For anyone interested, the CAA brochure is at: http://www.caa.ca/documents/CAA_Driving_Co…
(2) Some people disagree with including the cost of depreciation especially when you’re driving a 13-year-old vehicle. For more info. on that debate see this Globe article: http://www.theglobeandmail.com/globe-drive… Interestingly, the Globe puts the cost of owning and operating a minivan much higher than Runzheimer does. In my estimate of total annual spending of $5.3 billion, I did not include the extra costs of owning and operating class 20 vehicles which include larger vans, pickup trucks and SUVs.
(3) You say the average Nova Scotian can’t afford to fork out anywhere close to $10K per yr. for their cars. Well, the great thing about cars is that you don’t have to pay upfront as you do when you get on a bus. (Although buses are a lot cheaper.) You can borrow the money to buy the car and finance repairs etc. as they arise with a credit card or line of credit or, if you’re really unlucky, with a payday loan. As the Globe article points out, car ownership is the biggest expense after home ownership — if you’re rich enough to buy a home.
In Canada, household debt has more than doubled since 1989 and now exceeds $1.4 trillion: http://www.theglobeandmail.com/report-on-b… And, most people don’t realize that one-third of retail spending is car-related. For example, in the first quarter of 2010, Canadians spent a total of $94.1 billion in retail stores. Car-related spending accounted for $28.5 billion, the largest single category of retail spending, well ahead of the second-largest category of food and beverages which came in at $23.3 billion. (I realize that in this case, automotive spending does not quite reach one third, but that is because of the current recession. I’ve been following these patterns for more than 10 years and, on average, Canadians spend one dollar of every three in retail spending on their cars.) http://www.statcan.gc.ca/daily-quotidien/1…
(4) Whatever you say, in world terms, Nova Scotia is one of the richest places on Earth. If we are classified as “have-not”, it is only in relation to other Canadian provinces, not to most other countries. Given our wealth, there is no excuse for the prevalence of poverty here and no real argument for making further cuts to social program spending.
(5) Walter: You seem to have misread my editorial. I said that Canada taxes at the rate of 32 percent of Gross Domestic Product. In other words, total tax revenues in Canada amount to 32 percent of our national wealth. And that’s much lower than in most other industrial countries.
For an illustration of this you can scroll down the page to the graphs at: http://www.oecd.org/document/35/0,3746,en_…
If you prefer to look at actual figures from 1965-2009 click on #2, “Total Tax Revenue as Percentage of GDP” and you can download an Excel international comparisons table. http://en.wikipedia.org/wiki/List_of_count… It shows, for example, that Canada’s total tax revenues in 2008 amounted to 32.1 percent of GDP while France’s amounted to 43.2.
I agree with Bruce on education spending, its on the other social costs that guys like Bruce will never get it, lefties scream that the right is arrogant however the ultimate arrogance is assuming you can take someone else’s tax money and spend it on social programs according to your own beliefs and conscience whether it be the arts, welfare,free healthcare for immigrants, 3rd world subsidizes, environment, etc,etc. Thankfully this way of thinking from Bruce and the federal NDP only get about 15% support natioanlly. Be careful what you ask for Bruce, if we opened up a national review and election platform of provincial, federal and international social cost programs you would find the PC’s with a majority government. If you want more monsy for education be prepared to shut up when there are cuts to welfare and other secondary social programs.
Bruce;
First, I think you missed a couple key things in that CAA brochure… “All the average costs we’ve cited are for vehicles operating under mostly stop-and-go driving conditions”. I’m not sure if I would classify most of the driving in Nova Scotia as “stop and go” due to the way our population is spread out over a large area requiring lots of highway trips… As you said, we do have a large rural population… According to statscan, 45% of our population in 2006 was rural, compared to a national average of 20%!!! I think this would significantly affect the cost. Another point to make is, according to transportation Canada, in 2005 17900 Km WAS the average amount of Km driven in Nova Scotia, so good on you to not use the inflated number.
Yes, we spend lots on our cars: we live in a province which has unique challenges for transportation: We live in a place, as you said, with little in the way of public transit- That is not without reason! As spread out as we are, the only decent public transit caters to those going “downtown” while leaving the rest of us to own our cars, commute in our cars, and pay what we have to for our cars. If you could propose a public transit solution to get people where they need to go, when they need to go there, and without resorting to cars… Then you’re a fuckin’ genius, because its got everyone stumped. Until then, leave our money where it is. If I can’t get to work every day (and yes, I live on the peninsula but working in Hammonds Plains makes it impossible to commute by bus) then my taxes can’t go towards… Whatever the government wants.
On that final note… Yes, as a “rich” place on this earth, Nova Scotia shouldn’t HAVE to cut social programs. Why do we? Because the wealth has already been spent. At debt “servicing” costs of 800 Million/year or more, we won’t be rich until we’re debt free.
And that, ladies and gentlemen, will be never.
That last comment, was my bad. Bad number from a government document, It isn’t 800mil/year… I dont think?
Apparently, Bruce, you reported on the state of the provincial debt in April… 14 billion dollars… So whatever the interest is on that yearly, we HAVE to pay, anything else… we will need to start putting more on the principal, leaving us with HUGE holes in our province’s finances.
I think that’s why we’re not rich…
Hey longwalker: Sorry but you’re grasping at straws if you’re trying to argue the differences in cost between stop-and-go driving conditions and highway driving would invalidate my estimate of the $5.3 billion Nova Scotians spend every year to own and operate their cars. For one thing, a lot of the urban driving in Nova Scotia is stop-and-go as anyone who tries to enter and leave the peninsula during rush hours knows full well. Secondly, the remaining difference in cost between highway driving and stop-and-go is more than covered by my decision to exclude the extra ownership and operating costs of the 198,359 larger class 20 vehicles that were registered as of Dec. 31/10. Sure, about 12% of them (23,803) would be commercial vehicles but that still leaves 174,556 that are operating at substantially higher costs than I have included.
I hope you will not conclude that I’m trying to qualify for your title of “a fuckin’ genius,” but there is a bus system N.S. could easily copy. It’s called the Saskatchewan Transportation Company, a crown corporation established in 1946 by the provincial government led by Tommy Douglas. http://en.wikipedia.org/wiki/Saskatchewan_…
The company’s website says: “We currently serve more than 280 communities within Saskatchewan and operate 29 bus routes. Our buses travel more than 3.1 million miles per year. STC maintains a fleet of 44 motor coaches, varying in size from 55 to 20 passengers.” http://www.stcbus.com/
The one-way full adult fare for a trip from Regina to Saskatoon — a road distance of about 267.25 km — is $40.40 ($36.40 for old people and students, but there are other available discounts as well.) The same trip in a 4-cylinder compact at 47.4 cents per km works out to $126.67. Even if we take your point into consideration that this would be highway driving, not stop-and-go and deduct a generous $20 that still leaves the car trip costing $106, more than twice the bus fare.
Yes, I know more than one person can travel in the car, so let’s apply a statistic from that 2005 transportation survey you mention. In Nova Scotia, average occupants per car comes to 1.6. If my math is correct, for that number of people to travel by bus at full fare, it would cost $40.40 + $24.24 [$40.40 X .6] = $64.64. By car, it’s still $106, although I suppose the driver could split the cost with his half passenger. That wouldn’t help much, however, if the half passenger were a member of the same household.
Notice I haven’t included what economists call “externalities” such as the added environmental costs of transporting people in cars as opposed to buses. A 2006 report from GPI Atlantic concluded that if you add external costs to ownership and operating ones, the cost of road passenger travel in N.S. in 2002 ranged from $6.4 billion on the low end to $13.3 billion on the high end. Incidentally, both figures exceed current spending on social programs. Those figures can be found beginning on page xxii under the heading “Full Cost Accounting” in the following document: http://www.gpiatlantic.org/publications/su…
Here’s hoping the NS NDP will copy their socialist brethren in Sask. and set up a Nova Scotia Transportation Company. OOOPs. Sorry, I forgot. Socialism is a bad word. I mean let’s hope our conservative progressive NDP government will set up a publicly owned bus company that would truly help us “live within our means.”
Well written, Bruce. Once again you’ve shown that the corporate line – pay the banksters, whatever the cost – has trumped fairness and vision (planning for the future). A balance sheet of government spending will show where this government’s priorities are.
Your last point “We do have choices despite what the politicians and media keep preaching. We need to make a collective decision about how we spend our money.” is so vital.
Let’s also remember why a shift in priorities is so important. While Canada may be getting richer, Canadian’s are not. Over the last 20 years Nova Scotia’s economy has grown by 62% largely due to increased in worker productivity, but while profits have increased dramatically as a result, workers earnings have actually dropped. It shouldn’t be that way and it doesn’t have to be.
You can check out the stats and the report: http://www.policyalternatives.ca/newsroom/…
Well… if one is dissatisfied with the level of social services they recieve, perhaps one should move to a jurisdiction with a higher level of services..
Hey Buck, Why are you suggesting people move away instead of fighting for the social services their taxes pay for? What a stupid idea.
Here I’ll cite a Feb. 5/11 column by the Globe’s veteran columnist Jeffrey Simpson, who is definitely not a left-wing commenter (to put it mildly). Simpson refers to the Focus Canada survey by the Environics Institute and reports that it “finds Canadians’ top spending priorities to be education, health care, elderly programs, the environment and reducing child poverty.”
We’ve seen what social protest can do in Egypt. Instead of moving away as Buck suggests, activists need to fight for what we want and are paying for here. After all, those of us who want social justice are actually in the majority.
Bruce, comparing Egypt to Nova Scotia or Canada is inane and you know it. But thanks for trying to sensationalize it. And I’m sorry if you think it’s a crime to be rich. I’m definitely not rich but I don’t complaining woe is me.
If you truly want to bitch about wealth, stop bitching about corporations and start on the insane salaries of Sports and Entertainment per season, not including endorsements. Hockey – Sid the Kid, $8.7 mil, Baseball – A. Rod, $33 mil, Basketball – Kevin Garnet – $25.2 mil, NFL, Carson Palmer, $13.3 mil, CFL – Casey Printers, $.5 mil (a hell of a lot more reasonable. Actors/Actresses – several in the $20+mil per picture club (most films are completed (for the actors) within 60 days. I could go on but you get the picture. So when you bitch about rich fat cat execs, remember they didn’t get their salaries at 18-25 (except some of the computer people), most achieve it well into their 40s and 50s.
Bruce: I don’t want to beat the driving costs thing to death, but I’ll leave it a bit more wounded. Regardless of what that CAA 2010 brochure says about “average” driving costs, the numbers quoted are for 3 representative 2010 models. And assuming that Nova Scotians aren’t all that much different from other North Americans, the average age of a car right now is between 9 and 10 years (RL Polk data).
Your contention is that maintenance costs for older cars make up the difference, and that we can therefore use the CAA 2010 numbers as a general guide for any car of any age. I dispute that. *My* average annual ownership costs are about $1500 at the outside, and my average annual operating costs – everything taken into account – for at least the past 5 years have been about $3500 (I make up for minimum car commuting by travelling in the province). So ~$5K per year with a 14 year-old Accord.
Anecdotal of course, but over the decades I haven’t gotten the sense from friends or acquaintances with older cars that they’d often tolerate non-routine maintenance costs of more than a few thousand dollars a year. Anything over that, again for non-routine maintenance, is a red flag for most people.
And don’t make unwarranted assumptions about class 20 vehicles. All that classification means is “Commercial Truck”. So it can – and does – include Mazda B2200’s, Chevy Trackers, Ford Rangers and Escapes, and so forth.
My fellow commenters’ criticisms (especially the disputes over exact numbers) smack of the distract-your-opponent approach of people on the defense: ‘Don’t look at what the left hand’s doing! Look at the right hand!’
No matter what the variance in private spending on vehicles, the amount of public money that gets spent in order to facilitate and regulate automobility – e.g., building and maintaining roads and parking, dealing with the environmental costs of vehicle use – is rarely scrutinized by those with the power to do something about it. And while many drivers complain about the inconvenience of road work, very few people get up in arms about spending on roads, or about the priority of roads ahead of social programs.
Regarding the point that athletes make too much money and are therefore better targets for our ire… where to begin? To say that we ought not focus on one type of wealth because another one exists is outright apologism for excess wealth in general. Moreover, while athletes and movie stars probably DO make too much, they are merely sources of entertainment. They will cease to get paid when we decide that $120 is too much to pay for a hockey game, or that $10 is too much to pay for a movie. That, or we’ll wise up and instate a steeply graduated income tax and kill two birds with one stone.
Corporate bosses make money by extracting labour from their employees and selling their products for more than they are actually ‘worth’ (i.e., they make a profit). They do this, often, on items and services we cannot reasonably avoid buying, either directly or through our tax dollars. To be sure, sports and movie stars get rich on the backs of people working low-wage jobs, too. But that doesn’t mean we need to direct dissent their way and spare the wealthy CEOs.
Finally, I’d like to propose that our job as citizens is not to concern ourselves with budgetary and logistical constraints, but rather to ask for the social services we want and hold our representatives feet to the fire in implementing them and making sure we can afford them.
Tom Hamilton commented: “the ultimate arrogance is assuming you can take someone else’s tax money and spend it on social programs according to your own beliefs and conscience whether it be the arts, welfare,free healthcare for immigrants, 3rd world subsidizes, environment, etc,etc.”
Um… the point of tax money is that you pay it and it’s not “yours” anymore. Moreover, by this logic, when are tax expenditures ever value-neutral? Since I don’t believe in NOT spending money on the arts, welfare, healthcare for immigrants etc., I guess all tax expenditures are the result of arrogant assumptions.
I think there is an important point that is being ignored here. Corporate income tax rates have plummetted in the last three decades coinciding with a shift of the tax burden onto citizens. This shift has been sold to us as necessary in order to maintain Canada’s competitiveness in the global marketplace.
With the final drop to %15 next year Canada will have the lowest corporate income tax rate in the G7.
As has been pointed out elsewhere in the media recently, the corporate income tax rate in the booming growth economy of the 1960s was close to %40.
Under the prodding of right-wing think tanks like the Fraser Institute, successive federal governments, both Liberal and Conservative, have engineered the off-loading of the tax burden from corporations and the wealthy onto the dwindling middle class and simultaneously managed to tag government ‘social spending’ as the culprit for middle class tax woes.
It was a simple plan and it worked. Now many Canadians fret that any impediment to the corporate agenda or any demands made on corporate profits will drive them overseas along with the jobs they offer, and taxpayers have been encouraged to direct their ire at any kind of social spending instead of at the corporate elite in this country who have successfully managed to avoid paying their fair share.
I irritates the hell out of me that I pay more income taxes in this country than many corporations.
Mr. Esposito, the corporate tax rate is lower than personal tax rates because corporations are not people. Corporations pay “dividends” to people, who are then taxed on that dividend income. The combined rate of the two taxes should approximately equal the personal tax rate on regular income. The entire Income Tax Act is designed to prevent people from taking advantage of any particular tax structure (like a corporation, income trust or partnership).
Also, your analysis seems to be based on the fact that the only difference between the 1960’s and today is a lower corporate tax rate. Capital flows more freely to tax havens in a global economy so it is a question of having low rates or having no companies located here.
Wark’s article is flawed in that it compares 1980 to today. Fewer people went to university back then, degrees were three years and Trudeau was spending up a storm. Society was subsidizing the few scholars at a time when high school education was suitable for most jobs. Now you need a BA to hang out on the street talking about Amnesty International and the Red Cross. To top it off, health care spending has grown immensely and with our aging population this trend will continue. I don’t see how we can make school more affordable without limiting access to the brightest pupils.
This is hilarious! We live in an increasingly car-dependent culture and spend a lot on cars so we should increase taxes and spend the same amount on other sectors!? And we could be just like Scandinavia if only we copied their tax system?!! Perhaps if we all work hard and write lots of articles we can achieve these lofty goals. I think I found some North Sea oil in my backyard! Let’s go!
Mr. WedgeClayport,
I thoroughly agree with your assertion that “corporations are not people”, although I sometimes wonder if you and I are the only two who still think so. Corporations are gaining ground in their self-serving quest to be treated like real people when the occasion suits them.
I also agree with you about capital flows in a global economy. Perhaps you would agree with me that this central reality of the globalization ideology makes a mockery of free trade supporters who profess admiration for someone like Adam Smith. His explication of “comparative advantage” wasn’t intended to support the free flow of capital to the jurisdiction with the lowest taxes, lowest wages and least regulation. But that hasn’t stopped economists and the business community from trumpeting globalization and free trade as being akin to fundamental laws of nature, like gravity or the second law of thermodynamics.
You’re right! In “the race to the bottom” we all come in last. We need to strike the best balance of regulation, tax and flexibility over these institutions. We definitely haven’t found it yet but it probably won’t involve 25% VAT and a Swedish-style welfare state.
Hey Realist in Dartmouth, your criticisms of my car cost figures made me revisit the massive 500+ page report on sustainable transportation in Nova Scotia published by GPI Atlantic in 2006. There is support there for your position that the CAA-Runzheimer driving costs are too high, but at the same time, GPI estimates total car costs in Nova Scotia in 2002 reached *at least* $6.4 billion ($7.4 billion in 2010 dollars) — a figure which far exceeds the provincial government’s current spending on social programs. However, to be fair, that figure includes all costs (including environmental, health costs etc.) and not just the ownership and operating costs that we were discussing.
GPI pegs NS 2002 household ownership and operating costs for private transportation (mainly the car) at $7,607 each. When adjusted for inflation using the Bank of Canada inflation calculator, that figure would reach $8,661 in 2010 dollars. I realize though that this is an average per household figure and not a per vehicle one.
GPI calculated that ownership and operating costs reached nearly $2.8 billion in 2002, a figure which would amount to about $3.2 billion in 2010 dollars — just under what the NS government will spend on health care in the coming year. Here’s how GPI assesses the CAA-Runzheimer figures: “…these figures are national averages, only reflect the first six years of a vehicle’s operating life, and ignore various expenses such as parking, tolls, citations for traffic and parking violations, and repair costs after six years. They therefore tend to overstate depreciation and insurance costs, and understate other costs, such as repairs.”
Nevertheless, the report acknowledges that the Runzheimer estimates are substantially higher than GPI’s: “As indicated in Table 40 below, vehicle ownership and operating costs for Nova Scotia in 2002 averaged 28¢ per vehicle-kilometre driven. It should be noted that the total vehicle ownership and operating costs, based on Statistics Canada household expenditure data, and used for these calculations (nearly $2.8 billion/year or $3,000 per capita) are low compared to the CAA cost estimates for 2002, which total over $4.7 billion, or $5,000 per capita in Nova Scotia.”
If we take the GPI approach, my editorial should not claim that Nova Scotians spend $5.3 billion just to own and operate their private cars, (a figure greater than government spending on health and education combined), but instead should say that the total cost of cars outstrips all government spending on social programs in Nova Scotia.
In other words, no matter how you slice it — or whose figures you choose — automobility is a hellishly expensive addiction. When car sales rise, the media report it as good news. When public health care spending rises, it’s bad news. Unfortunately this biased framing fails to reflect reality.
Interesting article Mr. Wark, but just to clarify police estimated 2000 to 3000 students on the streets of Halifax on February 2, 2011. Not hundreds. Thousands. Students are unhappy and reject tuition increases of any kind.
Rising health care is a bad thing. Isn’t the point of a health system to keep people healthy. Almost every household has a vehicle and one would hope very few using the health system because they don’t get sick. For example I use my vehicle everyday for a year. In the same year I used the health system once, for a regular check up. So of course my vehicle use is going to cost more than my health care. I daresay the majority of people are in the same boat. Also like you said over 600,000 vheicle registrations compared to maybe if you’re lucky 25,000 secondary students, including universities, NSCC, and private career schools. So Bruce, please stop comparing apples to oranges.
Bruce.. the problem is that we have too many people who are unwilling (or unable) to pay for the level of services they demand. It is far better that the poor (and unproductive) move to a jurisdiction that provides a higher level of services than it is to demand that that the productive pay more in order for them to stay here. Otherwise, the productive may decide to move elsewhere.
Hello all, Well you never know as a writer what subjects will strike a chord, but thank you all for responding so massively to my editorial on car spending vs. social programs. Truth to tell, I gritted my teeth and shouted curses at some of the comments (sorry, Mom), but then, I learned a lot too. When I win the lotto 6/49, I’m taking all of you out for a night on the town! Wear your party hat, Bro Tim — and leave your wheels at home. I’ll lay on stretch limos!
All my talk about GPI Atlantic reminded me that I actually did some unpaid work for them way back in 2003 on one of my favourite subjects — the constantly rising costs (and frequently diminishing benefits) of technology. Here is a link to the then, quarterly publication “Reality Check” in which GPI reports on the “Boon and Bust of Technology”. One of the articles deals with car spending. http://www.gpiatlantic.org/realitycheck/re…
My ideas on technology were formed reading Jacques Ellul’s “The Technological Society,” “Propaganda” and “Perspectives on Our Age.” Neil Postman’s “Technopoly” and “Amusing Ourselves to Death” are also useful. But if you want a really in-depth and neutral understanding of how we got to where we are, read: “The Control Revolution: technological and economic origins of the information society” by James Beniger.
Hugs and kisses readers,
Bruce
Bruce: I’m sympathetic to arguments that bemoan the Total Cost of the Car, in other words including the cost of roads, and environmental effects, and building in some factor for how roads enable sprawl. I was mostly just nitpicking the cost component that CAA put out there. There’s no doubt in my mind that the total cost of “automobility” is in fact hellishly high, as you put it.
I don’t own a car and never even got my drivers license… And I paid my way through school with part time jobs, savings from jobs, and never took out a loan. Mommy and Daddy aren’t rich and couldn’t do much more than buy me some groceries now and then.
I lived at home, in the basement, and didn’t get much of a social life because of that.
But I never thought to complain to all of the other hardworking people that they should give me more of their money so that I can go to school for less money. Interesting generation we’ve got here…
No Kayr, you misunderstand, I believe most people have no problem paying a portion of their hard earned paychecks for education, healthcare, national defense and other priorities, it is the higher level of taxation and entitlement spending that ultimately occurs under left wing and socialist governments and supporters. The NDP in Canada and Democrats in the U.S. are amusing because they constantly try to paint the right as arrogant and what is more arrogant than laying claim to more of someones pay cheque in the form of higher taxes because your beliefs include providing healthcare to illegal immigrants and so on. Thankfully, most people get this and the NDP never gets more than a 1/5 of the federal vote. I can’t imagine a dumber comment than the one you made ” I’d like to propose that our job as citizens is not to concern ourselves with budgetary and logistical constraints”, yes lets all end up like California and spend spend spend…… you dope.