Canadians get more public services than they pay for
Families in middle 50 percent receive at least half their private incomes in benefits most take for granted - CCPA.
by Melanie Ogilvie and Ish Theilheimer
OTTAWA, April 21, 2009, PublicValues.ca, with YouTube video — The majority of Canadian households enjoy a higher quality of life because the public services their taxes fund come at a solid bargain, according to a new study by the Canadian Centre for Policy Alternatives (CCPA).
Canada's Quiet Bargain: The Benefits of Public Spending responds to incessant calls for tax cuts and concludes public services make a significant contribution to the majority of Canadians' standard of living - worth at least 50 percent of their income.
The study was an attempt to measure the dollar value of public services people use every day, often without realizing how present they are in our lives and what they're worth. "We go through our day from beginning to end and we really don't think about how much public service we're actually consuming," says study co-author, Hugh Mackenzie, listing through a day of public services that starts with turning on the tap in the morning, then walking out onto a sidewalk, using publically provided roads, schools, doctors, and so on.
"The list just goes on and on," says Mackenzie, a Toronto economist who wrote the study with Ottawa statistician Richard Shillington of Informetrica Ltd.. "And we're completely unconscious of it. That's a great strength because it speaks to the importance of public service to our sense of security. It's also a great weakness, he adds, "because when someone comes to your door and says: 'I'm going to give you something for free; I'm going to give you a tax cut', it's easy to forget what's paid for out of those tax dollars."
Public Values interview with study co-author Hugh Mackenzie:
The study shows middle-income Canadian families enjoy public services worth about $41,000 - or 63 percent of their income. Even households earning $80,000-$90,000 a year enjoy public services benefits equivalent to about half of their income.
The study also shows 80 percent of Canadians would be better off if the federal government hadn't cut the GST; 75 percent would be better off if their provincial governments invested in public services instead of broad-based income tax cuts; and 88 percent would be better off without federal cuts to capital gains taxes.
"Our taxes pay for services that are extremely valuable to Canadians," Mackenzie told Public Values. "The suggestion we often hear, that taxes are a burden, hides the reality that our taxes fund public services that make Canada's standard of living among the very best."
"It's really important not to let the glib premises that lie behind the tax cutters arguments stand," concludes Mackenzie. "I mean, everybody's heard them all: 'Get the government's hand out of my pocket. I'd be better off if I had my money to spend than if the government has my money to spend.' The fact is that the data show that neither of those things is really true. You get a huge benefit from the consumption that we do collectively."
Ish Theilheimer has been Publisher of the leading, and oldest, independent Canadian online newsmagazine, StraightGoods.ca, since founding it in September 1999. He is also Managing Editor of PublicValues.ca.
Melanie Ogilvie is Associate Editor of PublicValues.ca.