The increasing demand on the pocketbooks of taxpayers is leaving the public angry and frustrated!
The Harmonized Sales Tax (HST) referendum is now underway to decide whether or not we go back to a PST and GST, a combination totalling 12 per cent, or stay with the 12 per cent HST. The proposed two cents per litre gasoline tax to help fund transit improvements by TransLink and the Evergreen Line is all the rage on the radio talk shows.
Environment Canada is calling on Canada's cities to upgrade sewer and water infrastructure that could result in cities spending up to $20 billion over the next 20 years.
I look at these and other funding demands and despair at the dysfunctional political and tax systems. We are over governed and our tax systems are out of control. Most of our tax money goes to the federal government. Apart from funding Revenue Canada, pensions, defence and transfer payments, it is hard to determine where they spend all the money.
Provincial taxes make up almost as much as the federal take. In Victoria, the budget is almost entirely made up of health and education expenditures with very little room for other initiatives.
Local governments across Canada take in four to six per cent of the total tax pie. With this paltry percentage we are expected to provide most of the services Canadians use in our everyday lives.
The problem for all three levels of government is that 98 per cent of expenditures are fixed: paying for programs the public expects. In addition, these programs are supplied by publicly funded civil servants whose salaries make up a huge percentage of government budgets.
Elected MPs, MLAs and city councils probably get to allocate just two to three per cent of budget expenditures in any given year.
In addition to large compounded budget increases each year, the fragmented allocation of the tax base only compounds the inability of our elected representatives to control the demand for increased tax revenue.
At the local level for example, mayors and councillors appointed to the Metro Vancouver board vote every year to increase water, sewer and garbage rates to pay for infrastructure. Our utility bills are rising faster than our property tax bills.
This unelected regional body is driving up taxes to meet ever rising standards of sewage treatment, drinking water purity and garbage disposal, reacting to provincial and federal mandated regulations.
The senior levels of government and Metro Vancouver pat themselves on the back for doing the "right thing" without having to be accountable for the cost.
Fire and police labour costs rise every year at rates faster than other civil servants because they are set by arbitrators not responsible to taxpayers. Federal agencies such as Port Metro Vancouver decide not to pay its fair share of property taxes because it disagrees with the property assessment. Meanwhile, TransLink's appointed board wants regional mayors to approve an additional $70 million annually to fund transit expansion.
There is no one elected body that is responsible for all these cost drivers. There is no one who can prioritize expenditures, no one who looks at the total tax bill that residents have to pay, no one to rein in the arbitrators and unelected boards that set wage rates or drive programs and no one that the public can hold accountable for tax increases at election time.
Tax increases from all sources taken together are much higher than the increase in income levels (if any) that the vast majority of us enjoy. The existing level of expenditures, the unfair allocation of the revenue stream between the three levels of government and the lack of oversight by one accountable and elected body, means that rising costs are not sustainable without seriously eroding our standard of living.
