Liberal Finance Minister Bill Morneau in the House of Commons, did not answer financial questions from the opposition regarding spending. ( CPAC)

Tax Freedom Day: This year in Canada it’s today, May 19

It’s called tax freedom day because if you had given the government every single penny you earned from the start of the year, today you would have paid off your taxes to municipal, provincial and federal levels of government.

The concept originated in 1948 by a Florida businessman and has spread to many other countries.

In Canada the conservative leaning non-profit Fraser Institute calculates the figures, not without some controversy though.

This year the Canadian think tank has calculated that as of today the average Canadian family (two or more people) will have paid $43,681 in such things as income taxes, sales taxes, property taxes, fuel taxes, and the carbon taxes (which was increased again in April) to name a few. That’s 37.7% of an estimated average combined income of $115,753.

Last year the day fell on June 8, but the institute notes that the earlier date this year does not mean things are better for Canadian taxpayers.

They say it’s due instead to Canadians loss of work or work hours meaning a lower income which in turn means people end up in a lower tax bracket. It’s also the result of less spending on consumer goods which in turn means having paid less tax.

Meanwhile, as the Liberal government spends to mitigate the effects of the economy, hammered by COVID-19, analysts and editorialists are increasingly concerned about this years deficit and debt.

Parliamentary Budget Officer, Yves Girous says it’s hard to keep up with federal spending on COVID-19 measures. (Adrian Wyld- CP)

The non-profit Canadian Taxpayers Federation has estimated the growth of the federal debt to be over a whopping $690 million, per day. The CTF  ‘debt clock’ shows federal debt spinning higher by the second from over $743 billion.

In April, Parliamentary Budget Officer Yves Giroux estimated the debt this year would be some $962 billion noting that a trillion dollar debt was possible. A trillion dollars is a million millions, or a thousand billions. The PBO also said the deficit would be $252 billion, but noted that with continued spending announcements by Prime Minister Trudeau, that they couldn’t keep up and the estimate was “an optimistic scenario”.

At least one firm, McQuarie Capital Markets Canada estimates this year’s deficit could rise to $400 billion.

“Deficits are essentially deferred taxes, so future generations of Canadians will have to pay significantly higher taxes for the unprecedented deficits governments across Canada are running,” Niels Veldhuis, President, Fraser Institute

Previously pressed on the issue of government plans to raise taxes to pay for these emergency programmes, Liberal Finance Minister Bill Morneau deflected the question saying the government was focused on helping Canadians now.

Pressed again this past week by Conservative MP Pierre Polievre,  Morneau again deflected questions on spending,

Business and personal taxes by the way were introduced as ‘temporary’ measures in Canada in 1916 and 1917 to fund the debts incurred by spending during the First World War. There are concerns now that any new and increased ‘temporary’ tax introduced by the Liberals to pay for the massive spending, may also become not so temporary.

Additional information – sources

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