October 2005 Archives

Taxpayers Federation Unveils Budget Measures

Dramatic Tax Relief Needed to Eliminate Ottawa’s Over-Taxation of Canadians

Ottawa: The Canadian Taxpayers Federation (CTF) appeared this morning before the House of Commons Standing Committee on Finance. Federal Director John Williamson presented the central pre-budget recommendations from the CTF’s submission, A Return to Fiscal Responsibility, for the 2006/07 federal budget.

The CTF’s agenda items include:

· Reducing the top two personal income tax rates by 3% – phased-in over three years – from 29% to 26% and 26% to 23%;

· Increasing both the Basic Personal Exemption and Spousal Exemption to $15,000 within four years to provide tax relief for all Canadians. This change will remove 1.8 million Canadians from the tax rolls and benefit the remaining 13.8 million taxpayers;

· Replacing the Canada Child Tax Benefit with a universal $10,000 per child income tax credit. The credit (or $1,600 payment) should be available to all parents with children aged eighteen and under;

· Limiting expenditure growth to a maximum annual amount of inflation and population growth;

· Instituting a legislated debt repayment schedule with annual payments of 5% of revenues;

· Redressing inequalities in the Employment Insurance payroll tax regime by lowering and harmonizing employer premiums with those of employees;

· Ending all corporate welfare and regional development programs, scrapping the federal gun registry, and abrogating the Kyoto Protocol; and

· Reducing the excessive mortgage insurance rates charged to Canadian homebuyers by the Canada Mortgage and Housing Corporation, and rebating them for existing owners to offset the $4.5-billion surplus this Crown corporation is projected to accumulate by 2009.

The complete CTF 2006/07 pre-budget submission is available at:

http://www.taxpayer.com/pdf/Federal_Pre-Budget_2006-07.pdf

Federal Spending is Unsustainable:

“Last year, Ottawa’s program spending jumped by over $21-billion, that’s an astounding 15% increase in a single year. Our tax dollars were squandered,” observed Mr. Williamson. “Increasing spending at such a pace is simply not responsible and highlights that Ottawa collects too much in taxes.”

Canadians Remain Over-Taxed:

“Multi-year and multi-billion dollar surpluses are the result of a structural level of over-taxation levied on Canadians by Ottawa,” said Williamson. “The simplest and best remedy for remedying over-taxation is broadly-based tax relief. The tax saving measures outlined by the CTF today will return $13.4-billion to Canadians next year and $41.4-billion in 2009.”

John Williamson
Canadian Taxpayers Federation

The Share of Income Tax Paid by the Rich

New from the Canadian Centre for Policy Alternatives, The Share of Income Tax Paid by the Rich: The Business Press Gives Another Lesson on How to Deceive with Statistics by Neil Brooks of Osgoode Hall Law School.

Despite recent reports to the contrary, Brook's report claims that Canada’s high-income earners do not pay a disproportionately large share of personal income tax. The report takes a closer look at the numbers in Statistics Canada’s “Tax Incidence in Canada” which sparked a series of news stories claiming the top 10% of income earners pay 52% of the total tax bill. Brooks finds these figures both misleading and incomplete.

The Share of Income Tax Paid by the Rich full report is available on the CCPA web site: http://www.policyalternatives.ca

11th Annual Canada - U.S. Cross Border Tax Update

The 11th Annual Canada - U.S. Cross Border Tax Update will be held from October 17 - 19 2005 at the Hotel Intercontinental in Toronto, Ontario.

Billed as "the most comprehensive and longest running conference on Canada-U.S. cross border tax issues" the conference will include workshop sessions on current U.S. and Canadian tax issues.

For more information see the Council for International Tax Education's web site or download the conference brochure.

Turning Taxpayer Anger into Voter Anger

To date, 150,000 gas tax petitions delivered to Parliament Hill

CTF pegs the cost paid by Canadian motorists of the GST tax-on-tax bite and the “deficit elimination” tax at $9.5-billion

Ottawa: The Canadian Taxpayers Federation (CTF) continues to speak out on the issue of high gasoline taxes. Today on Parliament Hill, federal director John Williamson unveiled 35,000 gas tax petitions calling on the federal government to cut gas taxes by 5 cents a litre. Last October, the CTF delivered 65,000 petitions to John Godfrey, Minister of State (Infrastructure and Communities). Another 50,000 gas tax petitions were presented to Paul Martin, then-Minister of Finance, in 2000.

“Because the prime minister and his finance minister say they will not cut the gas tax, the Canadian Taxpayers Federation opted to deliver the gas tax petitions to the Conservative Opposition,” stated Mr. Williamson. “We want to turn taxpayer anger over gas prices into voter anger at Ottawa’s gas tax gouging. The Liberals are not listening to the cries from Canadians to tax them fairly at the pumps.”

Calculating the cost of the “deficit elimination” tax (since 1998) and the GST tax-on-tax (since 1991):

“Since the budget was balanced in early 1998, the federal government has collected $4.7-billion from its 1.5 cent per litre ‘deficit elimination’ tax. This is an offensive tax that should have been repealed when the books were in surplus,” said Williamson. “In addition, since the GST was brought in the tax-on-tax scheme has cost taxpaying motorists another $4.8-billion. These two illegitimate tax measures have cost Canadians taxpayers $9.5-billion.”

In 1995, the year Ottawa’s gasoline tax jumped from 8.5 to 10 cents per litre the hike was labeled a “deficit elimination measure” by then-Finance Minister Paul Martin. Canada’s deficit was vanquished in 1997-1998, but the deficit reduction tax remains.

The GST and HST (paid in New Brunswick, Nova Scotia and Newfoundland & Labrador) are charged on the full pump price, gasoline taxes included. The tax is levied on Ottawa’s 10 cent per litre fuel excise tax as well as provincial taxes, which range from a low of 9 cents/litre to a high of 20.5 cents/litre. And as pump prices climb, Ottawa rakes in even more GST revenues. At current price levels, the federal treasury will collect at least another $300-million over the fiscal year.

“Approximately one third of the price of a litre of fuel in Canada is taxes. Taxpayers want action in the form of lower taxes on fuel, not more excuses from the government why gas taxes cannot be reduced,” concluded Mr. Williamson. “It is time Ottawa ended its gas gouging. This can be accomplished with three easy steps. Ottawa should end its GST tax-on-tax bite. This will lower the price, on average, by 1.5 cents a litre. It should scrap the ‘deficit elimination’ tax, which will save another penny and a half. Lastly, reduce the federal levy by 2 cents, bringing the total saving to motorists to 5 cents a litre. Theses modest measures will return $2-billion to taxpayers each year.”

John Williamson
Canadian Taxpayers Federation

Canadian Taxpayers Federation to Deliver Gas Tax Petitions to Opposition Leader

REVISION – Ottawa: The Canadian Taxpayers Federation (CTF) will hold a photo opportunity with Opposition leader Stephen Harper today at 1pm outside of the Peace Tower on Parliament Hill.

The CTF will present 35,000 gasoline tax petitions calling on the federal government to cut gas taxes. This brings the total petitions delivered to date to 150,000. Last October, the CTF delivered 65,000 petitions to John Godfrey, Minister of State (Infrastructure and Communities). Another 50,000 gas tax petitions were presented to Paul Martin, then-Minister of Finance, in 2000.

Following this event – at approximately 1:15pm – CTF federal director John Williamson will hold a news conference in the Charles Lynch press room (130-S) in the House of Commons.

The CTF is Canada’s largest taxpayer research and advocacy organization with over 72,000 supporters. Established in 1990, it is a federally incorporated not-for-profit, non-partisan, organization. The CTF is dedicated to lower taxes, less waste, and more accountable government.

John Williamson
Canadian Taxpayers Federation

What’s Behind High Gas Prices?

The Canadian Centre for Policy Alternatives has released What’s Behind High Gas Prices?, a short analysis of the current gas price spike by economist and CCPA Research Associate Hugh Mackenzie that sparked numerous news stories across the country.

The news release for the report appears below. The report can be downloaded from the CCPA web site:

http://www.policyalternatives.ca/Reports/2005/09/ReportsStudies1193/index.cfm?pa=BB736455

High gas prices unjustified—report

OTTAWA—The recent spike in gas prices constitutes nothing short of price-gouging on the part of the oil industry.

According to an analysis by economist Hugh Mackenzie released today by the Canadian Centre for Policy Alternatives, the Canadian oil industry has been taking advantage of public fear prompted by the devastating hurricanes in the United States and charging more than was justified by the increase in raw material costs.

Mackenzie looks at what’s behind the current high gas prices and finds that taxes have virtually nothing to do with the increased price in gas because, with the exception of the GST, all provincial and federal gasoline taxes are flat amounts per litre and don’t go up when crude prices go up.

While the price of crude oil has gone up, Mackenzie’s calculations find a 7-9¢ per-litre increase would have matched the crude oil price increase. “The 15¢ increase we’re now paying is profiteering,” he says. “And the 40¢ increase we were paying over the Labour Day weekend was just plain gouging.”

According to Mackenzie a reasonable price for gas in Ontario would be 95¢ per litre, about 10¢ less than the current price. A 10¢ per litre difference may not sound like much but every penny per litre generates an additional $1.1 million for the industry every day.

“For the period around Labour Day, when the difference between the price and what would have been justified by crude oil prices was much greater — as much as 45¢ per litre at the peak — the industry was bringing in $49.5 million in excess profits a day,” Mackenzie concludes.

Ontario deficit $1.6 billion

In a news release from the Government of Ontario, September 27, 2005, the Ontario government released its financial statements for 2004-05 indicating that it has reduced its deficit to $1.6 billion, down from $5.5 billion in 2003-04.

The news release can be found at:
http://www.fin.gov.on.ca/english/media/2005/nr09-pa.html