Most Canadians say their tax bill is eroding their quality of life. A new MEI-Ipsos poll shows 67 per cent believe they pay too much income tax, and nearly half say they get poor value in return. Ottawa’s fiscal path is clearly out of step with the public.
From housing to trade policy, many feel squeezed by a government that has been living large. More than half say Ottawa is spending too much, while only six per cent believe it’s spending too little.
The list of wasteful federal programs is long. Between 2007 and 2019, Canadians handed over $352 billion in corporate subsidies at all levels of government (inflation-adjusted). These subsidies include tax breaks, grants and direct support for industries Ottawa believes should be boosted. In 2023-24 alone, Ottawa distributed the equivalent of $800 per Canadian in subsidies, with electric vehicle manufacturers among the biggest beneficiaries.
This generosity has gone hand in hand with a ballooning federal bureaucracy. Since 2015, Ottawa has added more than 110,000 employees, three times faster than the population has grown. Most of these positions are in administration and regulatory roles, not front-line services Canadians rely on. The cost of the federal workforce has nearly doubled, from $40.2 billion in 2016 to $69.5 billion today.
After a decade of expensive ribbon-cutting policies with meagre results, Canadians have learned the tax man isn’t a fix-all — he may be a wolf in sheep’s clothing. It’s the inevitable outcome of a government convinced it can solve every problem by inserting itself into daily life, from national security to school lunches.
But even if government can do more, the question remains: does it actually have the expertise?
On housing, Canadians are clear: 74 per cent say taxes contribute to unaffordability. They’re right. Over the past decade, municipal development fees have shot up 33 per cent. These fees, charged by municipalities on new construction projects, are meant to cover infrastructure and planning costs but often drive up the final price of a home.
Meanwhile, Canada ranks behind most OECD countries in the time it takes to get a building permit, thanks to the taxman’s ally, the over-regulator.
Rather than reducing these burdens, Ottawa has chosen to double down, pledging billions to act as a housing developer. Like Canada, New Zealand faces a housing affordability crisis. Its government tried a nearly identical program in 2018 and, after nearly seven years, delivered just three per cent of its 100,000-unit target — a cautionary tale Canada should heed.
Results like these erode trust. Today, only 46 per cent of Canadians believe Ottawa is effectively allocating funds to the country’s most pressing issues. And by making it costly and complicated to build, politicians also undermine trust in the private sector.
Demonizing the market may be politically useful but it is misguided. The free market works because both sides benefit from voluntary exchange, creating value as each party walks away better off. People want homes; developers want to build them. And they know how.
Human progress depends on the dispersed knowledge of the market. As Nobel laureate Friedrich Hayek noted, the knowledge we rely on never exists in concentrated form but as countless bits of information held by individuals. Consider the expertise, labour and relationships behind your car, your phone, even your morning coffee. No central planner could replicate that.
So if Canadians feel they’re getting a raw deal, who can blame them? Governments promise the sun and the moon. When they fall short, we’re left with a tax bill we can’t afford — and not much to show for it.
Samantha Dagres is communications manager at the Montreal Economic Institute, an independent public policy think tank with offices in Montreal, Ottawa and Calgary.
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