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Tax cuts can leave deep wounds
Dec. 12, 2005. 01:00 AM
CAROL GOAR

Her voice was indignant, her eyes pained. "Have they forgotten already?"
Fiona Nelson asked. "Why would people want tax cuts after what Ontario has
been through?"

Nelson, 71, a tireless children's activist and member of the Toronto Board
of Health, has spent a lifetime fighting to make sure all of Toronto's kids
have enough to eat, a chance to learn, a roof over their head and a safe
place to play.

She watched in disbelief, a decade ago, as former premier Mike Harris
dismantled everything she'd worked for to pay for his tax cuts. Student
nutrition programs were chopped. English-language training was slashed.
Affordable housing projects were cancelled. Welfare rates were cut. The
province's schools turned into war zones between teachers and the
government.

Finally, in 2003, Ontarians decided they'd had enough and voted the Tories
out of office.

Now, a mere two years later, tax cuts have bounced to the top of the
federal election agenda. All of Canada's national parties are peddling
plans to give back money to taxpayers.

It's not clear that Canadians actually want tax cuts. Every time they're
asked, they identify health care, education and clean government as higher
priorities.

What is clear is that they're going to get them. With the Liberals,
Conservatives and even the Green party committed to across-the-board tax
cuts and the New Democrats promising targeted relief, there's no effective
way to stop them.

It's curious that all four parties are running on platforms that appear to
be at odds with public sentiment. It suggests that they (or their marketing
teams) know something that voters haven't articulated.

It could just be that self-interest is a powerful motivator. Many electors
who profess to care about social programs will opt for tax cuts in the
privacy of the polling booth.

Or it could be that swing voters — those whose support the parties are
vying for — care more about tax cuts than the rest of the population.

But there is a third, more unsettling, possibility.

What the parties might be sensing is that Canadians are so frustrated by
the mismatch between their dollars and their priorities that they'd rather
just keep their money.

Ottawa collects more revenue than it needs, yet it can't fix health care.
All it can do is transfer funds to the provinces in a process so opaque and
confrontational that it leaves taxpayers disillusioned and dubious that
their money is actually reaching hospitals, clinics or doctors' offices.

Ottawa records multi-billion-dollar surpluses, yet it can't shore up the
weaknesses in the education system. All it can do is pass on cash to the
provinces, hoping they'll direct it to the kids who drop out of school, the
immigrants who can't get into English-language classes and the
undergraduates who are drowning in debt.

Ottawa's fiscal record is the envy of the Western world, yet Canada's child
poverty rate remains stubbornly high (17.6 per cent), hunger and
homelessness are on the rise and cities are struggling to pay for public
transit, immigrant services and after-school programs to keep kids out of
trouble.

Given that their money doesn't seem to be getting where it is needed, tax
cuts make a kind of grim sense to voters. They don't improve Canada's
quality of life, but they make it easier for individuals to buy services.

There is an obvious alternative. But none of the parties is talking about
it.

The nation's political leaders could correct the misalignment of revenues
and responsibilities. That would allow the provinces to improve social
services and the municipalities to solve local problems.

The premiers would be pleased to discuss it. The mayors would be delighted.

But Ottawa would end up with a smaller share of the tax pie. That means the
federal government would be less visible in Canadians' day-to-day lives and
MPs would no longer be able to claim credit for everything from child-care
spaces to new city buses.

No aspiring prime minister is going to propose that. So the system stays
broken and voters are offered tax cuts as a consolation prize.

Have voters forgotten the harm that tax cuts did to Ontario's schools,
hospitals, drinking water and social safety nets? It seems unlikely.

Why would they want more tax cuts? It might be because they have given up
on getting what they really want: Government that works for the people.


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Carol Goar's column appears Monday, Wednesday and Friday.