Once, early in my journalistic career, I interviewed a U.S. historian about the causes of the American Revolution. At the time, Quebec separatism was hot, and I was trying to construct a story showing that Quebecers had little to complain about in Confederation, at least financially.
Quebec’s government, despite being the richest of the have-not governments for most of the past half century, is the recipient of half of all equalization payments. Quebec comes ahead by $8-billion to $10-billion per year in terms of what its taxpayers pay into the federal treasury versus what its citizens and governments receive in return.
The American colonists, by comparison, felt they were groaning under a crippling tax burden. Many of their staples, they felt, were onerously taxed while they received little from England in return and had no say in how large the levies against them would be.
My point was: Quebec, a net beneficiary of Confederation, was chomping at the bit to break up Canada, while, compared to the 13 colonies, they had little to complain about.
So out of curiosity, I asked the historian what the level of taxation was in 1776 that caused the U.S. to declare its independence.
I will always recall his answer: “the equivalent today of about 5% to 7% of their income.”
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This is an excellent article by Gunter. The root cause of our fiscal problems at all 3 levels of government are a vicious circle:
First Government monopolies have a cost structure that is wildly out of control due to their wages being distorted by government unions holding the taxpayer to ransom.
Second, equalization payments in effect lift money from taxpayers’ wallets in successful regions to create welfare dependency in badly managed regions thus causing those taxpayers to ignore their fiscal problems.
2 quotes by Gunter deserve repeating:
“the civil service in Canada has grown by more than a third in the past decade and threatens to grow another 10% or more while Ottawa and the provinces attempt to save us from recession, what is really needed is not only more efficient government, but first far, far less government.”
“Quebec’s government, despite being the richest of the have-not governments for most of the past half century, is the recipient of half of all equalization payments. Quebec comes ahead by $8-billion to $10-billion per year in terms of what its taxpayers pay into the federal treasury versus what its citizens and governments receive in return.”
Also Steve, a commenter in the NP online nails it with:
“The largest proportion of government expenditures goes to salaries and benefits; wringing productivity improvements or reducing union membership through attrition or cutbacks is a Gordian Knot-sized problem ….Big government feeds big government unions and vice versa; who will step up to break the cycle?”
Who will step up to break the cycle? No one. The volume of public sector voters is now detrimental to the health of a “cycle-breaking” government. The only way to break it is for taxpayers to refuse to pay. Period.
When wages in the public sector are 30% higher than equivalent wages in the private sector – who pay the taxes to pay public sector employees and their gold-plated pensions, the private sector is working for the government, not the other way around.
The Income Trust flip-flop was a prime example of government wanting to collect taxes on after-tax invested monies in the private sector, in order to be able to pay government obligations to unionised public sector employees. Period.
I am ready to quit paying anytime. Are you? One of the policies of the WAP in Alberta is to trim wages and benefits to government employees – back to where they should be. Either that or cut out government employee pensions, altogether. As Danielle Smith stated “You can’t have it both ways”. Now, that’s a polittician I can support and do.
jt “Who will step up to break the cycle? No one.”
That’s because we’re fiddling around with non-events like proroguing instead of dealing with the reality of our problems. So us tea baggers need to jump on this.
Also, Gunter is pretty well plugged into the CPC so my HopeyChangey is that the proroguing is allowing for a major overhaul that we shall see in Flaherty’s March budget.
Furthermore, while I can’t stand McGuinty he has in fact been wrestling a little bit with equalization and government Unions. On the former he did a cross Canada tour a couple of years ago trying to drum up support to stop the bleeding out of Ontario for welfare to the Provinces. On Unions … he is de facto union busting when he talks about selling the LCBO etc.
Where are the Ontario PCs on these 2 subjects? Silent! That needs to change because it is quite possible that strategically the Liberals have a better chance of tackling unions than the PCs do; if the voters cotton on to that, we might get McGuinty for another term…yikes!
jt “When wages in the public sector are 30% higher” . Actually if you go to CFIB.CA you will see that with benefits public sector wages are 40% higher. This has to stop. Notice that a Liberal candidate Rocco Rossi for Mayor of Toronto is talking about outsourcing 50% of the services in order to demonstrate to CUPE unions how far out of whack they are with the real world. Where’s the conservative candidate to push this further? Silence! Yes , we need more Danielle Smiths , who incidentally worked for the CFIB.
Well, 30%-40% what’s the difference, so I’m outta date? It’s more than what I’m getting and I’m the one as well as millions of others who have to fork out our hard earned dollars to pay their pensions before we even get to use our money, to fund our own retirement. And that is the central point.
The mentality of our “public servants” at all levels is extortionist pay and perks. After Flaherty’s comments post income trust flip-flop, he isn’t going to break any rice bowls on our (taxpayer’s) behalf. That is why he did the flip. They got elected over it, then slapped voters with his flop. Ingrate! Neither is “Mister” Ignatief, Jack! or Gilles or our raft of kleptocratic provincial or mayoralities. All these clowns want their gold-plated pensions and they will make sure that there is no labour strife with any of their employees on pay and pensions on their watch - too many votes at stake.
Our whole tax system is set up to pay government while they renege on their “contract” to “us” and flip the bird to the ones who pay for it all. It cuts across all the political BS we are subjected to by any political Party. Just one great big Biker gang, mafia.
As for any politician “outsourcing” public sector jobs: they never should have been in “business” in the first place. The only thing any polititicain looks at are the “legacy costs” of his own employees. If he does can a few, it only means there is more left over to stuff in his own pocket, on exit.
Its too bad people don’t learn from the Ralf Klein experience here in Alberta. When Alberta was beggared by the Don Getty regime Ralf took an axe to the civil service and cut 10% across the board. Once the initial shock wore off surprisingly enough the moral went up amongst those who remained and many of those who left were glad to seek new opportunities. I happened to be in a provincial office for a week about that time and noticed that the people were happy cheerful and very productive. They even had a glee club that met at noon. A few days later I was in a federal office for a week. The nastiness, infighting, backstabbing made me very uncomfortable.
Its too bad that Quebec separation is no longer poopular with French Quebecers.