An adult conversation about taxes is beginning to take shape.
Way back in 2009, CCPA research associate Hugh Mackenzie published an editorial in the Toronto Star entitled “Can we have an adult conversation about taxes?”– a challenge to governments to start looking at their revenue problems in a grown up way.
This week, the Globe and Mail has published an important piece by C.D. Howe Institute Research Fellow Chris Ragan, pointing out, lo and behold, that Ontario has a revenue problem, not a spending problem.
Ontario’s trip down the tax-cutting rabbit hole has led to the slow erosion in the quality of public services and infrastructure – now, that’s deficit that deserves our attention.
At 11.5%, Ontario’s corporate income tax rate is third lowest in the country. Only British Columbia and oil-rich Alberta are lower, at 11% and 10%, respectively.
Had our corporate tax rate remained at 2009 level 14%, Ontario would have brought in an extra $1.8 billion in revenue in 2012. A family of four earning $90,000 a year pays the second lowest provincial income tax in the country – surprisingly, only British Columbia is lower.
In 2013, that dual income Ontario family of four earning $90,000 paid $3,926 in provincial income tax. In 1995, that same family would have paid $7,721.
As a result of this aggressive tax cut agenda, Ontario now has the lowest per capita revenue of any province in Canada.
Coincidentally, we’re also the lowest per capita program spender in the country.
Discussion of Ontario’s deficit (and how to slay it without affecting service delivery) is bound to heat up this fall. It’s a good time to start having that adult conversation about taxes. In fact, it’s about time.