Canada will be venturing down a long and painful road. Conservatives previously promised that they wouldn’t raise user fees as they started cutting spending across the country. It turns out that as many as a dozen federal departments intend to raise user fees as shown by government documents.
One of these departments, not surprisingly the most effected by upcoming cuts that are aimed at slaying a $32.3 billion deficit, is Parks Canada which will be recapturing its lost revenues by taking it from its visitors.
New user fees will be proposed ranging from camping and entry costs, along with a price increase to the usage of fishing licenses and hot pools. Officials said that camping fees are too low and will likely be inline with inflation and the cost of living after a 3 year price freeze.
Private businesses are not exempt of these hikes, it will cost a lot more to renew licenses on park property.
About $1.8 billion dollars is raked in by existing user fees.
Treasury Board President Tony Clement said that user fees wouldn’t be part of the deficit slaying plan but 13 departments will be updating their fees. Most have said that they are only going to ‘change’ fees but haven’t given any details.
The Parole Board of Canada will be increasing the cost to pardon from $150 to $631.
Health Canada will be more than doubling fees for drug and medical-device companies too help cover the cost of safety regulation.
Some of this activity will require legislative changes to the User Fee Act.
After reporters floated the idea of user fees around on June 13, clement said. “We don’t think that taxpayers should be taxed more or should be user-feed to death. There’s lots of ways that we can get to a balanced budget without additional user fees on Canadians.”
Clement’s office explained that just because the minister is ruling out user fee hikes as part of the plan, federal departments can still decide to raise fees if need be.
Officials at Parks Canada were in tune with what the ministry said.
“We’re not getting increases, nor do we expect to get increases to support those types of activities from appropriations [from Ottawa],” said Andrew Campbell, Parks Canada’s director general of external relations and visitor experience. “So as the cost of delivering those services goes up, we expect to raise the fees in order to do that.”
On the line of budget cuts, the largest effected Government Departments are Heritage Canada and Environment Canada.
As a result of Conservative spending cuts, over 4,246 public sector jobs will disappear.
These spending cuts come amidst further tax cuts for corporations and come three years after the Conservatives finished cutting the GST by 2%. It stands to reason that the Conservatives don’t want to reverse the cuts that they made to the most unpopular tax that Mulroney brought in, however, a 1% hike would solve most of their balancing problems.
A left-wing think tank estimated that the cost of cutting the GST by one percentage point, which is the equivalence of a saving of 1 cent per dollar spent by tax payers, or $1 dollar per $100 spent, was $34 billion.
A 1% tax hike, which is painless in comparison to the cuts that will leave over 4000 people without jobs would not only slay the deficit, but it would also save those 4000 jobs and perhaps even create new ones. Canada would even have a $2 billion surplus.
The doubling in fees that Health Canada intends to impose just makes the cost of healthcare increase as provinces rely on federal transfers to be able to cover its users under Medicare and as these costs continue to balloon, Canadians have every reason to fear the privatization of Canadian healthcare under the Conservatives. But if they increased the GST by 1 measly percentage point, our healthcare would be safe.
For those that don’t like the idea of raising taxes, then the only way to fix the economy is to get money back into the system. Who in their right mind is going to spend a dime in a hostile environment where they are deep in debt and are afraid of losing their home, and worst of all, their jobs? The recession may appear to be over, but as long as markets remain unstable, Canada is bound to be taken with it, and its economy is in a very fragile state.
The Conservatives seem to think that cutting red tape and taxes for corporations will create jobs and fix the economy. It is the lack of red tape that has led to a monopoly where Canadians are among the worst served in terms of internet and telephone services. The solution to that is for the CRTC to force competition and utilize the benefits of capitalism.
They seem to think that if they give companies money, CEOs won’t be greedy and pocket it, but instead open doors to new jobs and upgrades to their companies.
However, corporate tax is a losing situation. Cut it and you squander money that can be used to keep Canada’s programs protected. Raise it, and the companies order higher markups on consumers to retrieve lost funds. In terms of corporate taxes, best not touch them any further and let the damage be done.
Meanwhile, the CEOs of the largest American Companies treated themselves with a median of 23% pay raise off the stimulus and tax cuts they received. Bonuses have tripled from their prerecession statuses and the New York Times showed the CEO gains (in the graphic below) as the American economy continues to struggle. What is important to note is that greed is in human nature and if it is happening in the United States, it is bound to be happening in Canada too. CEOs in Canada don’t have bigger hearts to deny pay increases than in the USA. It is nothing more than business, money is more important than repercussions.
Since 2009, only 1% of American national-income growth went to everyday workers’ wages and salaries while 88% went to corporate profits.
If the trend continues, expect the debt to get larger, and expect a rocky economic road. If money doesn’t flow, the economy stops rolling.
In the end of the day, Canadians can expect a painful road to recovery that wasn’t completely necessary. Raising corporate taxes will only hurt consumers, cutting them hurts our recovery.
Raising the GST by only one percent is the quick way to get out of deficit that doesn’t require slashing programs that have repercussions down the road. Cutting red tape has given corporations to rule the economy without caring about the consequences of their actions. Imposing new red tape would make Canadians safer, and would reduce the price of services, and if Britain is a model for the internet market, company profits will spike as a result.
It is time for the Government to find a vision for Canada and do its job and mold it. Rather than be irresponsible and cut programs and hand over the future of our country to companies who will eventually be bought out by others – Canadian or non-Canadian, maybe it is time you plot a road map, decide how you want Canada to look and mold it to meet its full potential.
Canada can afford its services, they just need to be better organized and thought out to find efficiency. Canada doesn’t need high taxes (a 1% hike to the GST is already enough) and $70 billion in new spending either, its current framework is already very flexible considering you know how to mold it.
The free market hasn’t worked, maybe it is time to control the wild and mold it into a masterpiece.