Canada doesn’t have a spending problem:

• Total government spending in Canada has dropped dramatically over the last 16 years. In 2002, total government spending in Canada as a percent of Gross Domestic Product (GDP) was 53%. In 2008 it was 39%. Governments in Canada have been cutting their spending levels for years. We don’t have a spending problem.
• The G7 is made up of the 7 largest economies with a democratic governance system. In 2008, Canada ranked third lowest for total government spending: Japan 36%; United States 37%; Canada 39%; Germany 44%; United Kingdom 45%; Italy 48%; France 54%.
• The Organization for Economic Cooperation and Development (OECD) is made up of the 30 countries with the largest economies and democratic governance. In 2008, Canada ranked as the 11th lowest when it comes to total government spending. We just don’t spend that much compared to other wealthy countries.

Canada doesn’t have a deficit problem:

• Canada is in the very best fiscal position of the richest countries in the world. In the G7, Canada has the lowest total government debt of all countries – by far! There’s just no reason to panic about government deficits in Canada.
• According to the International Monetary Fund (IMF), by 2014, total government debt for G7 countries is predicted to be: Japan (142%); Italy (123%); United Kingdom (91%); United States (83%); France (82%); Germany (81%); Canada (32%). Does that look like a worrisome position for Canada?
• Canada total debt burden today in 2014 will be less than half (32% of GDP) of what it was under prime minister Mulroney (70%) – when we hit the so-called “debt-wall” and needed to make massive cuts in government spending.

Canada has a revenue problem:

• In 1995 total government revenue in Canada was 36%. In 2008 it was 33%. A drop of 3% may not seem like a lot. But it actually represents a loss of about $50 billion a year in revenue for governments in Canada. That’s $50 billion that could be invested in health care, education, child care, public pensions and social services.
• That loss of $50 billion every year is the real reason governments in Canada say they can’t afford to invest more in public services and the workers who deliver those services.

Canada has a revenue problem because it has a tax fairness problem:

1. Personal income taxes

• Between 1990 and 2005, the total tax rate went up for low income Canadians and it went down for the wealthiest Canadians.
• The richest 1% of Canadians now have a lower total tax rate than the poorest 10% of Canadians.
• Tax fairness has been flipped upside down in Canada when it comes to personal income tax rates.

2. Corporate income taxes

• Canada is leading the race to the bottom on corporate tax cuts. We have the lowest corporate tax rates in the G7. Our corporate tax rates are way lower than the US – about 15% lower.
• Yet more jobs are not being created. And productivity in Canada has been declining for years.
• Why are our governments planning more corporate tax cuts at a time when they are running deficits?

Our governments need to fix the tax fairness problem. They need to ensure the richest 1% pay their fair share. And they need to stop the irresponsible corporate tax cuts. If they do that, there will be more than enough money too improve public services and the wages and working conditions of public employees.