Preville on Politics

Crash course on the Canadian economy

Posted on June 14, 2007 by Philip Preville

If you’ve ever bothered to peek at my blogroll down there on the right, you may have wondered why I bother linking to Statistics Canada. Here’s why: Anyone who’s interested in getting tomorrow’s news today should subscribe to StatsCan’s bulletin, The Daily. At least twice a week you’ll find information in there that will serve as fodder for the next day’s headlines. Like this tidbit from today, from which it’s easy to deduce that income taxes will likely make a comeback as an election issue.

The tax issue has been pretty much dormant since 2000, when the federal Liberals campaigned on income tax cuts and killed Stockwell Day’s leadership of the political right in the process. But StatsCan’s new numbers show that income taxes collected by all governments in Canada—federal, provincial, territorial and local—are up by 31% over the last five years. If you exclude the federal government from the calculation, income taxes are up by 40% in just three years. Some of the increase has to do with low unemployment—more people working means more people paying tax—but a good deal of it comes from tax increases. It’s enough to make bile drip from the chin of the Canadian Taxpayers Federation.

And here’s another interesting StatsCan factoid that all Canadians should know: governments in this country will spend more than half a trillion dollars in 2007. The significance of the figure lies in the fact that Canada’s total economy amounts to roughly $1.1 trillion. In other words: half of our entire national economic output comes from government spending. This state of affairs is neither inherently good nor bad, but it does tell you something about just what a crucial role governments play in creating and maintaining the country’s wealth, even in Canada, which boasts one of the freest market economies in the world. Here endeth today’s lesson.

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Philip Preville

Veteran freelance writer Philip Preville lived much of his life in Montreal and Edmonton before he was lured, like so many Torontonians before him, by the promise of more work and a better living. A National Magazine Award winner and former Canadian Journalism Fellow at the University of Toronto’s Massey College, Preville writes Toronto Life’s politics column. He lives with his wife and one-year-old son in Riverdale, just close enough to the Don Valley Parkway that he can hear it when he steps outside his house—but just far enough away that it doesn’t keep him awake at night. On his office wall hangs a 1938–39 press pass belonging to his grandfather, Elias Gannon, who wrote for the Montreal Star.


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