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When Pierre Poilievre says “no new taxes,” he means no new taxes for the rich.
In his first address to the Conservative caucus, Poilievre made it clear he’s returning the party to a hard-line, anti-tax agenda. Matched with his proclamation of being on the side of workers and seniors, the hypocrisy is striking.
His rationale goes something like this: average folks are paying too much in taxes, which gives the government too much revenue, which it spends irresponsibly, which then drives up inflation. It’s a tidy story, but totally false.
While Poilievre would have us believe that most Canadians are paying higher taxes, statutory rates for low and middle-income taxpayers are the same rate as they were in Stephen Harper’s time, and in some cases a bit less. Data from Statistics Canada shows that the effective tax rate for the bottom 90 per cent is slightly lower than it was under Harper, although it is slightly higher for the top one per cent.
His finger-pointing at the carbon tax as a burden on working families also rings hollow, since the bottom 80 per cent of families will get back more in rebates than they pay. And while Poilievre complains about gas taxes, which governments use to fund public infrastructure, he has said nothing about the profits of oil and gas companies. We all benefit from public infrastructure — but only the executives and owners of oil and gas companies benefit from higher profits.
The new Conservative leader has criticized payroll taxes, but these primarily go toward services that help the working Canadians and seniors he’s talking about — those of us hit hardest by inflation, corporate price hikes and higher interest rates. In fact, we’ve shown how a pharmacare program funded through a flat 1.1 per cent payroll tax could save working-class households hundreds of dollars every year.
Poilievre’s complaints about “elites” chafes against his adherence to a “no new taxes” policy, which rejects addressing the egregiously unfair tax exemption for capital gains. While workers are taxed on every dollar they earn, only half of the money that elite owners get from buying and selling shares is subject to tax. As of 2019, capital gains accounted for almost a third of the income realized by the top one per cent.
And Poilievre seems to miss (or deliberately omit) the fact that a majority of Canadians, including conservatives, want to know why those who sit at the top of the income and wealth brackets aren’t paying their fair share. It’s a reflection of a harsh reality. Our economic system has allowed for wealth to be amassed by a concentrated group, while relative taxes they pay continue to decline.
According to the parliamentary budget officer, the top one per cent of Canadian households hold a quarter of the all of the wealth, while the bottom 40 per cent have a mere 1.1 per cent of the wealth. Decades of regressive tax measures, particularly lower rates of tax on business and capital, have had a significant role to play in wealth inequality. Progressive adjustments to our tax system could help reduce it.
Yet it seems no amount of wealth disparity or empirical evidence can sidetrack Poilievre from his mission to make tax a four-letter word. From his entry into Reform Party politics as a teenager in the 1990s, to his support for Harper’s huge and controversial corporate tax cuts, to his vote against a wealth tax, Poilievre has at least been consistent.
Government spending and inflation
Beyond the contradictions on revenue, Poilievre’s defence of working Canadians also contradict his positions on spending.
Government spending during the pandemic could hardly be called irresponsible, as Poilievre suggests. While not perfect, most would agree that it provided needed financial support to Canadians, stopped our health system from crashing, and kept Canada in a decent economic position for a quick recovery.
It’s also foolish to blame government spending for the inflation we are experiencing right now. There are many factors contributing to Canada’s inflation, including the corporate profiteering driving up consumer prices. On that, Poilievre is silent.
In truth, 50 years of experience with our low-tax market-based economy has done little to create inclusive prosperity, and instead worsened inequality.
Poilievre’s grand desire to bring the Conservative party back to a low-tax, small-government, free-market ideology — and proposal that doing so will somehow help low- and middle-income people — just doesn’t hold with the facts.
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