Sunday, March 26, 2017

MP REPORT: Challenging a tax on a tax

Sun Mar 26th, 2017 6:00am Vernon Morning Star
The federal government has responsibilities to provide financial support to the citizens, provinces and territories of Canada. Federal government funds are raised through federal taxes, including the goods and services tax, or GST.  When I was approached by Vernon Coun. Bob Spiers to sponsor his petition that seeks to end the federal government’s charging of GST on carbon tax, I felt I had to say yes especially when I began to see how many people are unaware that there is a tax on tax. I found my latest Fortis invoice and sure enough, there it was- tax on tax.You can imagine my motivation to sponsor Councilor Spiers’ petition and support this initiative which is why I have worked with my colleague Mark Warawa, MP for Langley-Aldergrove, in supporting and introducing his bill initiated in the House of Common on March 20 that also seeks to eliminate the charging of GST on existing and future carbon taxes. I believe that Canadians deserve to take home and keep as much of their hard-earned pay as possible and I likewise acknowledge that taxes are necessary for governments to fulfill their responsibilities- to fund healthcare, schools, infrastructure and law enforcement. However, the necessity of taxes is not a license for government to pad its revenues by taxing tax.

My concerns about the application of GST were piqued last year when Budget 2016 forecasted a 21 per cent increase in the federal government’s GST revenues from 2015 to 2020. This figure did not make sense to me so I formally asked the federal government to explain how they calculated the 21 per cent increase and in short, the response I received was “taxable consumption.” This response left me wondering what this meant. Were Canadians expected to be buying 21 per cent more by 2020? Is the GST rate of five per cent going to be increased? Are more goods and services going to be subjected to GST? How on earth was GST revenue calculated to increase by 21 per cent? Well, the revelation that GST is charged on B.C.’s carbon tax was one indication before the federal government mandated that all provinces and territories have a carbon tax in place by 2018. Budget 2017 was presented this March 22 and guess what- the federal government is now projecting a 24 per cent increase in their GST revenue between 2015 and 2021.After running a $23 billion deficit last year and forecasting a $28.5 billion deficit for this year, the federal government is scrambling to increase its revenues by taxing Canadians, by taxing taxes.

Working with Canadians from coast to coast to coast, my colleagues and I were able to pressure the government away from taxing health and dental benefits and the federal government also backed away from increasing capital gains taxes in Budget 2017 but there is more work to be done to fight over-taxation.Please join the fight against tax on tax by signing petition e-713 which may be found online by searching for petition e-713.

Mel Arnold is MP for North Okanagan-Shuswap.

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