First off required reading: Public Accounts of Canada 2010
These documents outline every dollar spent by the Federal Government. The ones I focus on here are:
If you break down each Federal Government Department you can categorize the tax dollars spent in three ways:
- Department
- Other
- Transfer Payments
Department
This is the unionized bloated bureaucracy that is government. The pencil pushers, expense accounts, etc. that make government. A certain level of this is ultimately required in any government but as usual as the scope of government creeps this expands uncontrolled.
Other
The various departments have agencies (CBC, HRC etc.) that are under its jurisdiction.
Transfer Payments
These are the giant novelty cheque items that the Federal government uses to buy your votes. If you read the document you find all sorts of subsidies, bailouts and other personal & corporate welfare schemes. This list of all the transfer payments is depressing. It just goes on and on for 282 pages.
I have posted on this before and I call it ‘Debt by a Million Giant Novelty Cheques‘.
I personally think 95% of these expenditures should not even be made at all. But if you did indeed want these to be in the scope of government it should be local (i.e. municipal or provincial) not federal. These items are wealth re-distribution plain and simple.
The Federal Government should handle the bug picture items that impact all Canadians such as:
- national defense
- civil & criminal justice system (i.e. police, courts and jails)
- interprovincal jurisdiction issues
- international relations
So lets look at what the Federal Government spends its money:
Now lets look at the big picture:
Transfer payments are pretty equal to personal AND corporate income tax combined. If we off loaded all of these bailout, subsidies and welfare schemes on to the Provinces where they belong we could eliminate all income taxes (personal and corporate). I know am lumping these all together and there are some items that are ‘justified’ transfer payments but those are the minority.
There would now room for the Provinces to increase provincial income taxes to pay for the bailout, subsidies and welfare schemes that they choose to fund. If British Columbia wants to bailout the forestry sector then British Columbia taxpayers would pay for it. If Saskatchewan wants to bailout farmers then Saskatchewan taxpayers would pay for it. If Quebec wants $7 / day daycare then Quebec taxpayers would pay for it etc.
The reality would be that the Provinces would never fund these crazy schemes and the over all tax burden would drop significantly. The bigger impact would be the exponential growth of the economy which would benefit everyone including low income Canadians.
This is the problem with Federal politics. There are really no practical limits on what the Federal Government can do and thus you see what amounts to bribery. Vote for me and I will bring you a giant novelty cheque. To make matters worse we go into debt to keep paying for this. Its time to start talking about changing the system for the better.
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