It is quite apparent that the Federal Government is corrupt - the $250 million sponsorship scandal is just one example of many [HRDC, Gun Registry, Corporate Welfare, Regional Programs, Kyoto…] of where government’s and their allies and paid supporters ride high off the public spending hog. If anyone needs to be reminded that big government IS the problem, then the current fracas involving the Chretien - Martin regime should be rather a poignant example of what is wrong in Canada.

Martin and his government are responsible as is Chretien and his minister’s for the wastage of taxpayer money on a variety of projects during the past 10 years. This is not only to blame the Liberals, Mulroney was hardly a paragon of honesty, spending reduction or tax reduction either. What then to do ?

First we should face the facts that government in Canada as Tony Clement recently stated is just too massive. According to Jack Mintz who is one of the foremost and eloquent critics of Canada’s high taxation regime - Government’s take 43 % of our GDP in taxes, transfers, user fees, resource royalties, deficit spending, crown corporation spending and municipal spending. This is crippling. Most economists state unequivocally that government transfers above 30 % of GDP hamper economic growth and wealth creation and actually on a marginal basis destroy more wealth then they create. This is especially relevant when you compare Canada " with no military system, little border controls and a woeful immigration system, free riding off the US " has 7 % more of GDP under government control than the US which has 35 % of GDP under government control.

Normalise for Canada’s free riding off the US military and we would " with normal military spend, border controls and security spend " have well over 46 % of our GDP under government control.

When your major trading partner and competitor has only about 35 % of its GDP under Government control the difference is staggering leading to wealth destruction in Canada and more perniciously a whole philosophy of self justification for WHY government must control so much of our economic and social affairs. This philosophy with no basis in historical empiricism or realistic assessment of reality is called Post Modernism. It is elitist, judicially biased and prone to historical revisionism. It is also morally and economically bankrupt.

Mintz in recent National Post articles has evinced some important points. We can list them here and summarise his observations

• Governments take $475 billion out of taxpayers each year or $15000 per capita
• In 1981 governments took only $10.000 per capita.
• In 1981 Ottawa took $4.900 per capita and this has risen to $6.100 by 2002.
• Provincial and municipal spending has increased by more than 65 % from $5.400 in 1981, to $8.900 in 2002 [inflation adjusted].
  
• OCED reports for 2001 state that Canada’s revenue to GDP ratio is 42% catching up quickly with Germany [46%] and France [50 %]. Considering the deplorable state of EU affairs this is nothing to be proud of.
  
• Governments elsewhere provide important social services at far lower costs.
  
• The ageing of our population makes social service reform inevitable if we are to avoid bankruptcy.
  
• High personal tax rates falling on middle class and lower income earners approach a marginal rate of 70 %.
  
• A person whose salary is in the 30 % tax bracket, who earns 4 % on a GIC, with inflation at 2 % faces an effective tax rate of 60 %.
  
• RRSP limits have not kept up with inflation and the limits are quite low. [only up to 18 % of earned income, forcing people to spend].
  
• Dividend tax rate is higher than the capital gains rate, meaning that firms do not pay dividends and instead buy back their own shares.
  
• Corporate income taxes are the 5th highest in the world and force firms to locate offshore.
  

As Jack Mintz states, "Economic studies have shown the taxes that have the most harmful economic effects are those on income and investments."

Not only are Canada’s tax rates out of line with our spending needs, our service needs or our competitive needs, they do not even address our free riding off the US military and drug industries nor the structure of our tax system which punishes work, savings and investments.

Who in Ottawa, Toronto, or City Hall has addressed these concerns ?

Certainly not Martin, McGuinty or Miller.

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