The Trudeau government’s policies reward dependence, not hard work

Opinion: While the government is right to tout the importance of hard work as key to a better life, its actions do not match this lofty rhetoric


 
Prime Minister Justin Trudeau answers a question during Question Period in the House of Commons in Ottawa, Wednesday, April 5, 2017. THE CANADIAN PRESS/Adrian Wyld

Prime Minister Justin Trudeau answers a question during Question Period in the House of Commons in Ottawa, Wednesday, April 5, 2017. THE CANADIAN PRESS/Adrian Wyld

It’s hard to argue with the Trudeau government’s rhetoric about how Canadians can achieve a better life. One of the first sentences in the most recent federal budget reads, “At the centre of the Canadian story is the middle class and the promise of progress: that with optimism and hard work, a better life is possible for everyone.”

While the government is right to tout the importance of hard work as key to a better life, its actions do not match this lofty rhetoric. In reality, the Trudeau government has implemented policies that encourage dependence on government—not hard work and independence. Policies that reward hard work allow Canadians to keep more of the money they earn. Policies based on cash transfers from government encourage dependency.

To support its rhetoric about hard work and progress, the Trudeau government often claims that it has cut taxes for middle-class Canadian families. After all, a tax cut would reward hard work and encourage independence. But that’s not actually what the Trudeau government has done for the vast majority of middle-class families.

While it did reduce the second lowest federal income tax rate (from 22 to 20.5 per cent), it also eliminated a number of tax credits (provisions in the tax code that reduce a person’s income taxes if they qualify), thereby increasing income taxes for Canadians who previously claimed such credits.

As our recent Fraser Institute study found, when the Trudeau government’s tax changes are broadly considered (including both the tax rate reduction and the elimination of these tax credits), 81 per cent of middle-class Canadian families with children are paying more in personal income taxes—$840 more per year, on average.

READ: The Liberals are sending dangerous signals to businesses and entrepreneurs

When recently confronted with this reality on the floor of the House of Commons, Prime Minister Trudeau did not deny it. He simply responded by pointing to the increased government transfers his government has provided to qualifying Canadian families—specifically, the Canada Child Benefit (CCB), a new transfer to qualifying parents with young children that combined several previous programs and increased the cash benefit.

To be clear, the CCB is a transfer program that fosters dependence on government; it’s not a policy that rewards hard work by allowing Canadians to keep more of what they earn. Essentially, the prime minister is saying the government will take more away from what you earn and give some of it back to certain families. This hardly fits with the government’s rhetoric on hard work and building a better life.

But it’s even more perverse than that. If Canadians families who receive CCB transfers do achieve success and earn a higher income, their cash transfers will be reduced—a disincentive to hard work and independence. (The specific amount the transfer is reduced depends on a family’s income level and number of children.)

If the Trudeau government is genuinely interested in rewarding hard work and helping Canadians build a better life, then it should look for ways to actually reduce taxes on middle-class families—not foster dependency through government transfers.

 

Charles Lammam and Hugh MacIntyre are co-authors of the Fraser Institute study “Measuring the Impact of the Federal Personal Income Tax Changes on Middle Income Canadian Families,” available at www.fraserinstitute.org


 

The Trudeau government’s policies reward dependence, not hard work

  1. From the ‘Fraser Institute’…….that says it all.

    • Trudeau is only interested in retaining power. If he can make more of the public dependent on his generous social policies the more votes he will secure. The question we must all ask is how will he pay for it if his government continues to attack the people who generate wealth and pay the bulk of income taxes in this country (Our top personal tax rates are already one of the highest in the G7). Look at the recent Private Corporation Tax proposals on July 18, 2017 and related press release, it made small business owners look like tax cheats. I am sure many are ready to pack their bags and leave Canada. Overall, I think most Canadians would like their government to find an acceptable balance between wealth creation and decent social policies.

      • Oh pul-eese

        Pack your bags and go.

    • The left hates the conclusions that they often draw, yet the Fraser Institute can always provide all the supporting data and can demonstrate full intellectual rigor for their analysis.

    • There is a reason that the msm rarely use left bias think tanks like the Broadbent Institute. LOL!

      I remember Broadbent calculations on Canadian “tax burden”. While Fraser told Canadian’s our effective tax rate is 40%. Broadbent published an effective tax rate of 11%. Really? My Canadian Family pays an effective tax rate of 11%. — not possible.

  2. EMILYONE, has got to be an NDP supporter. Their approach!

    Send me your hard earned money,we will look after you, don’t worry be happy.
    Personally I don’t want to be dependent but rather independent.

  3. Fraser Institute – yeah, TOTALLY unbiased….

    I am part of a two-income family with two kids under 18. My ‘transfer’ payment went down by $45 per month last year… and it’s down again this year by another $16. So that part is true – I got a raise at work and now I get less for my kids. AND, I can’t claim their dance classes, riding lessons, or Pathfinders like I could before. True, I couldn’t claim ALL of what those cost me, but $500/kid was $500/kid and helped to offset at least costumes and yearly sign-up to Girl Guides.

    Every governmental department needs overhauling. THAT’S where the savings can be found. And I don’t mean at the pointy end either, I mean starting at the top and working down from there. Too many empire-builders and not enough people working for the public good. Policies in place make it nearly impossible for someone to get out of the self-feeding circle of subsidies and hand-outs without ending up homeless.