[mac_quote person=”Stephen Harper” date=”March 28, 2011″]Thanks to our low-tax plan, the average Canadian family is already paying $3,000 less in taxes each and every year.[/mac_quote]
This is one of the cornerstones of the Conservative narrative in this campaign. As John Geddes pointed out in Maclean’s last week, the $3,000 a year figure comes from Department of Finance calculations based on a hypothetical working couple with two kids earning about what the average family of four makes in a year: $100,000 before tax. Thanks to policies implemented since 2006, the department wrote, that family pays $1,963 less in income tax, receives $76 in child benefits, and reaps $960 in savings from the two-percentage points cut in the GST.
Now, since 960 is two per cent of 48,000, that last GST savings number seems to indicate that Canadian families spend around $50,000 a year in purchases of goods and services subject to GST. According to Statistics Canada, the average Canadian family indeed shells out $50,734 a year in expenditures, but that includes GST-exempt items as well, which might add up to a substantial slice of that total figure. The typical Canadian family, then, must be spending less than $50,000 a year in GST purchases–though we don’t know exactly how much less. So how did the Finance Department come up with $960? They couldn’t give us a breakdown of their calculations, but they told us that figure includes unspecified “indirect savings” coming from the fact that a lower GST also supposedly depresses prices for a number of tax-exempt goods and services.
Fair enough. Statistical estimates of this kind often take into consideration a complicated web of factors, and this could have been a zero bull story. Still, because we don’t know how much those “indirect savings” are, we’re giving it one bull.
Heard something that doesn’t sound quite right? Send quotes from the campaign trail to firstname.lastname@example.org and we’ll tell you just how much bull they contain.