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By Kip Wood (he/him), teacher, Nanaimo

Justice Minister David Lametti introduced Bill C-22 in the House of Commons in February 2021. The aim of the bill is to repeal 14 mandatory minimum sentences in the Criminal Code and 6 mandatory minimums in the Controlled Drug and Substances Act. Currently there are more than 70 mandatory minimums in the two statutes above. According to the federal government website, Bill C-22, which has not yet been enacted, is “to address the over-incarceration rate of Indigenous peoples, as well as Black and marginalized Canadians.”

A year after the introduction of Bill C-22, the government has a problem: the burden of past decisions. If Bill C-22 is enacted, the government risks being attacked by opposition members who favour punitive measures. While the words “tough on crime” imply that a government is committed to reducing crime rates, repealing these “tough” policies makes a government appear “soft on crime,” a position that does not inspire confidence. It was politically easy to bring in mandatory sentencing; it will be politically difficult to end the practice.

Past decisions on tax policy are also difficult for governments. Reducing taxes is popular and easy to do; raising taxes subsequently is not popular, and governments can pay a political price for doing so.

Our provincial government is in a difficult position because we are now a low-tax province. For taxable incomes up to $146,000 (about 98% of income earners), BC has the lowest tax rate of the 10 provinces. This situation was not arrived at by gradual means, but rather by a single decision by government 20 years ago.

In March of 2021, I filed my tax return and looked at my tax assessments from the past three decades. I noticed that I am paying less in taxes, as a percentage of total income, than ever before in my career. Comparing assessments, I found the following:

  • My overall income tax rate fell from 28% in the decade leading up to 2001 to 15% in the two decades that followed.
  • Federal taxes and provincial taxes both decreased over this period.
  • Provincial taxes were reduced more than federal taxes, which means that now a greater percentage—almost three-fourths—of my tax dollars are going to Ottawa.

The shifts above were influenced mainly by a single political decision in Victoria that occurred in 2001: a 25% “across the board” cut to provincial income tax rates. With tax revenues plummeting, the government decided to reduce spending “across the board.” Teachers know this history well. It was the beginning of the cutback years that lasted until 2017.

Last year, the current provincial government made the most significant change to provincial income tax since 2001 by putting in a new tax bracket. Starting in the 2020 tax year, any income above $220,000 will be taxed at 20.5%. This measure was a positive step; however, an income level of $220,000 applies to barely 1% of income earners, and the revenue generated by this additional tax bracket increased provincial revenues by less than 1% (see the government’s Budget and Fiscal Plan, 2021).

Political decisions over the past 50 years or so have made the income tax system, provincially and federally, less progressive. In other words, the highest incomes are taxed at rates closer to those applied to lower incomes. Those decisions were abrupt and, politically speaking, difficult to undo. It’s easier for governments to reduce tax rates than it is to raise them.

Setting tax rates in the future depends largely on decisions in the past that have significantly reduced the taxes we pay. Now, as governments set priorities—pandemic recovery, climate mitigation, affordable housing, health care—important questions must be considered:

  • Are we stuck in a low-tax society where the needs of people are neglected?
  • In a low-tax society, do we stop believing in collective solutions?
  • Do we stop believing that the purpose of government is to improve the lives of people?

Will the burden of past decisions on crime be insurmountable for Trudeau’s minority government? Will Bill C-22 simply fall off the legislative agenda? And in a post-pandemic world, will the burden of past taxation decisions be too difficult for governments hoping to be re-elected? Or will governments have the courage to collect tax revenues that match the needs of society?

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Category/Topic: Teacher Magazine