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Morneau is Flying Blind

Morneau is Flying Blind

Morneau is Flying Blind - Peter Diekmeyer (01/04/2019)

The Trudeau Government continues to resist calls for an overhaul of its complex tax regime. 

Yet Bill Morneau, Canada’s Minister of Finance, who was in town this week to address the Montreal Chamber of Commerce, wouldn’t name a single non-accountant that he knew who understands tax code.

Pressed by local media, the Minister admitted that he had no idea whether even his own university-educated daughters—who he has said are powerful influences on his political thinking—were able to complete their own returns. 

“The subject never comes up at the supper table,” he joked. 

Long-time tax reform activists greeted the news with a yawn. 

“The Minister’s answer speaks for itself,” says Aaron Wudrick, a director at the Canadian Taxpayers Federation. “Nobody understands the tax code because it’s absurdly complex.” 

Cracks in Canada’s centrally-planned economy

Less well-understood is the fact that even the brightest public officials can’t measure the far-reaching implications of the Income Tax Act and other complex legislation. 

That’s because much of the government’s spending comes in the form of increases in unfunded liabilities and hidden transfers caused by interest rate suppression. These expenses are kept off of the government’s books, making them almost impossible for activists like Wudrick to challenge. 

This in turn raises growing questions about the overall effectiveness of Canada’s centrally-planned economy, where public spending accounts for nearly half of GDP. 

Some examples:

1. Subsidizing electric vehicles, but giving bigger breaks for gas-guzzlers

Morneau’s proudest achievements include the government’s environmental record, notably the measures announced in his budget to support the electric car industry.

Unfortunately, the Canadian government also provides billions of dollars of much-larger subsidies to buyers of gas-guzzling cars, trucks and SUVs.

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