A Money Coach in Canada

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All caught up in the Susan Boyles and Antwerp excitement,  I missed an interesting tidbit that was also in all the news (exception the National Post, quelle suprise):

A brand new report found that most Canadians are getting a great deal from public spending, and receiving more than they pay in taxes.  The implication is that “tax cuts” are a short term high but ultimately we’re the losers.

Here are some facts that may challenge our notions about taxes:

  • A typical Cdn family uses public services that would total nearly 1/2 their total family income if they paid for them directly
  • Each Canadian uses approximately $17,000 worth of public services annually
  • Households with net incomes below $110,000 would almost all have been better off if the gst had *not* been reduced, and the funds instead transferred to local governments (to support schools, for example), whereas households exceeding $200,000 gain an average of $200 annually by the gst cut.

So when we hear about “tax cuts” we need to ask ourselves:  Who wins?  and Who loses?  If it’s a federal tax cut, it’s likely lower income groups (child payments, employment insurance, seniors payments).   If it’s a provincial tax cut, it’s likely middle-income earners (school, health, roads).

Readers, what do you think?  Does this surprise you?  And are you using more than you are putting in, right now? (stage of life plays into this).

About the Author

Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com


  1. Fansen

    No, it doesn’t surprise me at all. The lower income families of Canada probably don’t spend more than $200 a year in GST. So how much good did 1% GST cut do us anyway. I calculated that for me, it was no more than $34 per year.
    Before retirement I was a bookkeeper. You know who does win? Big business. In the business of my company, GST amounted to about $45,000 a year, for goods valued at approx $800,000 (we did get some breaks) 2% is $16,000, for this tiny company…. imagine how much savings it is for those purchasing $8 million a year.


    Apr 15, 2009
  2. That’s interesting, thanks for posting! I had no idea. So, the system is working, imho.

    ioana’s last blog post..Happy 4th Anniversary Love!


    Apr 16, 2009
  3. Looby

    Both my parents work for the NHS in the UK so I’ve always been a fan of public services and paying taxes for them.
    I don’t anticipate having children but I’m completely happy to contribute to public education.
    I do probably get great use out of the health care system, for the amount I contribute, because of a chronic medical condition I have; but as my OH hasn’t seen doctor in the 6 years I’ve known him, I like to say he is paying for me!
    That’s an interesting calculator on the link you gave.


    Apr 16, 2009
  4. Not a surprise but nice to see it quantified.

    and sales taxes (like GST) are regressive. They hit poorer people much harder as a proportion of their income. So cutting GST would be a good idea if the tax was shifted to income tax with higher rates for higher earners.

    JoVE’s last blog post..How Professors Think


    Apr 16, 2009
  5. Um, yeah, Fansen, businesses get all their GST back, it’s completely irrelevant to them how much the GST is.

    And GST is not regressive, it’s a flat tax. You have to compare it to its own tax base, not to something totally unrelated. Second, “poor” people spend more of their income on groceries and rent, which are tax free, therefore the GST is in fact not greater the less income you have.

    Anyway the whole thing is bound to be a zero-sum game, the total amount of tax paid in has to be approximately equal to the total amount spent on providing services, so for every tax change there has to be an equal amount of gains and losses for taxpayers, except with deficit spending in which case the net result is a gain for the taxpayers.

    To answer your question, Nancy, I paid $49 in income tax last year and probably about $400 in GST and $100 in fuel taxes, versus I have to see a doctor four times a year to renew my prescription, so just right there, I’m pretty sure I’m getting more services than I pay for.


    Apr 18, 2009

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