UTTRI associated faculty Dr. Enid Slack, Director of the Institute on Municipal Finance and Governance, points to longstanding fiscal issues in “What Canada’s economic recovery might look like,” macleans.ca, December 10, 2020.
The article discusses the pandemic’s impact on Canada’s growing government budget deficits, and ways that governments can raise revenues to pay down those deficits for future economic prosperity.
“In the longer term . . . we have to consider who does what and how we pay for it,” says Slack. A major problem she highlights is that the federal government has the most ability to raise revenue, but provinces and municipalities have the most spending responsibilities. “If we’re delivering . . . social services and social housing, is the property tax the best way to pay for that? Most people would say no,” Slack insists. “They would say, if you’re redistributing income, the income tax is a better way to do that.” To solve this problem, Slack posits two alternatives: maintaining these services at the municipal level and giving municipalities access to income tax revenues, or moving those services up to the provincial level where there are income taxes.
The pandemic has shown just how fragile the Canadian economy is to major shocks—and the cascading impacts on our governments’ revenues. “There are cracks in our fiscal system in Canada,” says Slack.
Read “What Canada’s economic recovery might look like,” macleans.ca, December 10, 2020.