Fair Taxation is a key Issue

December 19, 2014

With so much talk lately about leadership conventions and spring elections, there is a palatable buzz in the air concerning what direction our province should be moving in. One of the key issues facing our leaders is how to maintain services that Islanders need and depend on, while simultaneously paying down debt and ensuring sound fiscal management practices.

Some believe the answer lies in smaller government and a reduced civil service. However, if you advocate this point of view you also are recommending a reduction in quality public services, and fewer well paying jobs for Islanders. We have seen this experiment conducted at the federal level for the past nine years. Jobs have been lost, many of us have been forced to move away or work out of province, our social safety net has been compromised, and we have lost public services that all Canadians cherish. Austerity is not the answer, in fact, with PEI’s economy performing the third best in the country right now in terms of job growth, we are in a position to create more meaningful employment. 

One of the key issues that deserves our collective attention is taxation. After all, taxation is the main source of the government’s revenue. We should neither shy away from this issue, nor fail to examine it, simply because of any negative connotations that are associated with the word.  It’s true that many of us complain about taxes, however, we ultimately understand the importance and the need for a fair taxation system in this province and country.

I think there is agreement around the idea that Islanders want and expect quality health care, education and social services that ensure all of us have an equal shot at living a good life. No one really wants to see these services removed or reduced. In fact, most of us want to see these services improved upon and made readily available to ourselves and our families.  However, and this is the tough part, we need to properly fund these services if we expect to use and benefit from them. 

In light of our expectations, we might then question why tax cuts for corporations and the wealthy have been a staple of politics for some time now. We have seen taxes reduced for high income earners by one quarter and large corporations have had their taxes cut in half. Further, we have seen unprecedented levels of tax avoidance in this country as the wealthy continue to park their money offshore. In 2011 approximately $130 billion was moved to countries identified as tax havens. This money was not subject to taxation. These factors combined have deprived governments, at both the provincial and federal levels, of billions of dollars of tax revenue which was needed to sustain our public services. And now, as a society, we are all wondering how to pay the bills and maintain what we have. I think tax fairness is part of the answer.  
I am suggesting the need for increased fairness regarding our taxation system in Prince Edward Island and Canada. Public services are not being adequately funded. Governments are now faced with a serious revenue problem, even more so than an expenditure problem. Granted, improvements can be made on all fronts and should be made. However, the point remains, if we want and expect quality public services we have to be willing to collectively fund them though our taxes. Taxation should not be treated like a dirty word. It’s a key part of the puzzle for creating a sustainable, healthy and prosperous future for us all. In the next few months we expect to hear much debate about the strategic direction the Island is heading in, and I hope the issue of tax fairness will not be overlooked.    
Debbie Bovyer
President, UPSE