What do tax cuts, economic growth and Tim Hortons have in common?

 

Tax cuts, and the income gains emerging from a decade of red-hot economic growth, have turned out to be the “double-double” – the sugar and cream – of Canada’s fast-food policy culture.

 

It also turns out that the richest among us are getting more than their fair share of double-doubles lately.

 

Study after study shows the richest 10 percent of Canadians have taken home the lion’s share of income gains from a remarkable period of economic growth. And, just to make it a party, the richest 10 percent are also the greatest beneficiaries of Canada’s decade-long commitment to tax cuts, particularly those in the top 1 percent.

 

Meanwhile, the rest of us wait – and hope – for the signs of prosperity to trickle into our lives.

 

We’ll be waiting a long time if the current keepers of the public purse stay in place.

 

Within the first 21 months in office, the Harper government scheduled $190 billion in tax cuts and provided $37 billion in debt reduction.

 

Tax cuts of such hallucinogenic proportions are hard to defend, even in the best of times, but here is Finance Minister Jim Flaherty’s clear-minded rationale for the spree:

 

"Given the uncertainty in the global economy, now is the time to provide additional tax relief for Canadians," said Minister Flaherty.

 

It’s not enough that a minority government, lacking the power of a majority, unilaterally decides on the best use of huge surpluses, and gets away with it. What’s worse is that it behaves as though there isn’t a problem in the world.

 

No problem with poverty, no problem with rising inequality, no infrastructure deficits, no labour shortages, no challenges from climate change? Is our government on the same planet as the rest of us?

 

Whatever planet they are on, taxes are a burden, and tax “relief” is the best thing governments can do. It’s time to stop playing so close to the sun. It’s time to get serious. Tax cuts are the laziest thing governments can do. Like fast food, they are expensive for what they provide and of no lasting value.

 

Canadians deserve more from these prosperous times –¬ more imagination, more investment in future generations, more attention to the problems nipping at our heels.

 

The tough questions have no fast answers, and can’t be addressed by us as individuals. We have to do this together. And for that we need our governments. So what are they suggesting we do?

 

For years Canadians have been urged to work smarter and harder, repeatedly reminded that a strong and growing economy is the fastest route to prosperity for all. Government policies are aligned to foster and support the most rapid economic growth, as if that will fix everything. A rash of recent studies puts the lie to that promise. Upward mobility is no longer a question of simply combining skills, ingenuity and hard work. The stats reveal a more sobering reality, one that says only the rich are getting richer.

 

The share of incomes going to the top 1% has soared rising from 8.5% in 1982 to 12.2% in 2004 (a 43% increase in their piece of the pie). The higher up the income spectrum you go, the better the story gets.

 

What about the rest of us?

 

About 80% of Canadians have seen no improvement in their incomes since 1982.

That¹s astounding, because 1982 was during the worst recession since the Great Depression.

 

Since the mid-1990s, Canada’s economy has been firing on all cylinders. All the markers of economic success low inflation, low unemployment, low interest rates, strong currency, no deficit budgets are better than they’ve been for over 30 years.

 

On the global stage, Canada’s economic performance over the past decade has been the envy of the richest industrialized nations (the G7), and the only nation with a decade of budgets awash in surplus cash. This is as good as it gets.

 

All these factors should lead to the majority of Canadians doing better than ever. Instead, a surging economy has coincided with a process of redistributing incomes from the less affluent to the most affluent, through changes in the labour market and through changes in the tax system.

 

This is disconcerting, given that Canadians are playing by all the rules.

 

This generation of workers is better educated than the labour market of the early-1980s. People are working more, too. The average family raising children is clocking in 200 hours more a year than a decade ago.

 

Still, the vast majority of Canadians are just pedaling faster to stay put.

 

Few would begrudge the rich. Most of us want to “get ahead”. But something significant is shifting in Canada. A generation ago, the gains from economic growth were more widespread.

 

Not only did more Canadians find their paycheques improved in good economic times, our governments made sure we all benefited from prosperity by investing in things that help us get on with our day: decent housing options, quality child care, good schools and public spaces, affordable university tuition, timely access to high quality health care, and good public transit.

 

Today, the majority of Canadians are losing on all counts.

 

Let’s face facts. Rising inequality and slow-as-molasses reductions in poverty are not merely a product of our economy — they are a product of our culture. They reflect what is socially sanctioned, and what is considered worrisome for our future.

 

Do these arguments sound familiar? The rich should get more because they work hard, they take risks, they have something we do not. The middle – particularly those represented by unions – shouldn’t ask for too much because that is inflationary. And if we raise the minimum wage it will kill jobs.

 

As in all relationships, we get what we expect. It’s time to demand better.

 

There is a glimmer of hope on the horizon. The governments of Newfoundland, Nova Scotia, Quebec and Ontario are responding to public pressure by developing comprehensive poverty reduction strategies, with clear targets and timetables. It’s up to us to make poverty reduction strategies spread like a prairie wildfire across the rest of Canada too.

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