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Essential goods shouldn’t be taxed

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From the Canadian Taxpayers Federation

By Jay Goldberg 

The Trudeau government’s two-month GST holiday on certain items has been called many things.

Former finance minister Chrystia Freeland resignation letter suggests she thinks it’s a “gimmick.”

Conservative Leader Pierre Poilievre has called it a “tax trick.”

But here’s a more fundamental question: If the government thinks Canadians needs a sales tax holiday on certain items, why are those basics taxed in the first place?

Items like car seats, diapers, and pre-prepared foods are all taxed by the feds. They’re all also subject to the federal government’s sales tax holiday, which Prime Minister Justin Trudeau says was triggered because Canadians are having a hard time making ends meet.

“Our government can’t set prices, but we can give Canadians, and especially working Canadians, more money back in their pocket,” said Trudeau at his GST holiday announcement.

At least Trudeau seems to know it’s bad for governments to set prices. But the government does raise prices by adding sales tax on top of goods Canadians have to buy.

And you don’t need to be a parent to know that car seats and diapers are among the most essential goods on a parent’s shopping list.

Take a car seat. A mid-tier car seat costs around $250. The federal sales tax, which is currently at five per cent, adds $12.50 to the final cost of that car seat.

Parents across the country are no doubt asking why things like car seats and diapers were taxed by the feds in November, will be taxed again by the feds in March, but aren’t being taxed right now.

What justification can the government possibly give to parents on Feb. 16, 2025 – the day this sales tax holiday ends – for once again taxing things like car seats and diapers?

The same goes for pre-prepared meals. Many Canadians buy pre-prepared food at grocery stores to bring to work for lunch or to eat on the go. Why are the ingredients for that pre-prepared meal not taxed but the final meal is? And why take the tax off a grocery store deli sandwich now but not a few months from now?

There’s even more of an argument to be made on this front because many provinces don’t tax a lot of the items that are part of the feds’ sales tax holiday.

Take Ontario as an example.

Canada’s most populous province doesn’t tax things like books, children’s clothing, car seats, and diapers. Some pre-prepared foods aren’t taxed either.

If provinces don’t tax these items, why do the feds?

The Trudeau government took inspiration from the NDP when it comes to the GST break. It ought to also take inspiration from the party’s call to make relief permanent.

Trudeau’s GST announcement came just days after NDP Leader Jagmeet Singh called for the permanent removal of the federal sales tax on items like pre-prepared meals, diapers, and car seats. Singh’s proposal actually went much further, and included ending the GST on home heating, as well as internet and phone bills.

In touting his proposal, Singh argued that “those taxes never should have been there in the first place.”

Singh is right. Essential goods shouldn’t be subject to the GST. Period.

Just days after Singh’s announcement, Trudeau played copycat with one of his own.

But a two-month reprieve pales in comparison to permanent relief.

If the Trudeau government wants to deliver real relief to struggling Canadian families, essential items that most provinces already don’t tax, such as diapers, car seats, and pre-prepared meals, should be permanently exempt from the GST.

Permanent sales tax relief is more than doable. The feds could deliver on it without hiking the deficit by taking a sledgehammer to the more than $40 billion a year they hand out in corporate welfare.

Anything less than a permanent sales tax break simply won’t cut it when it comes to cutting costs for Canadians.

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Report: $128 million in federal grants spent on gender ideology

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More than $128 million of federal taxpayer money was spent on at least 341 grants to fund gender ideology initiatives under the Biden administration, according to an analysis of federal data by the American Principles Project.

In, “Funding Insanity: Federal Spending on Gender Ideology under Biden-Harris,” APP says it “found how the federal government has been spending hundreds of millions of YOUR MONEY on the Gender Industrial Complex!”

APP says it identified the grants by searching the USA Spending database. The data, which is available for free, is categorized by federal agency; notable grants are highlighted.

The U.S. Health and Human Services Department awarded the greatest amount of funding totaling nearly $84 million through 60 grants.

The Department of State awarded the greatest number of grants, 209, totaling more than $14 million, according to the data.

Other agencies awarding taxpayer-funded gender ideology grants include:

  • U.S. Agency for International Development, nearly $18 million through 8 grants;
  • National Endowment for the Humanities, more than $2.6 million through 20 grants;
  • Department of Justice, $1.9 million through three grants;
  • Institute of Museum and Library Services, $1.87 million through 13 grants;
  • Department of Education, $1.67 million through two grants;
  • Department of Agriculture, $1.6 million through five grants;
  • Department of the Interior, more than 1,000,000 awarded through two grants;
  • U.S. Department of Housing and Urban Development, more than $548,000 through 4 grants;
  • Inter-American Foundation, more than $490,000 through two grants;
  • National Endowment for the Arts, $262,000 through 13 grants.

APP also identified 63 federal agency contracts totaling more than $46 million that promote gender ideology. They include total obligated amounts and the number of contracts per agency.

The majority, $31 million, was awarded through USAID. The next greatest amount of $4.4 million was awarded through the Department of Defense.

The Trump administration has taken several approaches to gut USAID, which has been met with litigation. The Department of Defense and other agencies are also under pressure to cut funding and reduce redundancies.

Notable grants include:

  • $3.9 million to Key Populations Consortium Uganda for promoting “the safety, agency, well-being and the livelihoods of LGBTQI+ in Uganda;”
  • $3.5 million to Outright International for “the Alliance for Global Equality and its mission to promote LGBTQI+ people in priority countries around the world;”
  • $2.4 million to the International Rescue Committee for “inclusive consideration of sexual orientation, gender identity, and sexual characteristics in humanitarian assistance;”
  • $1.9 million to the American Bar Association to “shield the LGBTQI+ population in the Western Balkans;”
  • $1.4 million for “economic empowerment of and opportunity for LGBTQI+ people in Serbia;”
  • $1.49 million to Equality for All Foundation, Jamaica to “Strengthen community support structures to upscale LGBT rights advocacy;”
  • More than $1 million to Bandhu Social Welfare Society to support gender diverse people in Bangladesh.

One of the grants identified by APP, which has since been cancelled, was $600,000 from the U.S. Department of Agriculture to Southern University Agricultural & Mechanical College in Baton Rouge, Louisiana, to study menstruation and menopause, including in biological men.

According to a description of the grant summary, funding would support research, extension, and teaching to address “growing concerns and issues surrounding menstruation, including the potential health risks posed to users of synthetic feminine hygiene products (FHP);” advancing research in the development of FHP that use natural materials and providing menstrual hygiene management; producing sustainable feminine hygiene sanitary products using natural fibers; providing a local fiber processing center for fiber growers in Louisiana, among others.

It states that menstruation begins in girls at roughly age 12 and ends with menopause at roughly age 51. “A woman will have a monthly menstrual cycle for about 40 years of her life averaging to about 450 periods over the course of her lifetime,” but adds: “It is also important to recognize that transgender men and people with masculine gender identities, intersex and non-binary persons may also menstruate.”

All federal funding was allocated to state agencies through the approval of Congress when it voted to pass continuing resolutions to fund the federal government and approved agency budgets.

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We’re paying the bills, why shouldn’t we have a say?

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  By David Clinton

Shaping Government Spending Choices to Reflect Taxpayer Preferences

Technically, the word “democracy” means “rule of the people”. But we all know that the ability to throw the bums out every few years is a poor substitute for “rule”. And as I’ve already demonstrated, the last set of bums you sent to Ottawa are 19 times more likely than not to simply vote along party lines. So who they are as individuals barely even matters.

This story isn’t new, and it hasn’t even got a decent villain. But it is about a universal weakness inherent in all modern, nation-scale democracies. After all, complex societies governed by hundreds of thousands of public servants who are responsible for spending trillions of dollars can’t realistically account for millions of individual voices. How could you even meaningfully process so many opinions?

Hang on. It’s 2025. These days, meaningfully processing lots of data is what we do. And the challenge of reliably collecting and administrating those opinions is trivial. I’m not suggesting we descend into some hellish form of governance by opinion poll. But I do wonder why we haven’t tried something that’s far more focused, measured, and verifiable: directed revenue spending.

Self-directed income tax payments? Crazy, no? Except that we’ve been doing it in Ontario for at least 60 years. We (sometimes) get to choose which of five school boards – English public, French public, English separate (Catholic), French separate (Catholic), or Protestant separate (Penetanguishene only) – will receive the education portion of our property tax.

Here’s how it could work. A set amount – perhaps 20 percent of the total federal tax you owe – would be considered discretionary. The T1 tax form could include the names of, say, ten spending programs next to numeric boxes. You would enter the percentage of the total discretionary portion of your income tax that you’d like directed to each program with the total of all ten boxes adding up to 100.

The specific programs made available might change from one year to the next. Some might appear only once every few years. That way, the departments responsible for executing the programs wouldn’t have to deal with unpredictable funding. But what’s more important, governments would have ongoing insights into what their constituents actually wanted them to be doing. If they disagreed, a government could up their game and do a better job explaining their preferences. Or it could just give up and follow the will of their taxpayers.

Since there would only be a limited number of pre-set options available, you wouldn’t have to worry about crackpot suggestions (“Nuke Amurika!”) or even reasoned and well-meaning protest campaigns (“Nuke Ottawa!”) taking over. And since everyone who files a tax form has to participate, you won’t have to worry about a small number of squeaky wheels dominating the public discourse.

Why would any governing party go along with such a plan? Well, they almost certainly won’t if that’s any comfort. Nevertheless, in theory at least, they could gain significant political legitimacy were their program preferences to receive overwhelming public support. And if politicians and civil servants truly believed they toil in the service of the people of Canada, they should be curious about what the people of Canada actually want.

What could go wrong?

Well the complexity involved with adding a new layer of constraints to spending planning can’t be lightly dismissed. And there’s always the risk that activists could learn to game the system by shaping mass movements through manipulative online messaging. The fact that wealthy taxpayers will have a disproportionate impact on spending also shouldn’t be ignored. Although, having said that, I’m not convinced that the voices of high-end taxpayers are less valuable than those of the paid lobbyists and PMO influencers who currently get all the attention.

Those are serious considerations. I’m decidedly less concerned about some other possible objections:

  • The risk that taxpayers might demonstrate a preference for short term fixes or glamour projects over important long term wonkish needs (like debt servicing) rings hollow. Couldn’t those words just as easily describe the way many government departments already behave?
  • Couldn’t taxpayer choices be influenced by dangerous misinformation campaigns? Allowing for the fact the words “misinformation campaign” make me nervous, that’s certainly possible. But I’m aware of no research demonstrating that, as a class, politicians and civil servants are somehow less susceptible to such influences.
  • Won’t such a program allow governments to deflect responsibility for their actions? Hah! I spit in your face in rueful disdain! When was the last time any government official actually took responsibility (or even lost a job) over stupid decisions?
  • Won’t restricting access to a large segment of funds make it harder to respond to time-sensitive emergencies? There are already plenty of political and policy-based constraints on emergency spending choices. There’s no reason this program couldn’t be structured intelligently enough to prevent appropriate responses to a genuine emergency.

This idea has no more chance of being applied as some of the crazy zero-tax ideas from my previous post. But things certainly aren’t perfect right now, and throwing some fresh ideas into the mix can’t hurt.

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