From the Fraser Institute

By Jason Clemens and Jake Fuss

72 per cent of respondents in Canada supported a new narrowly-targeted tax on wealth for the top 1 per cent to pay for new government services and/or a guaranteed annual income. But support dropped to only 16 per cent when the plan relied on increasing the GST to 20 per cent. The implications of the data are clear—Canadians support new and expanded programs when they believe someone else will pay for them.

In the wake of the 2024 federal budget, several public opinion polls have been released with potential implications for the future direction of federal policy. But unless the polls are interpreted correctly, the results could be misconstrued and lead to further damaging federal policies.

Most polls continue to show the federal Opposition significantly outperforming the governing Liberals and their partners in government, the NDP. Moreover, polls completed after the Trudeau government released the federal budget earlier this month indicate Canadians generally do not agree with the overall policy direction of the Trudeau government.

For example, according to a recent Leger poll, 56 per cent of Canadians believe the country is “headed in the wrong direction,” 59 per cent “perceive the economy as weaker,” only 19 per cent agree the government’s strategy “will benefit their personal finances,” and only 33 per cent believe the government is “taking positive steps to grow the Canadian economy.”

These results align with a recent Angus Reid poll, which found that 59 per cent of respondents think federal spending had grown too large and spending cuts were needed.

A number of pollsters, however, have noted the gulf between the overall lack of support for federal policies (including the recent budget) and strong support for individual initiatives in the budget. According to the Leger poll, for instance, 73 per cent of respondents support the new $6 billion Canada Housing Infrastructure Fund, 71 per cent support the new National School Food Program, and 67 per cent support the new $15 billion Apartment Construction Loan Program.

But these results are misleading because they only reflect one side of the question—the benefits. In other words, the polls ask respondents if they support specific programs but exclude any costs. When Canadians understand the costs, their attitudes change. They’re concerned about the level of federal spending because they see the costs—rising taxes, mounting debt and increasing interest costs.

Not surprisingly, when pollsters connect new or expanded programs with their costs, support for those programs declines. Consider a 2022 Leger poll that asked respondents about their support for pharmacare, dental care and the federal $10-a-day daycare program.

Support for the three programs is strong when no costs are attached: 79 per cent for pharmacare, 72 per cent for dental care and 69 per cent for daycare. But the level of support plummets when an increase in the GST is attached to the new program. Support for pharmacare drops to 40 per cent, support for dental care drops to 42 per cent, and daycare support drops to 36 per cent.

This general idea of supporting programs—when someone else pays for them—aligns with a 2022 poll, which found that 72 per cent of respondents in Canada supported a new narrowly-targeted tax on wealth for the top 1 per cent to pay for new government services and/or a guaranteed annual income. But support dropped to only 16 per cent when the plan relied on increasing the GST to 20 per cent. The implications of the data are clear—Canadians support new and expanded programs when they believe someone else will pay for them.

This is an important consideration because the Trudeau government has borrowed to pay for most of its new and expanded programs, meaning that the effect of the new spending would be more apparent if the government raised taxes—rather than borrowed—to pay for it. The costs of the government’s approach, however, are showing up in Ottawa’s debt interest costs, which this year will reach a projected $54.1 billion—more than the federal government spends on health-care transfers to the provinces.

As Nobel laureate Milton Friedman said, there’s no such thing as a free lunch. When polling data treat new and expanded programs as costless, they provide misleading results and policy signals to politicians. It’s essential that policymakers understand the degree to which Canadians—after they understand the costs—actually support these initiatives.