$8.7B tax gap short-changes health care and other public services

“The vast majority of Canadians would be much better off if the government had been able to collect that $8.7 billion.” — Larry Brown, NUPGE President

Ottawa (12 June 2017) — A Canada Revenue Agency report released last week found that the federal government failed to collect $8.7 billion in tax revenue in 2014. This meant $8.7 billion less for services Canadians rely on, like health care or post-secondary education.

“The vast majority of Canadians would be much better off, if the government had been able to collect that $8.7 billion,” said Larry Brown, President of the National Union of Public and General Employees (NUPGE). “$8.7 billion is enough to ensure federal health care funding keeps pace with costs, start a national pharmacare program, and create more long-term and residential care spaces for seniors.”

Public services make life more affordable for Canadians

The value of the public services that the overwhelming majority of Canadians use is far more than what they pay in taxes. According to the Canadian Centre for Policy Alternatives, for a typical Canadian family, the public services they use are the equivalent of 63 per cent of their total income. And the Broadbent Institute reports that is more than 2½ times what a typical family pays in taxes.

Cost of private health care in the U.S. shows Canadian public services' advantage

A comparison of health care costs in the United States and Canada shows why Canadian public services are advantageous. When we compare the U.S. and Canadian healthcare systems, we usually focus on the number of Americans with no health insurance. But the US system is also much more expensive.

The profits of the many insurance companies and other for-profit companies involved in the U.S. health care system drive up the costs. So even though millions of Americans have no health insurance, the per capita amount Americans spend on health care is more than double what Canadians spend.

Governments need to ensure everyone pays their share

When some people aren’t paying their share in taxes, it is more than just unfair. The money that governments aren’t collecting means that the public services we rely on are being shortchanged.

Our children don’t do as well as they should in school because classes are too large. People have to wait for medical care. We spend too much time stuck in traffic or waiting for buses because our transportation infrastructure hasn’t kept pace with growth.

For those reasons, the tax gap report should be a call to action for the federal government.

“The CRA’s tax gap report lets us know how big a problem we have. But if we want the public services we rely on to be adequately funded, the federal government needs to be working to reduce the gap,” said Brown.

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The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 370,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. ~ NUPGE