Support for new federal programs collapses when Canadians have to pay for them

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Appeared in the Winnipeg Free Press, May 29, 2022
Support for new federal programs collapses when Canadians have to pay for them

There are numerous polls showing Canadians overwhelmingly support a national prescription drug plan (i.e. pharmacare), a national dental program, and a standardized national daycare program (i.e. $10-a-day daycare). The problem is that most of these polls fail to connect new federal programs with the taxes needed to pay for them.

A recent Leger poll (commissioned by the Fraser Institute), which included 1,509 Canadians across the country spanning all age groups and income levels, found significant support for the new public programs. For example, 69 per cent of respondents supported $10-a-day national daycare, 79 per cent supported a national universal prescription drug plan (pharmacare) and 72 per cent supported a national dental plan for lower-income Canadians. The recent federal budget included or committed to all three of these programs.

These are not small spending commitments. The national daycare program alone will cost an estimated $7.9 billion annually by 2025/26. The national dental benefit is estimated to cost $1.7 billion annually—excluding the cost if some Canadians currently on private plans transition to the new government plan, which means the costs could be higher. And while there was no cost estimate for the new national pharmacare program, the budget committed to passing legislation by the end of 2023. (The Hoskins Report estimated the annual cost of national pharmacare, once fully implemented, could reach $15.3 billion.)

These represent significant new expenditures by Ottawa at a time when spending exceeds revenues, meaning that the federal government continues to borrow money to finance spending. Put simply, these new programs are being presented to Canadians as if they’re costless.

When Canadians are asked to pay for these programs, the support for them collapses. The same Leger survey asked a second set of questions, but this time linked an increase in the GST to pay (roughly) for each program. The GST was selected over other possible tax increases because it’s the tax most widely understood tax and paid directly by most Canadians.

The results are startling.

Support for a national daycare program drops from 69 per cent (when no tax changes are linked to it) to just 36 per cent when the new program comes with a one-percentage point increase in the GST.

Support for a national prescription drug plan drops from 79 per cent to 40 per cent when a two-percentage point increase in the GST (from 5 per cent to 7 per cent) is linked with the new program.

And support for a national dental plan drops from 72 per cent to 42 per cent when connected with an increase in the GST. Simply put, none of these three major new federal programs garner majority support when the costs of the programs—that is, the necessary tax increases—are included.

These results are in line with a previous 2020 poll by the Angus Reid Institute that found overwhelming support for a national prescription drug program with 86 per cent of respondents indicating support. However, when asked if they support the same program if it meant a one-percentage point increase in the middle-class personal income tax rate (which wouldn’t come close to actually funding the program), support dropped to 47 per cent.

It’s clear from these results that Canadians support new and expanded programs by Ottawa only if there’s no transparent cost to them. When there’s a clear cost in the form of higher taxes, support for new and expanded programs plummets to the point where more Canadians oppose the programs than support them. And the reality of any new or expanded program is that at some point Canadians must pay either with higher taxes and/or less spending on other programs. What we should all agree on is that the costs of any new programs should be transparent so Canadians can make informed decisions.

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