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Government Subsidies Hurt Taxpayers

Tue, February 21, 2023   |   Author: Rod Taylor   |   Volume 30    Issue 8 | Share: Gab | Facebook | Twitter   

Former US President Ronald Reagan once said: “The nine most terrifying words in the English language are: “I’m from the Government, and I’m here to help.

In this time of soaring inflation and great market uncertainty, most Canadians are looking for economic stability. Although many employers are complaining loudly about the shortage of skilled and reliable labour, there are still workers who are temporarily unemployed; the rising cost of everything from gas to groceries to insurance is scaring the daylights out of them. In times like these, it’s tempting to want the government to step in and subsidize the cost of living. Be careful what you wish for.

Already, for many years, the Canadian public has accepted taxpayer-subsidized education and taxpayer-subsidized healthcare. The quality of both is now declining. As government has expanded in times of economic prosperity, public expectation of the government’s responsibility to meet our needs and wants has grown. The government now subsidizes large and small businesses, needles for drug injection sites, the cost of raising a family (family child allowance), paved bike trails, childcare for pre-schoolers so both parents can work, gay pride celebrations, gender “re-assignment” surgery, abortions for those who choose to kill their pre-born and suicide for those who are seen by government bean-counters as an economic burden.

Depending on how one looks at government expenditures, taxpayers are paying for everything the government does at all levels, federal, provincial and municipal. There is only one taxpayer; when a local municipality applies to the federal or provincial government for a grant—however noble the purpose—the grant writer is asking taxpayers who live in another municipality to cover the cost of a local project. Indeed, some mayors, some MLAs, and some MPs think their primary obligation to constituents is to secure federal or provincial taxpayer funds for projects within their districts. Since almost every other officeholder is doing the same thing, the demand for grants and subsidies continues to grow. Municipalities that could not afford a hockey arena or a swimming pool or an electric car charging station can nevertheless justify the expenditure to local taxpayers, because it was made possible by a grant from “the government” (ie. other taxpayers).

Wasteful government spending is nothing new. Our selfish human nature is quite happy to spend lavishly on luxury items, if they’re being paid for by other people’s money. Former British Prime Minister Margaret Thatcher famously said, “The problem with socialism is that eventually you run out of other people’s money.” Those who view government coffers as a limitless source of cash (and this includes many of our MPs, MLAs and Cabinet Ministers) are quick to spend funds they don’t have or can’t raise through taxes, expecting future taxpayers to pick up the tab.

What happens when the government pays the bill for the goods and services consumed by individuals, businesses, or advocacy groups? The answer is easy to predict, based on human nature; a couple of examples will suffice:

  • In British Columbia, vehicle registrations and insurance are all handled by the Insurance Corporation of British Columbia (ICBC), a provincial Crown corporation. When we moved to BC from Alberta in 1987, our vehicle insurance immediately doubled, as there was no private competition for our car insurance. BC’s current socialist NDP government maintains this monopoly, and BC residents have basically accepted it. Of course, that includes windshield claims. In 2017, ICBC began covering the cost of repairing minor rock chips. There is some logic to this; by repairing a chip before it spreads, drivers (and ICBC) can extend the life of a windshield. However, the cost of a repair is now covered by the collective rather than the individual. In 2017, the last rock chip repair I paid for myself cost me $22.40. The day ICBC began paying for the repairs, the price jumped to $70.00. I recently had a rock chip repair done at an ICBC-authorized service centre. I didn’t pay for it directly, but ICBC paid $84.00 for the repair. And I pay ICBC for my insurance. When costs are subsidized, the price goes up.
  • What about company dental insurance plans? It costs a dentist more to process and collect payments being made by a company insurance plan, and it takes longer to receive payment than if the customer were simply paying out of pocket. Paying an employee to fill out the paperwork for an insurance claim costs money, and the dentist has to recoup that additional expenditure. This is only an example; it would apply just as easily to an auto body repairman processing an insurance claim. It’s easy to charge a customer the full price if someone else is paying. And the full price tends to go up.

Right now, the socialist federal NDP is pushing for state-subsidized dental care to go along with our national medical plan. Of course, that will be a big relief for families with unaffordable dental bills; but it also guarantees that the cost of all dental care will increase. Our national socialized healthcare system—once the envy of many countries—is failing. There are many reasons for this, but the long wait times, the shortage of doctors and the closed or barely-functioning emergency rooms do not speak well for a socialized monopoly on healthcare.

All this is to say that we ought to be very wary of government programs that purport to make life more affordable while adding layers of government bureaucrats (“middlemen”) to the provision of a good or service. Those bureaucrats—and the politicians who create the bureaucracy—don’t come cheap. In general, government employees receive higher salaries and benefits than their counterparts in the private sector. Often, their role is to supervise, inspect, regulate and document the “real work” being done by the providers of a good or service. Government-run enterprises are historically less efficient than those in the private sector, and the layers of reports and approvals do not lead to quick results.

CHP Canada is committed to smaller, less costly and more accountable government. Federally and provincially, government should “stay in its lane” and interfere as little as possible in business, trade, medicine, education and church and family life. That means resisting the temptation—as citizens, consumers and voters—to try to get government to pay for or do the things we ought to pay for and do ourselves. A government big enough to give you everything you want is big enough to take everything you have.

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