Apologists for Canada's high taxes often try to defuse taxpayer complaints by claiming that our publicly funded health care system is the reason our taxes are so much higher than in the United States. But the "Medicare explanation" just doesn't hold any water.

In its recent budget, the Liberal government in Ottawa decided to ramp up federal spending on health care by $11.5 billion over the next five years while cutting taxes by $1.5 billion next year.

The public and media discussion of health care and taxes that followed often ended up with the same rationalization: "Taxes are higher in Canada than the States because our federal government pays for our public health care system." In other words, our higher tax levels are simply the price Canadians must pay for Medicare.

In many quarters, this has become public policy gospel. But is that the real reason for high taxes A quick review of the evidence says no.

First of all, such arguments ignore the fact that public health funding in the United States, as well as in Canada, is pretty much the same.

Public sector funding in Canada represents about 70% of the all the health care dollars spent in our country, as opposed to south of the border where public sector funding is about 50% of the total. Private funding picks up the rest in both countries. But that's not the whole story.

When you look at public health spending in relation to economic output (and therefore our respective tax bases) public spending accounted for 6.6% of Canada's economic output versus 6.45% in the United States - a difference of less than two-tenths of a percent.

That's not enough to account for the huge gap in the tax burden between the two countries.

No, the reason for higher taxes in Canada is the higher cost of all government programs here in our country, not to mention the cost of servicing our mountainous debt.

(In fact, according to the recent budget, the cost of servicing Canada's national debt remains the federal government largest expenditure and the total continues to climb. Last year, the government paid $40.9 billion to service its public debt, but that figure is expected to rise to $43.3 billion by 2001).

No matter how you slice it, taxes in Canada are much higher than in the United States. One of the best measures of a country's overall tax burden is to look at the percentage of tax revenue compared to a country's economic output. For instance, the total tax burden in Canada represents 43.5% of our economic output. In the United States, the tax burden is only 31.6% of their economic output - an 11.9 point difference.

But if we remove public health care spending from the respective tax loads of both countries, the remaining tax burden to support other government spending amounts to 36.9% in Canada versus 25.2% in the United States - an 11.7 point difference. The gap is virtually the same

Canadians owe our high tax levels to all the spending our government engages in. Taxes are indeed higher in Canada, but public health care is not the "reason," it's just the excuse.