• 2004 Tax Freedom Day Occurs on Voting Day
• Growing Surplus Represents Ottawa's Over-taxation
• Whatever Happened to the Liberals' so-called "Balanced Approach" to Modest Tax Relief and New Spending

Ottawa: The Canadian Taxpayers Federation (CTF) today responded to news from the Fraser Institute that Tax Freedom Day for Canada will occur on June 28th.

Each year, the Fraser Institute calculates Tax Freedom Day as the day of the year when taxpayers finally start working for themselves after paying the total tax bill imposed on them by governments. Prior to the Tax Freedom Day, the equivalent of all money earned by taxpayers is required to pay the numerous taxes, fees and levies imposed by federal, provincial and municipal governments. The original release and calculations is available at: www.fraserinstitute.ca

An additional comparison made by the CTF (using archived Fraser Institute data) reveals that Canada's Tax Freedom Day occurs 18 days later in 2004 than it did in 1993 when it fell on June 10th. This timeline coincides with the period in which the Liberals have governed Canada.

"Under the Liberals, Canadians are working 18 days longer this year than they did back in 1993 simply to pay the taxman." stated CTF federal director John Williamson. "Canadians are routinely lectured by tax-and-spend politicians that they must pay more in taxes for better government services. Well the data shows they are, but what exactly has it gotten them "

Mr. Williamson went on to note, "Since 1993, the fortune of taxpayers has steadily worsened as they pay more in taxes. But are Canadians today receiving better health care Do they drive on better roads Do they receive better overall government services The answer is no, no, and no, yet the tax burden has increased rapidly under the Liberals."

Tax Freedom Day reached its high in 2000 when it occurred on July 2nd, but the latest data indicates that after a seven-day decline from 2000 to 2001, Tax Freedom Day is arriving later every year. This is largely because approximately 75 per cent of the personal income tax cuts the federal government passed in 2000 were either eliminated by rising Canadian Pension Plan premiums or by imposing new fees, such as Ottawa's airport security tax.

In 2001, Tax Freedom Day fell on June 25th. In 2002 it fell on June 26th, in 2003 on June 27th, and this year it will arrive on June 28th. By contrast, taxpayers in the United Kingdom - ruled by a Labour government since 1997 - stopped toiling for the taxman on May 30th, and American workers celebrated Tax Freedom Day on April 11th. Canada, however, is headed in the opposite direction and is currently on track to again hit its 2000 peak in the years ahead.

"The Canadian trend demonstrates the government is either unwilling or unable to control costs, cut waste, and prioritize spending," noted Williamson.

Growing Surpluses: An Opportunity to Reduce Taxes Now!

Since the budget was balanced in 1998, the federal government has recorded healthy annual budget surpluses. Ottawa now collects more in taxes than it budgets to spend each year. These multi-billion dollar surpluses represent over-taxation by Ottawa.

"The federal government has a well-known history of low-balling surpluses and the annual surpluses are an unnecessary tax grab on Canadians," said Williamson. "Between fiscal 1999/2000 and fiscal 2002/03, Ottawa's official estimates pegged the surplus at $10.5-billion. The actual figure came in at en eye-popping $46.7-billion. Given that Ottawa continues to over-tax Canadians, these surpluses will continue to grow unless taxes are reduced."

Estimated gross surplus projections from the recent federal budget are $5.5-billion last year (fiscal 2003/04), $4.2-billion this fiscal year (2004/05), and $6.6-billion next year (2005/06). The total - based on Ottawa's conservative (read lowball) projections - is $16.3-billion.

"The surplus represents Ottawa's level of over-taxation," said Williamson. "There is no reason why Ottawa should be collecting more money than what is absolutely necessary to meet legitimate government expenditures. This is another lost opportunity for Paul Martin to reverse Canada's growing tax bite and restore some balance by giving taxpayers a well deserved break."


Whatever Happened to the Liberals' so-called "Balanced Approach"

"It is worth highlighting in this election that Paul Martin has abandoned the legacy of the Liberal Party under his predecessor Jean Chrétien," noted Williamson. "Voters will recall that Mr. Chrétien followed what he dubbed a 'balanced approach,' whereby the government raised spending, modestly cut some taxes, and paid down debt. Today, Mr. Martin is promising more spending, some debt repayment but no tax relief and it is the Conservative Party, under Stephen Harper, that is pursuing Chrétien's so-called 'balanced approach' to governing."

Williamson concluded, "It is more than a little ironic that Tax Freedom Day will fall on Election Day. Canadians will begin working for themselves, rather than the government, as they step into polling booths to vote."