Editorial Mining, too, a victim of over-taxation

Taxation in this country is draining us dry. Indeed it’s up over 1,000% since 1961, reports the reputable Vancouver-based Fraser Institute, which carries out an ongoing assessment of the whole, broad Canadian tax system.

While this involves all three levels of government, the Ottawa administration is by far the worst culprit. Its financial position “has deteriorated dramatically” since the 1982 recession, says the Investment Dealers Association, adding that this is unprecedented during such an extended period of economic growth.

But more ominous than our rising tax burden is the soaring federal debt. For all semblances of fiscal restraint and austerity have been swept aside as Ottawa spends with abandon — over $30 billion more than it takes in year after year over and above its big tax grabs. And with an election in the wind, it’s getting worse. Either on a per capita basis or relative to our gross national product, the federal government’s over-all indebtedness far exceeds that of the United States.

Yet, surprisingly, the average Canadian seems little concerned about the big federal deficits and soaring debt. Rather, his is a “So what? I’m doing all right, Jack” attitude. Even the Fraser revelation that the average Canadian this year worked entirely for government until July 10 doesn’t particularly stir him. Nor does the fact that the Fraser tax index has risen more sharply than its index of any of the other burdens the family faces, with tax outlays now accounting for a more significant chunk of the consumer’s budget than shelter, food and clothing combined.

But this complacency won’t last, says the head of the Canadian Chamber of Commerce, for sooner or later these deficits and debts will become a pressing issue and come home to roost. It already tops the list of concerns of most business people, for this will inevitably lead to inflation and higher interest rates, eroding the competitive position of Canadian industry. And this certainly includes mining, which must export to survive.

Deficit financing, i.e. issuing high-interest-bearing bonds, has become too easy for our federal mandarins. They have apparently forsaken any economic sanity they may have possessed before moving to Ottawa, where they are effortlessly tempted to spend without regard to what can be afforded — or even reason. A case in point is the preposterous and extremely costly plan to purchase a small fleet of nuclear submarines, the real cost of which would almost certainly hit taxpayers with at least a $15-billion bill.

With the extravagant deficits and debts it has built up during these years of economic expansion, the federal government has missed its opportunity to prepare for a rainy day — its ability to act as a stabilizer during an economic downturn which, sooner or later, will come.

We commiserate for the Third World countries which have become strapped in debt they simply cannot pay. But perhaps they have a lesson to teach us if only we would listen.