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Canada’s quiet bargain: The benefits of public spending

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Mackenzie, Hugh and Shillington, Richard
Publication Date: 
15 Apr 2009

Description: Using a sophisticated array of data sets and analytical tools from Statistics Canada, this study concludes that Canadians depend to a significant extent on public services such as education, health care, child care, public pensions, employment insurance, and family benefits for their living standard. In fact, this study puts a number on it: Canadians enjoy an average $17,000 benefit from the public services which our taxes fund — about the same amount a Canadian working full-time, full-year at the minimum wage would earn. The results of this study show the vast majority of Canadians are getting a quiet bargain by investing in taxes that produce enormous public benefits. For the vast majority of Canada’s population, public services are, to put it bluntly, the best deal they are ever going to get. No matter how you cut it, the data in this study shows how powerful a role public spending plays in ensuring the majority of Canadians enjoy a better quality of life. The paper also shows that the vast majority of Canadians would have been better off if the fiscal capacity lost through tax cuts had instead been invested in improving public services. This path-breaking study raises serious questions about continuing Canada’s tax cut agenda and provides robust evidence that the taxes Canadians pay contribute substantially to their standard of living by providing them with some of the best public services in the world.