Taxation and Political Platform Notes
• Under the Constitution Act, 1867 (formerly BNA Act), Parliament has unlimited taxing
power, while the provinces are limited to direct taxation (see DISTRIBUTION OF
POWERS in the Constitutional Backgrounder).
• 1917—income tax was first introduced by Sir Robert Borden’s Conservative government
to pay for the costs of World War I. The rate was 4%.
• Before 1917—government revenues were mainly from customs and excise duties—up to
90% of revenue requirements. Corporate taxes were introduced shortly thereafter and
sales taxes in 1920.
• 1930s—Great Depression—customs and excise duties fell by 65% so both federal and
provincial governments began taxing individuals and corporations.
• World War II—the federal government, with provincial agreement, took in all taxes
centrally and paid annual sums to the provinces.
• 1962—the provinces began levying their own taxes once again.
The Canada Revenue Agency (CRA)
• administers tax laws for the federal government and for most provinces
and territories;
• administers various social and economic benefit and incentive programs
delivered through the tax system;
• promotes compliance with Canada’s tax legislation and regulations;
• plays an important role in the economic and social well-being of
Canadians by ensuring, as far as possible, that all due taxes are declared
and collected through extensive audits.
Taxation levels
The public sector has needs that must be financed. These include defense,
health care, education, social programs, customs and immigration and so
on. Taxation must pay for all of these, whether in the form of sales taxes or
taxes on income. Taxation levels are established so as to meet the costs of
public sector needs. If public sector needs are increased or decreased, such as
in changes to social programs, the taxation levels can be adjusted up or
down accordingly.
Tax and Revenue Administration (TRA), Alberta Finance and Enterprise
• administers tax laws for the Alberta government;
• has four branches: Revenue Operations, Audit, Tax Services, Business
Technology Management
• visit the Alberta Finance and Enterprise website for specific TRA
responsibilities and functions
Issues: tax evasion, tax avoidance and tax havens
• 2002—Canada’s auditor general reported that “tax arrangements for
foreign affiliates (through offshore tax havens) have eroded Canadian tax
revenues of hundreds of millions of dollars over the past 10 years.”
• Other studies indicate that some self-employed under-report their income.
Note: Under Canadian law, tax avoidance is distinct from tax evasion.
Tax avoidance can involve actions that are within the letter of the law, but
which contravene the object and spirit of the law. It was to address these
latter situations that the general anti-avoidance rule was enacted in 1988.
Tax evasion typically involves deliberately ignoring a specific part of the law
a specific part of the law and can have criminal consequences.
HOW DO DIFFERENT POLITICAL PARTIES VIEW SOCIALPROGRAMS?
POLITICAL PARTIES AND PLATFORMS IN CANADA
The Canada Elections Act defines a political party as “an organization one of
whose fundamental purposes is to participate in public affairs by endorsing
one or more of its members as candidates and supporting their election to
the House of Commons.”
• Political parties develop platforms to attract voters and get their
candidates elected. Their platforms will include positions on issues such
as the following:
– economics;
– foreign policy;
– the environment;
– social programs;
– defence;
– education.
• Political party websites in both Canada and the United States spell out
the platforms of each party. These platforms identify the position of
parties on the issues that most concern the electorate. These platforms do
four things:
1. They identify which issues are of the greatest concern to that party.
2. They explain what actions that party intends to take to resolve
the issues.
3. They tell the voter whether this is a party that wants the government
to more fully intervene with the issue, or not.
4. They help the voter decide whether this is a party with whose
ideology he or she agrees and would want to vote for.
Key Issues: poor voter participation