As Canadians stay home to keep their communities safe in the midst of the coronavirus crisis, millions of people are out of work and countless businesses have closed their doors.
It’s an unprecedented situation. Never before have governments deliberately put their economies into a coma in order to fight a health pandemic. And with the economy at a near-standstill, governments are looking at every option to help tide people and businesses over until we can get back to something resembling normal.
While people stay home to prevent the spread of the virus, they still have bills to pay for, such as rent, mortgages, car payments and groceries. And with so many people suddenly out of work – last week alone, nearly one million Canadians applied for employment insurance – the government is now scrambling to find ways to ensure people can pay their bills.
The federal government has already pushed more than $100 billion out the door – through a mix of temporary emergency benefits for individuals, private sector salary subsidies, and loan programs. But there are real worries that this won’t deliver enough help to enough people fast enough.
Which is why governments should look at one of the easiest and quickest ways to help Canadians: take less money out of our pockets.
Simply put, every government in this country should be looking at ways to freeze, reduce, defer or suspend taxes.
True, reducing the tax burden alone won’t be enough. But as part of a broader suite of policies, tax policy can be a powerful and efficient tool.
Deferring taxes gives families and businesses breathing room – which is why it’s great news that the federal government has already deferred the tax filing deadline by a month, and moved the payment deadline for taxes owing to September.
Freezing taxes also makes perfect sense, as the British Columbia government has recognized by putting off the implementation of a new Netflix tax and freezing its provincial carbon tax. Alberta has frozen a planned increase in its education property tax, while Ontario is deferring $6 billion worth of business taxes.
Here’s the bottom line: for as long as this crisis lasts, Canadians shouldn’t be forced to endure any tax hikes, period.
That includes the federal carbon tax, which is scheduled to rise by 50 per cent on April 1, from $20 per tonne to $30 per tonne.
Making everything more expensive in the middle of a pandemic is a terrible idea. Nor does it matter that the revenue is rebated through the tax system. Right now, the most important factor for any policy is speed, and it makes no sense to tax people and then turn around and send some of it back months later.
Tax relief is instantaneous. Money is simply left in the hands of those who need it. There’s no application to be processed by an overstretched government bureaucracy. By doing nothing, governments could instantly advance their immediate objective of making sure Canadians have more money in their pockets.
Canadians are a resilient bunch, and we’ll get through this crisis together while we’re social-distancing to keep each other safe. In the meantime, our governments can help ease the burden by making sure they leave a little more money in our pockets.
