Imperial Oil pays less tax today than it did in 1960. Bus drivers pay more. In this statistic we see the case for Inequality and the Fading of Redistributive Politics.
Editors and contributors from leading universities document the phenomenon with scientific precision. Canada’s rich are definitely richer, the poor are not really much poorer, but recent years have put the middle class in a vise-like squeeze. In response Parliament passed a bill offering tax credits for hot tubs. “This new political landscape has sharp edges,” write editors Prof. Keith Banting of Queen’s University, and Prof. John Myles of the University of Toronto.
Inequality is neither hectoring nor conspiracy-ridden. “There is no smoking gun to be found,” the editors note. However the result is the same: “Canadians in the middle, especially those in the lower middle of the wage distribution, have been struggling in the wake of economic change and have not received their fair share of the benefits of economic growth for a generation.”
No federal cabinet in twenty years has done much to alter the trend lines. It has been a generation of cheese-paring “dominated by the Department of Finance and characterized by cost containment through technical, almost invisible program adjustments”, writes Prof. Susan Phillips of Carleton University’s School of Public Policy.
An example: the 1944 baby bonus introduced as the first truly universal family benefit, and now reduced to a non-refundable tax credit. The mangling of the bonus reads like a round of the telephone game: first they renamed it the “family allowance”, then clawed it back in 1989. It was renamed again as the Child Tax Benefit in 1993, then replaced with a Child Tax Benefit in 1998 that actually cut benefits for low-income families. This was followed by a Universal Child Care Benefit, and finally in 2007 the non-refundable Child Tax Credit.
The effect is “perverse”, writes Prof. David Good of the University of Victoria, a former assistant deputy minister: “Non-poor families receive $300 per child, including the very rich; some low-income families receive a smaller amount; and the poorest get nothing at all because they do not owe income tax.”
Inequality reflects the sunset on Canada’s postwar middle-class. It is a fact now that most people under 50 will never know a time when a high-school education could bring a good wage; or one wage-earner might support a whole family.
It was nice while it lasted.
By Holly Doan
Inequality and the Fading of Redistributive Politics, edited by Keith Banting and John Myles; UBC Press; 480 pages; ISBN 9780-7748-26006; $34.95 
