food for thought gst

Two Canadian economists made headlines a few days back when they proclaimed it's time for Ottawa to start taxing the food we eat. They want Prime Minister Stephen Harper to slap the GST on food.

Two Canadian economists made headlines a few days back when they proclaimed it’s time for Ottawa to start taxing the food we eat.

They want Prime Minister Stephen Harper to slap the GST on food and other items currently exempt from the five per cent surcharge.

These include prescription drugs, financial services, residential rents and books, to name a few.

But it’s the food tax that would be the real cash cow.

For every $100 worth of groceries purchased, another $5 would go straight to the taxman.

Given the high (and rising) price of food these days, it wouldn’t take long for all those extra $5 fees to start putting a significant dint in disposable income.

For those who have disposable income, that is. For those who don’t, it would only add to their already-heavy burden.

Look no farther than the Whitehorse Food Bank.

It just chalked up its busiest month to date and it’s nothing to brag about.

About 1,000 individuals used its service in January. That’s a staggering number in a territory of only 35,000 people, a territory that’s enjoying its biggest economic boom since the gold rush.

Yet the food bank struggles daily to meet the growing demand. When food donations aren’t enough, it too has to buy food to feed the hungry when the shelves go bare.

Clearly there are many Yukoners - individuals and families - who can’t afford to buy food now. A new tax would put a decent bag of groceries even farther out of reach.

A flat tax, like the GST, hits rich and poor alike.

But for a government in need of a monetary fix, it’s financial heroin.

It’s easy to obtain, easy to administer and easy to adjust, now and then, to appease the masses.

It’s a no-brainer for raising extra government revenue, say the two economists.

In a single year, it could help the feds rake in another $39 billion, they say. That’s about the same amount of money lost to government coffers when Harper cut the GST rate from seven to five per cent a few years back to win votes.

But even at five per cent, a food tax is politically toxic.

It’s a place not even Brian Mulroney’s Conservatives dared to tread when introducing the GST more than 20 years ago.

At that time, the tax in its current form was so unpopular it prompted the Yukon’s territorial Conservative Party to distance itself from Ottawa and change its name to the Yukon Party.

This time around, the economists recommend a Food Tax Rebate to take out the financial sting.

That’s a nice thought, but if a person doesn’t have the money to buy the food in the first place a rebate is not going to help.

And even if they have the money, a rebate would do little to quell the resentment.

Unless Ottawa is in the mood for a good rumble, it should park this report and quickly move along.

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