With an imminent federal election in Canada that will pit Liberal leader and newly minted Prime Minister Mark Carney against Conservative Pierre Poilievre, one thing is clear: the country as a whole will be moving further to the right. Carney has vowed to pull the Liberal Party back to the political centre by capping the size of the federal government and reducing federal spending. He also eliminated the carbon tax as one of his first acts as Prime Minister.
Carney, although never having sought or won elected office, is seen by many Canadians as more qualified to handle economic negotiations, having earned a bachelor’s in economics from Harvard and both a master’s and doctoral degree in economics from Oxford. He worked at Goldman Sachs for several years before serving as the Governor of the Bank of Canada and the Bank of England. Compared to a young, populist-leaning career politician, Carney seems the more serious leader.
Whichever party wins will face a citizenry that seems to agree that reducing the power and size of the federal government is a good idea. For many people, that means reducing their tax burden, especially in my home province of British Columbia. The frustration is not only due to the historically high tax rates but also to the huge amount of money being given to a centralized decision-making body with all the power over where and how it will be distributed.
I’m an advocate for more personal control and agency in many areas of society, most prominently in areas of housing and homeownership. I’ve studied the systemic challenges in the housing market and pushed for an aggressive approach to policies that will increase homeownership, including a “shared equity” model. My research has given me a deep understanding of how centralized decisions have a dramatic impact on individual opportunities and choices.
History has shown us that centralized decision-making, especially in matters of the economy, leads to painful inefficiencies and failures, as in the downfall of Communism
due to central control over prices. I think the lesson can arguably be applied to our system of wealth redistribution through taxation.
Imagine if, out of the 33% of our income that is taxed, we had control over just 10% of the way those tax dollars – our dollars – were allocated, so long as it went to registered Canadian charities?
As it stands now, the decisions on all allocations and redistributions are left to a “central governing body”. In terms of increasing incentives for personal achievement and growth, there is plenty of wisdom in allowing each person to have some say over part of the allocation of their taxes to the charities of their choice. I do not believe that government-centralized decision-making is the best or only choice when it comes to the redistribution of wealth.
As our federal leadership transitions and faces looming economic challenges, I hope that sensible ideas like shared equity and changes in tax-dollar allocation systems can be increasingly considered as a means of facing them.