Taxation Policy Introduction
The taxation system in Canada is a shared responsibility between the federal government and the provincial and territorial legislatures. Under the Constitution Act of 1867, taxation powers are vested in the Parliament of Canada for “the raising of Money by any Mode or System of Taxation.” The Constitution essentially gives the Parliament of Canada great power in deciding the taxation policies in place.
The National Citizens Alliance (NCA) believes in fairness to all Canadians, and this applies to any taxation policies. In order to ensure that all Canadians have fair access to the taxation policies and taxation items, including deductions, credits, and other taxation items applicable to these individuals, all taxation information will be made transparent and distributed through all methods of communication enacted by the Canada Revenue Agency (CRA), including its website. Currently, there are several taxation policies held by the CRA which are not displayed to the public, causing confusion and frustration among Canadians. These taxation policies are those included in the CRA’s Internal Handbook, which is not made available for the public, even upon request. The NCA believes this lack of transparency and accessibility by the CRA is unacceptable and undemocratic.
The NCA believes that any taxation system should ultimately be of benefit to the citizens living in an area (Canada). This can be achieved by performing the following:
● The NCA will enact legislation to ensure that the Auditor General is a publicly elected position. Currently, the Auditor General is appointed, which diminishes his or her independence. In order to ensure that the well-being of all Canadians is met, the NCA strongly believes that the removal of such non-independent systems are essential.
● The NCA supports the decentralization of the tax expenditure and reducing amount of tax money the federal government has control over. The NCA will shift all relevant federal taxation revenue to the constituencies, so that the Canadian public through the constituencies can decide how to spend the federal taxation revenue in their communities.
● The NCA supports exploring the elimination of personal income and business taxation through two avenues: consumer taxation and/or government services charged at time of service.
● All federal taxation on consumer products should be fully transparent to the public in the receipt of the purchase. The NCA believes that Canadians have a right to know the total amount of federal taxation on goods and services, not just the government sales tax. This transparency will create more accountability over elected officials.
● Tax revenues earned by the CRA will be subject to an audit by an accounting firm, or consortium of accounting firms, capable of performing an audit of such capacity to ensure that all Canadians are aware of the taxation revenues being collected by the Federal, Provincial, and Territories Governments. This accounting firm will also rotate once every 5 years with all documentation being presented to the successor accounting firm. The NCA believes this step is necessary due to avoid any appearance or otherwise of corruption.
● All tax revenues earned by the CRA will be presented to the Canadian public via online access and other communication methods of the day, indicating the planned use of the taxation revenues earned during that period. Any taxation revenues that are carried forward from a previous year will be indicated as being carried forward. Any deficits that the Canadian Government indicates through taxation revenues will also be noted. A detailed description of the use of the citizens’ funds will be described.
● The Canadian national debt is approximately $652 billion with accruing interest of around $30 billion per year when the national gross domestic product (GDP) is only approximately $2 trillion. This means that the national debt is about 32% of the GDP. A recent federal financial report projected a federal debt of around $1.5 trillion by 2045. Therefore, reducing the national debt is a significant factor in reducing taxes, while at the same time increasing the effectiveness and efficiency of government services.
In order to ensure that the collected taxes benefit the general public, the NCA will present the following changes to the Parliament regarding personal taxation issues:
● The NCA will create effective measures that address the hundreds of billions of Canadian revenue in offshore tax havens. As a party we support a one-time tax of around 10% on Canadian revenue in offshore accounts, and at least a 7% reduction in federal taxation.
● The NCA supports complete rescindment of federal carbon taxation, and it will encourage the provinces to rescind any provincial carbon taxation. (See the party’s Rescind the Carbon Tax policy statement).
● The NCA supports making interest payments on mortgages tax deductible, which will in turn stimulate the economy through increased house purchases
● The NCA supports making medical expenses in the middle income bracket tax deductible, which will in turn stimulate the economy and encourage better health care.
● The NCA supports abolishing federal personal taxes on income earners of less than $30,000 in provinces dependent on equalization payouts.
● All charges made to citizens for late filings, penalties, or any other charges will conversely be credited in the same manner by the CRA as they are being charged to the citizens. This will occur in the same manner as CRA currently has in place and will affect both the citizen in question as well as the Canada Revenue Agency. The effective date for annual filings as well as the noted penalties and charges will be April 30 of the following year. Therefore, if a citizen makes an early filing, he or she will receive a corresponding credit in a similar amount to a charge for a late filing equivalent in value to late filing penalty and interest calculated in the same fashion. This procedure ensures that the CRA is not held above the citizens of Canada and ensures fairness between both parties.
● All personal tax returns will be submitted to the CRA with supporting documentation attached. This will reduce the timing necessary to refund each citizen with their allowable reimbursement and also reduce time and costs involved with performing audits and assessments of these returns. If any amount is still owed to the CRA after this has occurred, the CRA will charge the same penalties and interest currently in place (conversely, if the citizen is owed from the CRA, the same penalties and interest currently in place will be owed to this citizen). If any amount has still been unpaid at the time of the following year return, CRA has the right to withhold payments and net any amounts due to citizens at this time. This will ultimately have the goal of creating efficiencies in the current CRA organization in order to ensure that the information and monies discussed are distributed and collected fairly, equitably, and transparently.
● The National Advancement will conduct an independent inquiry into the feasibility of replacing personal income tax with a combination of consumer taxation and government services charged at time of service.
● The National Advancement supports a two-tiered flat tax: Less than $22,000 (poverty line) no tax; $22,000 to $200,000 15%; $200,000 and greater 25%
● conduct an independent inquiry into the feasibility of replacing the business tax with a combination of consumer taxation and government services charged at time of service
● exempt the personal capital gains tax on asset sales of small businesses
An important discussion relating to taxation in Canada involves the taxation of corporations as well as the taxation of persons. The NCA believes that fair taxation of these two groupings is important to ensure that the well being of the citizens of the country is being met. Everyone should be treated the same. The NCA will propose the following relating to corporate taxation policy:
● The NCA will keep in effect the current corporate taxation rules as deemed by the Income Tax Act (1985). However, the NCA will present a vote to the House of Commons within 24 months of being elected regarding the taxation of corporations as is proposed below. The vote will require a minimum 70% vote support by the House of Commons in order to be implemented over the period discussed below.
o flat tax applied to all businesses equally set at 9% or lower. This tax will generate more income in the private sector, which in turn will stimulate private sector growth, and thereby growth in employment.
Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are changes in the level and composition of taxation and government spending in various sectors. The NCA will take a similar stance to the current fiscal policies currently held by the Canadian government, including the use of neutral, expansion, and contraction fiscal policies when deemed necessary. Therefore, the use of the personal and corporate taxation policies noted above, which are the largest revenue collection instruments currently operated within Canada, are extremely important in the Canadian federal government’s ability to use these strategies during times deemed necessary.
Reduction of the national debt is an extremely important factor in creating a healthier economy and fewer burdens on the general public and future generations. It also promotes security, independence, and freedom. The NCA will have an ultimate goal of reducing the national debt during each 5-year period.
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment. Monetary economics provides insight into how to craft optimal monetary policy. Monetary policy is referred to as either being expansion or contraction, where an expansion policy increases the total supply of money in the economy more rapidly than usual, and contraction policy expands the money supply more slowly than usual, or even shrinks it. Expansionary policy is traditionally used to combat unemployment in a recession by lowering interest rates in the hopes that more accessible credit will entice businesses to expand. Contraction policy is intended to slow inflation in order to avoid the resulting distortions and deterioration of asset values.
The NCA will take a similar stance regarding monetary policy as that currently in place by the Canadian federal government and will utilize similar measures as indicated below with the exception of the role of the Bank of Canada:
● establish an independent role for the Bank of Canada, whereby it functions with complete independence from political influence; an independent citizen committee comprised of financial professional from all regions of Canada will determine the Board of Directors for the Bank of Canada. Instead of the Bank being tied to political ideological agendas, the Bank will serve the best interests of the Canadian people.
● authorize the Bank of Canada to pay off all federal debt that is owned to commercial banks and banking institutions both domestic and international. The debt incurred by the Bank of Canada will be charged to the Canadian people at zero percent interest.
● restore the 1934 Bank of Canada Act and amend the Act so that the Bank of Canada is fully independent of the federal government and in complete service of the Canadian people.
● rescind all legislation that is in contradiction of the 1934 Bank of Canada Act.
● cease all federal loans with commercial banks.
● establishment mechanisms to protect Canadian people who make deposits in banks from any bank recapitalization, and the Canadian people would not be subject to the bail-in regime
● legislate mandatory federal balanced budgets as one way to deal with growing massive debt.
● establish an aggressive pay back plan of the federal debt that is owed to the Bank of Canada, in order to pay off the debt and reduce inflationary pressures
● review mortgage regulations for fair across-the-board competition in order to ensure the lowest consumer mortgage cost; do not use Bank of Canada rate as the benchmark; rather use a more moderate rate between the Bank of Canada posted rate and the current contract mortgage rate; allow for refinances to be included in portfolio insurance; consult all the stakeholders on mortgage regulations
● inflation and price level targeting: The overnight debt rate held by the Bank of Canada is the primary driver behind these monetary policies, and the NCA will consult with the Bank of Canada regarding the level of the overnight debt rate to ensure that the Consumer Price Index (CPI) and other inflationary indices are held at the appropriate long-term rate of between 1% and 3% per annum
● monetary aggregates: The Bank of Canada and the Canadian Parliament have direct control over the growth in the money supply in Canada. To ensure that unemployment, inflation, and other macroeconomic factors are held in equilibrium over the long-run, the NCA will consult with the Bank of Canada and other federal political parties to ensure that the overall well-being of the Canadian people comes first. The amount of money supplied in the economy will be approved monthly by a consortium of elected officials currently on the Board of the Bank of Canada to ensure that the interests of the people are being presented and upheld, and instead of the current partisan appointed Board by the Prime Minister. This report will also be presented to the Canadian public via an effective medium to ensure that the decisions made by the Bank of Canada are transparent to the public they are serving
● foreign exchange: The NCA will consult with the Bank of Canada on a continuous basis to ensure that any matters of foreign exchange policy do not detriment the citizens of Canada by enhancing the lives or economies of foreign countries before enhancing the lives of Canadian citizens or the economy of Canada
The National Citizens Alliance is concerned about the overall well-being of the Canadian people; therefore, the NCA will approach these complex issues of taxation, fiscal, and monetary policies on a semi-annual basis to ensure that the well-being of the people are being met from a financial standpoint.
Furthermore, all items under each of the policies noted above will be publicly presented on a semi-annual basis to the public to ensure transparency between the Government of Canada and the people residing within Canada. This will ensure that the Canadian public is aware of the policies being undertaken with the Canadian public’s money.
Accumulated different types of penalties, interest and service charges must have an upset value, which must not exceed 100 percent the original assessed taxes for both individuals and corporations.
The NCA encourages the majority of Canadians to be involved and active with Canadian taxation, monetary, and fiscal policies, which is considered one of most important policy for the country and its people. Increasing government efficiency and effectiveness while reducing politicians’ and all levels of government waste will positively impact fiscal policies and consequently will reduce the national debt.
Created: 2014-07-19; Last updated: 2019-02-17
The NCA membership vote on 2014-07-18/19. The vote resulted in 100 percent of membership in favour of the Taxation, Monetary, Fiscal Policy Statement with a 66.6 percent quorum. This vote outcome satisfies the minimum 70 percent membership support and 50 percent quorum required for adoption of policies as per the NCA Constitution.
The NCA welcomes feedback on its policies. Please send policy feedback to email@example.com