Taxes are the primary source of revenue for the Federal, Provincial, and Municipal governments in Canada.
Various levels of government in Canada provide education and healthcare, infrastructure such as roads and bridges, law enforcement, defense, municipal water and garbage collection, snow removal, and affordable housing. These programs may appear to be “free” but they are funded by the income taxes and property taxes paid by Canadians to the various levels of government, and then reallocated to the various programs.
The Canadian system is based on the foundation that all Canadians should pay taxes to contribute to the programs for the common good. Not everyone uses healthcare, schools, or roads to the same extent, but everyone has access to these services, and our Canadian philosophy is that we are collectively better off with this shared responsibility for these services.
Approximately 50% of Federal revenue comes from personal income taxes, 15% from corporate income taxes, 11% from GST revenues, 7% from Employment Insurance premiums, and the remaining 17% from other taxes and duties (Note 1).
All government expenditures, including individual and business support programs, come from taxpayer money. The government has no income other than what it raises through taxes. The Federal government supports some programs directly, or supports provinces and municipalities through transfer payments, who then in turn deliver programs. Municipal governments raise additional funds through property taxes.
In our next segment we will deal with the topic: why some people get refunds and other people have to pay.
We hope you will find this information valuable and will increase your financial confidence. You can always find these articles on our website anytime at www.actionfinancialgroup.com.
Karin Rimnyak, Certified Financial Planner®
Investment Advisor
Insurance Advisor, Action Financial Group Ltd.
David Dryburgh, Certified Financial Planner®
Investment Advisor
Insurance Advisor, Action Financial Group Ltd.
Ian Barrie, Certified Financial Planner®
Investment Advisor
Insurance Advisor, Action Financial Group Ltd.
This information has been prepared by Karin Rimnyak who is an investment Advisor for iA Private Wealth. Opinions expressed in this email are those of the Investment Advisor only and do not necessarily reflect those of iA Private Wealth. iA private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and business name under which iA Private Wealth Inc. operates.
