Free The Truth About Canada by Mel Hurtig

are being asked to fill the gaps left by the lack of affordable child care, dental care and drug coverage. They are also being asked to fill in for an employment insurance system that for reasons both deliberate and circumstantial no longer covers most people out of work.
Economists Drummond and Manning suggest two new federal programs: an earned income supplement for the working poor (in effect a wage subsidy for employers) and a refundable tax credit for the very poor.
What this means is that poor people would file tax returns even if they have no earned income, and the government would send them cheques. As such, it is a variation on the old guaranteed annual income scheme, an idea that at different times has had currency with both the left and the right. 7
    As Don Drummond has shown, after Mike Harris went to work on Ontario’s welfare system, a single welfare mother with one child could lose as much as 92 percent of the money she would make if she worked 64 hours a week at $7.45 an hour. Because of lost benefits, she would net only $40 extra a week, barely enough to cover the cost of taking public transit to work. Even with some modest reforms by the provincial Liberal government, the same single mother would still face a marginal tax rate of almost 60 percent and, as the Toronto Star has pointed out, if she worked even longer hours to try to escape welfare, her tax rate would increase to 71 percent.
    If this isn’t ridiculous, I don’t know what is.
    The gulf between Canada’s big business leaders and most Canadians on the subject of social policy is enormous, as it is in so many areas covered in this book. Opinion polls show that the vast majority of Canadians continues to support our long-standing social policies and has little or no interest in moving closer to American standards and values. On the other hand, our corporate leaders see their interests best served through even more tax cuts, and they envy their American peers who obviously have little or no interest in effective social policies of the kind found in almost all the other Western democracies. Despite public opinion, successive Canadian governments have chopped federal program spending to levels few ever imagined or supported. (See the chapter on government in Canada for details.)
    How has big business reacted? One poll of Canadian CEOs asked, “Where should provincial governments reduce spending?” In response, 43 percent said social programs, more than three times any other category named.
    Imagine what we could do if our social spending was raised to only the average level of the other developed Western democracies. Think of what we could do in health care, post-secondary education, cutting back child poverty, public housing, school lunch programs, not to mention research and development for renewable energy.
    Where would we get the money? Or, to put it another way, how can we become a more normal developed nation? Some of the answers to thiswill be found in what you’ve already read, and more in the tax section in this book. Before you get to that, let me steal from the Canadian Centre for Policy Alternatives’s excellent publication The Social and Economic Costs of Taxation: “A very famous U.S. jurist, Justice Oliver Wendell Holmes, once remarked, ‘Taxes are what we pay for a civilized society.’ ”
    Despite so much right-wing propaganda to the contrary, the fact is that total tax revenue in Canada as a percentage of GDP put us far down in 21st place among the 30 OECD nations, well below the OECD and EU averages. And this was before the Harper government’s big 2007 tax cuts.
    I am not for a moment suggesting that we immediately bring our social spending all the way up to the average of the EU countries. But I am suggesting, in no uncertain terms, that we should be thoroughly ashamed of our own pitiful level of public social support and that we have lots of room to fix it.
    What could we realistically do to combat poverty in Canada? In