Recently I took issue with a statement made by a candidate for mayor in Edmonton’s present election. Criticizing another candidate, she claimed on her blog:
“He says a consumption tax like GST which hits everyone—including seniors and low-income families—is better for Edmonton than a property [tax] which only touches property owners and leaves renters and low-income earners”
Frankly, being myself perhaps something of an odd fellow — a low-income earner and a property owner — I was shocked by Ms Leibovici’s apparent lack of understanding of taxes in Canada. I will explain.
First, she claims that the GST “hits everyone—including seniors and low-income families”. While true that with the vast majority of purchases, everyone makes a deposit on the GST, for low-income earners that deposit is wholy or partly refundable, the refund indexed to income. From the Canada Revenue Agency:
“The GST/HST credit is a tax-free quarterly payment that helps individuals and families with low or modest incomes offset all or part of the GST or HST that they pay.”
The clear fact is that the GST does not hit everyone regardless of ability to pay, contrary to Ms Leibovici’s first claim.
Second she claims that property tax “only touches property owners and leaves renters and low-income earners”. This claim strikes me as patently absurd. While some small rental property owners may not carefully enter property taxes into the expense side of their ledger, the taxes are paid, presumable out of the income provided by the renter’s payments. Furthermore, if a rental management company failed to list something as obvious as property tax as an expense against rental income, I, for one, would not want to be a shareholder in such an incompetent management company.
As an impartial comment, here’s what Statistics Canada has to say:
” Homeowners pay property tax directly to their local government whereas renters pay through their rent. . . .
Since property taxes are not directly related to the ability to pay, they may be a particular burden for some. . . .”
So, there you have it. Property tax impacts all while the burden of GST is lightened for low-income families by predictable quarterly credit cheques, the direct opposite of the claims made by Ms Leibovici. I trust that low-income earners understand where their hard-earned dollars go and how much is returned through refunds and credits. I also have no doubt that low-income renters feel that they are just as much tax payers — just as much impacted — just as much contributors to Edmonton’s civic fabric — as their wealthier neighbours.
I’m thinking now of my friend Angus, now gone to his greater reward (as my father would say). Angus was a Loyal Eddy, veteran of Ortona, widower, homeowner. Angus lived on a fixed, low income. Angus payed GST and got quarterly credit cheques indexed to his income. Angus paid property tax regardless of his income as a retired, veteran, widower senior. Angus and hundreds – perhaps thousands – of other low-income earning Edmontonians – seniors and otherwise, property owners and otherwise – put the lie to Ms Leibovici’s claim that the GST is indiscriminate and property taxes only affect rich property owners.
I worry when a candidate, either out of ignorance or out of an appeal to perceived voter ignorance, makes such erroneous claims about taxation during an election campaign.