Bonjour ! Hi !
A 'seemingly' simple question
2018/August/08 - Yaniv Loran
Generally, when I’m asked a ‘seemingly simple’ question, the person asking the question expects a ‘seemingly simple’ answer.
This morning, in light of the Conservative Party of Quebec’s “let parents decide” poster referencing the arcane rules and regulations of Quebec’s so-called 7 $ per day daycare, I was asked “What’s your view on daycare?” I’m making an educated guess that what is really being asked is “What is my view on subsidized daycare?” This was coming from a mom who benefits from the program and was thus gently warning me NOT to give her an answer she didn’t like.
I’m sorry – I might be running for political office but I'm not a politician. I simply can’t do that.
Before we go any further, I’m cautioning you, you are talking to a statistician so I’m about to throw numbers at you and you’re not going to like what you’re about to hear.
Let’s start at the beginning shall we?
According to Statistics Canada’s census data …
In 2016, Quebec’s population was 8,164,361 individuals distributed across 3,531,665 households. The median household income was $59,822. The average household income is unavailable and thus though far from perfect, I have to use the median household income instead.
This morning, in light of the Conservative Party of Quebec’s “let parents decide” poster referencing the arcane rules and regulations of Quebec’s so-called 7 $ per day daycare, I was asked “What’s your view on daycare?” I’m making an educated guess that what is really being asked is “What is my view on subsidized daycare?” This was coming from a mom who benefits from the program and was thus gently warning me NOT to give her an answer she didn’t like.
I’m sorry – I might be running for political office but I'm not a politician. I simply can’t do that.
Before we go any further, I’m cautioning you, you are talking to a statistician so I’m about to throw numbers at you and you’re not going to like what you’re about to hear.
Let’s start at the beginning shall we?
According to Statistics Canada’s census data …
In 2016, Quebec’s population was 8,164,361 individuals distributed across 3,531,665 households. The median household income was $59,822. The average household income is unavailable and thus though far from perfect, I have to use the median household income instead.
Quebec 2016
Individuals: 8,165,361
Households: 3,531,665
Median household income: $59,822
3,531,665 x $59,822 = $211,271,263,630
Total household income: $211 billion
Gross domestic product: $395 billion
211 ÷ 395 = 54%
Total combined tax intake: $152 billion
152 ÷ 395 = 38.5%
After tax household income: $0.62 per $1.00
Individuals: 8,165,361
Households: 3,531,665
Median household income: $59,822
3,531,665 x $59,822 = $211,271,263,630
Total household income: $211 billion
Gross domestic product: $395 billion
211 ÷ 395 = 54%
Total combined tax intake: $152 billion
152 ÷ 395 = 38.5%
After tax household income: $0.62 per $1.00
3,531,665 Quebec households x $59,822 of median income per Quebec household = $211 billion in Quebec household income.
In 2016, Quebec’s Gross Domestic Product (GDP), a fancy way of saying all the money earned in the province in the year was approximately $395 billion. That means that household income represents approximately 54 cents out of every dollar earned. The balance, of course, is what is earned by business.
In 2016, Quebec households and businesses paid a combined total of $152 billion in federal, provincial, municipal and consumption taxes, or about 38.5% of our GDP. What that basically means is that on average, Quebec households and businesses get to keep a smidgen more than 60 cents out of every dollar they earned.
If you didn’t know, Quebec has had the highest overarching rate of taxation in Canada since 1982. The average rate of taxation in the ROC (rest of Canada is 30.4%). We Quebeckers pay approximately 8.1% more tax than the average Canadian. This might not sound like a lot until you grasp the fact that what this means is that we are paying approximately $32 billion more in taxes EACH AND EVERY YEAR than the average Canadian.
Average Canadian rate of taxation: 30.4%
Average Quebec rate of taxation: 38.5%
The average Quebec household pays 8.1% more tax than the average Canadian household
Median Quebec annual household income: $59,822
Average Canadian annual household tax: $18,186
Average Quebec annual household tax: $23,031
The average Quebec household pays $4,845 more tax each and every year than the average Canadian household
$4,845 per household
x 3,531,665 households
= $17,112,576,808
Quebec households pay $17 billion more in tax than their typical Canadian cousins each and every year
Average Quebec rate of taxation: 38.5%
The average Quebec household pays 8.1% more tax than the average Canadian household
Median Quebec annual household income: $59,822
Average Canadian annual household tax: $18,186
Average Quebec annual household tax: $23,031
The average Quebec household pays $4,845 more tax each and every year than the average Canadian household
$4,845 per household
x 3,531,665 households
= $17,112,576,808
Quebec households pay $17 billion more in tax than their typical Canadian cousins each and every year
Since Quebec households contribute approximately 54% of all tax dollars, this means that Quebec households are paying $17 billion more in taxes EACH AND EVERY YEAR than the average Canadian household.
Since there are approximately 3.5 million Quebec households, this means that the typical Quebec household is paying just a shade under $5,000 more per annum EACH AND EVERY YEAR than the average Canadian household in taxes.
The average Quebec household pays $4,845 more tax each and every year than the average Canadian household
The typical taxation life-cycle: 45 years
$4,845 per household in excess tax per annum
x 45 years
= $218,046
$218,046 per household in excess tax per lifetime
x 3,531,665 Quebec households
= $770,065,956,340
Over a lifetime, the typical Quebec household pays $218,000 more in taxes than the typical Canadian household
Over a lifetime, collectively, Quebec households pay $770 billion more in taxes than typical Canadian households pay
The typical taxation life-cycle: 45 years
$4,845 per household in excess tax per annum
x 45 years
= $218,046
$218,046 per household in excess tax per lifetime
x 3,531,665 Quebec households
= $770,065,956,340
Over a lifetime, the typical Quebec household pays $218,000 more in taxes than the typical Canadian household
Over a lifetime, collectively, Quebec households pay $770 billion more in taxes than typical Canadian households pay
The typical taxation life-cycle is very roughly 45 years. $5,000 per annum x 45 years is approximately $225,000 in extra taxes paid when compared to the average Canadian household and this doesn’t even begin to take into account the fact that had you used this money to reduce your credit card debt (20% per annum), your mortgage (10% per annum), to invest in the TSE (10% per annum) or in your RRSP, the amount that you would keep in your pocket would be even greater. And remember, this is compared to the Canadian average – it is not compared to the lowest taxed Canadians.
Just to give you a sense of perspective, collectively, over a lifetime, Quebeckers pay $770 billion more in taxes than typical Canadians would pay.
Over a lifetime, collectively, Quebec households pay $770 billion more in taxes than typical Canadian households pa
Administration costs: 20%
$770 billion x 20% = $154 billion
Of the $770 billion more in taxes that over a lifetime, Quebec households pay, $154 billion are NOT spent on services.
And if you didn’t already know, please understand, the second the government of Quebec puts its sticky fingers in your pocket, 20% of the dollars are spent on administrative functions associated with taking your loonies and toonies and moving them hither and yon within the ivory walls of government and that doesn’t even begin to take wastage into account.
Just to give you a sense of perspective, collectively, over a lifetime, the government of Quebec spends approximately $154 billion administering this $770 billion more in taxes that typical Quebeckers pay.
Now back to daycare. What started out as a $5 per day program and then became a $7 per day program and now is an anywhere from $7.30 to $20 per day program (depending upon earnings and the number of children in care), benefitting 29,500 families to the tune of anywhere from $374 to $1,176 per annum per household, is (superficially) costing taxpayers approximately $14,000,000 per year.
The reason I say superficially is because this does not even begin to cover the administrative costs associated with the government’s time and resources and this does not even endeavour to take into account the amount of time and energy spent by individuals trying to take advantage of the program.
Now, why was the program introduced in the first place? Oh right, to enable families who could not otherwise afford to do so to return to work to earn more income.
Sounds great right? Except, because the very nature of universal childcare means that everyone is eligible, wealthier families inevitably occupy spots that could/should go to families in desperate need of affordable daycare. In fact, families with the highest annual incomes in the province are twice as likely to have a child enrolled in the universal program as compared to families earning the lowest incomes. Well, what a surprise. The wealthy have the knowledge, contacts, skills, time and resources to best take advantage of these programs.
Furthermore, the waiting lists for subsidized daycare is long, long, long, and since the introduction of subsidized daycare, the quality of daycare as measured by the Québec Longitudinal Study of Child Development has plummeted.
So, “what is my view on daycare?” I think daycare’s great.
My view on subsidize daycare is something else entirely. My view on subsidized daycare is the same as my view on a wide range of misused government programs; eliminate them where possible, leaving the money in your pocket.
But what about the fragile families that these programs were put in place to protect you protest?
• Just by reducing Quebec taxes to the Canadian average will put almost $5,000 back into each household’s annual budget EACH AND EVERY YEAR IN PERPETUITY.
• Closing even half of the multitude of special interest tax loopholes which only benefit the few would simplify our tax structure and make it much more equitable.
• By universally increasing the basic deductible, we will all get to keep a little bit more in our own pockets but for those who earn the least this will have an extremely significant impact.
With all of this in the bank, I strongly suspect that the lion’s share of Quebeckers will be more than able to afford daycare if and when they need it and they can then decide for themselves which daycare options are best suited to meet their own specific needs.
I find the Quebec government’s attitude of involving itself in every aspect of its residents’ lives paternalistic and that is putting it kindly.
I’m sorry if this is not the answer that you were hoping for but this is the best I can do.
Yaniv
Citations:
https://montrealgazette.com/…/health-daycare-and-work-tax-b…
https://montrealgazette.com/…/quebec-income-tax-rate-the-th…
https://www.huffingtonpost.ca/…/child-care-subsidy_n_817818…
https://www12.statcan.gc.ca/…/dp…/hlt-fst/inc-rev/Table.cfm…