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Government urged to cut spending, taxes
Toronto—Federal expenditures are out of control, according to the C.D. Howe Institute, a national, non-profit analysis organization based in Toronto.
Ottawa’s program spending started burgeoning around 2000 and has exploded since then, said William Robson, senior vice-president and director of research with the Institute, in an e-brief.
He pointed to statistics showing the average government department spent 50 per cent more on operations in 2004/2005 compared to 1999/2000.
According to the outgoing federal government, program expenses have indeed been increasing—by 15.1 per cent between 2004 and 2005. For the 2003/2004 time period, expenses were up 5.8 per cent. In 2002/2003 they increased 6.6 per cent.
The government is also being urged to cut taxes to spur productivity. The Fraser Institute (Vancouver), an independent public policy organization, recommends cutting the federal corporate income tax to 12 per cent from 21 per cent; and eliminating corporate capital taxes entirely at both levels of government.
“The dramatic business tax relief proposed would place Canada in the upper echelons for investment and development among industrialized countries,” said Niels Veldhuis, associate director of fiscal studies with the Institute.
Current tax levels are discouraging investment, the report concluded.
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