Paying for Equity: The Role of Taxation in Driving Canada’s Educational Success

In 1994, several social policy organizations collaborated to challenge the claim by the federal government that Canada’s fiscal debt was the result of overspending on social programs and that public investments had to be severely curtailed. Because most of the mainstream media accepted and propagated this view, the public had limited access to research showing that it was not overspending, but rather the under-collection of taxes, that was the source of the problem.  Using research conducted by the federal government’s own finance department, the social policy groups released the report, Paying for Canada: Perspectives on Public Finance and National Programs.[1] It showed that deliberate government policy to reduce taxation levels for some of the most economically advantaged groups in Canada had resulted in a significant decrease in public revenues, thereby fuelling a debt “crisis”.

With five Canadian provinces going to the polls in 2011 and another recession looming, it is important to understand the critical role of stable taxation levels in supporting this country’s success in education. As several writers have pointed out in this issue, Canada’s educational outcomes are much better than those of the U.S. – and the impact of socio-economic status on those outcomes much lower – for a combination of reasons: lower levels of inequality and child and family poverty, higher wages, better support for immigrants, better housing and health care, equitable financing policies, better qualified and motivated teachers, and less variation in quality of schools.[2]

It is no coincidence that Canadians also pay higher taxes than Americans. One of the biggest differences between Canada and the U.S. is the relative willingness of Canadians to pay taxes at a level needed to support investments in our education, social, and health care systems. Public opinion polls repeatedly show that Canadians do not balk at paying taxes for what they value. Currently, this is being demonstrated in Toronto and other municipalities across the country, where citizens are rejecting proposals by their city councils to cut libraries, parks, and other public services.

Concerns are often raised that Canada may follow in the footsteps of the U.S. and introduce educational policies such as merit pay for teachers and high stakes testing that are both punitive and ineffective.  Although these policy ideas are sometimes discussed in Canada, there does not appear to be an appetite among provincial governments to emulate American educational policies. A bigger threat to educational quality and equity might be their inclination to follow the U.S. in its low tax agenda.

Canadians pay for decent public education, health care, and safe and inclusive cities through progressive taxation based on the principle that those with higher incomes should pay a higher proportion in taxes ­– a principle President Obama has been struggling to implement in the U.S. Despite political claims to the contrary, there is evidence that Canadians are willing to pay increased taxes for education. Research commissioned by the Canadian Education Association in 2007 revealed that a majority of Canadian residents outside Quebec[3] – both with and without children – would pay more to support schools.[4]

Reducing tax levels not only reduces overall funding, it exacerbates inequities. Despite its positive international standing, Canada is drifting toward higher inequality – as groups as diverse as the Conference Board of Canada and the Canadian Centre for Policy Alternatives have pointed out. A good example is school fundraising to subsidize budgets; disparities in school-generated funds are “deepening inequalities and leading to gaps in learning opportunities” because of the vastly different financial capacities of neighbourhoods to raise money from the people who live there.[5]

Quality education and a high level of equity require sustained public investment – an investment Canadians have demonstrated they are willing to make. Public education is the foundation that prepares our children for the future they will inherit and helps ensure they have the competencies needed not only to compete in a global economy, but to live together in a globalized world. Lower taxes compromise both the excellence and equity agendas and shortchange our children and the nation’s future. The polls suggest that citizens may be ahead of some of their governments in their understanding of the need to “pay for Canada” and pay for educational excellence and equity.

[1] Child Poverty Action Group, Citizens for Public Justice, and Social Planning Council of Metropolitan Toronto (SPCMT), Paying for Canada: Perspectives on Public Finance and National Programs (Toronto: SPCMT, 1994).

[2] See the article by Ben Levin in this issue of Education Canada.

[3] In Quebec, it was slightly lower at 46 percent.

[4] Jodene Dunleavy, Public Education in Canada: Facts, Trends and Attitudes (Toronto: Canadian Education Association, 2007).

[5] Lesley Johnston, Public System, Private Money: Fees, Fundraising and Equity in the Toronto District School Board (Toronto: Social Planning Toronto, 2011).