Pay-as-you-go fervour

For so many things, governments in Canada, reluctant to raise taxes, are charging users with higher fees. 

Governments in North America are short of funds.  Formerly governments usually paid for their outlays by raising taxes. Nowadays that increasingly is unpopular. By charging ever-higher fees for services, governments do that even though, in many instances, the higher fees seem disproportionate to what is being offered.

If one wished to have a passport, the costs of issuing a new one have soared. Obtaining a copy of a birth certificate, holding or forwarding mail on, the provincial level for a driver’s license, a fishing permit or becoming a naturalized citizen, all have risen substantially.

New fees are cropping up for such disparate activities. They are becoming more numerous and annoying.

The recent spread of higher pay-as-you-go fees has less to do with economics than with political advantage. It is not surprising, therefore, that politicians have used that as a relatively easy way of getting more money. Too often the results distort prices and are manifestly unfair.

Inasmuch as they usually are not very large they escape a great deal of scrutiny. They seem to hit unorganized groups and consequently, are less of a cause of an uproar than higher taxes would involve.

It must be recognized, however, that when the fee exceeds the actual costs entailed, it is really a tax.

Pay-as-you-go fees do affect the most entrepreneurial and can discourage innovation and enterprise.  The cause of the rise of this form of money exaction is the inability of governments to raise taxes.

In Alberta, for instance, that is the only province without a sales tax, really an absurd situation. The Economist describes this as “ideological allergy to raising taxes.” Forthright politicians can break that with courage. In the United States, President Truman raised taxes sufficiently to pay the cost of the Korean War!

When governments provide services over which they have a monopoly; this pay-as-you-go route is commonplace. In a way, this can be justified as one is paying for services rendered.

However, when the charges are exorbitant, they are unethical. What is needed, therefore, in this situation as in so many aspects of good government, are honest politicians. 

Hopefully, not a forlorn wish.



Bruce Whitestone