Support for National Daycare, Pharmacare, and Dental Care Drops When Attached to Tax Increase, Poll Finds

Prescription drugs sit on shelves at a pharmacy in Montreal on March 11, 2021. The Canadian Press/Ryan Remiorz

Over half of Canadians are not enthusiastic about supporting national daycare, pharmacare, and dental care when these programs are to be paid for through an increase in taxes, particularly the goods and services tax (GST), a new poll finds.

All three programs were included or committed to in the 2022 federal budget released by Finance Minister Chrystia Freeland on April 7.

The budget estimates that the $10-a-day daycare will cost the country $7.9 billion yearly by 2025/26, while dental care is estimated to cost about $1.7 billion a year upon full implementation. Pharmacare, though yet to be formally introduced, is expected to go as high as $15.3 billion annually once implemented, based on an estimate by Health Canada in 2019.

“Despite the federal government’s borrow-now, pay-for-it-later approach to public programs, Canadians need to be aware that these new programs have significant costs that will have to be paid for by taxpayers eventually,” said Jake Fuss, associate director of fiscal policy research at the Fraser Institute and co-author of “Polling Canadians’ Support for New Federal Government Programs,” in a press release on May 3.

The online poll, conducted among 1,509 Canadians aged 18 and up from April 15 to April 17, found that more than two-thirds of the respondents show support for these programs when there isn’t any change to existing taxes.

Support plummets, however, when they are presented with the scenario that the GST rate will be raised. The authors said they chose GST over other taxes “because it is visible and paid by all Canadians and they are aware that it is a tax that finances government spending.”

For example, 69 percent of the respondents say they support the introduction of a national $10-a-day daycare program when there is no cost attached. Atlantic Canadians show the strongest level of support at 88 percent, while respondents in the Prairies expressed the least support at 63 percent.

But support across provinces and regions drops “substantially” to only 36 percent if the program is to be paid for by an increase in the GST from 5 percent to 6 percent, the poll shows. Support from Atlantic Canada is nearly cut in half (45 percent), while it’s the lowest in Alberta and British Columbia at 35 percent each.

Likewise, support for universal pharmacare is “overwhelming” when no tax increase is attached, but once a GST hike is included, a large majority of the respondents (79 percent) change their stance, cutting support to only 40 percent.

The same holds true for dental care, with 72 percent of the respondents expressing support for the program, but that number drops to 42 percent when linked with a GST increase.

“The current discussion of such programs is largely founded on the belief that they enjoy overwhelming public support. Numerous polls have been published over the last few years showing incredibly strong support for all three programs. … However, almost none of the polls attach a cost to the provision of these new programs,” the study said.

“Any increase in government spending must be financed in one of two ways: through higher taxes or borrowing. Put simply, governments can either tax today, or they can tax tomorrow in the form of borrowing today.”

The authors argued that the implementation of Budget 2022 by the Liberal government will continue to rely on borrowing and deferring tax increases to the future.

“In other words, the budget offers an incomplete picture of the true cost of these programs because it does not account for the tax increases necessary to pay for current spending,” they said.