Canadians want courageous politicians that lead us toward our goals. Or do we?
1. We want to be prosperous in the long run. This means fostering economic growth while remaining fiscally responsible. In other words, we need to raise taxes or cut spending (though one can argue with the timing) while hurting growth as little as possible. (Fortunately, thanks to previous austerity, we don't need to do so nearly as much as any other ex-G7 country.)
2. We want to maintain our system of public universal health care. Since health care innovation and population aging push medical costs up faster than nominal economic growth, over time, a greater portion of our income will have to go toward health care. Thus, even if our governments cut other spending, it will be difficult to cut spending overall.
Combine 1 and 2, and it's clear that our governments need to find a way to raise taxes without choking the economy. Apart from Pigovian taxes (taxes on activities that hurt bystanders - we'll come back to that in a second), consumption taxes are widely considered by economists to make less damage per dollar raised than taxes on other things (e.g. wages, investment income, profit, trade). And among consumption taxes, designs that treat all sectors of the economy equitably (i.e. that do not tax certain goods twice and exempt others) cause less harm.
3. We want to leave a decent environment to future generations. If the scientific consensus is correct, this will involve drastically cutting our carbon emissions. Although Canada doing so on its own is unlikely to make a difference, if we find a way to aggressively cut our emissions, we may inspire other countries to do so. After all, if small European countries had not already taken action, the large ones would likely be farther away from doing so, and the U.S. might not even be talking about it!
The problem with carbon emissions is, of course, that if polluters and their clients gain from a transaction, they will engage in it even if everyone else loses. If the loss outweighs the gain, that's a bad thing for overall welfare. The solution is clear: incorporate the costs borne by others into the transaction, and then, automatically, only transactions where gains outweigh losses will occur.
The two solutions that I'm referring to above are, of course, value-added taxes (i.e. GST/HST) and carbon taxes. We all know what happens to politicians that enact/increase those levies. Why?
Surely, we Canadians are not sabotaging ourselves willfully. We should also be smart enough to understand what's going on: we do have one of the world's best elementary and secondary school systems, and some other countries (mainly small ones in Northern Europe) did get it. Maybe we're so smart we found something better? If that's true, I must be out of the loop.
No, most Canadians simply do not get what's going on. Why?
1. Too many Canadians are lazy with regards to their civic duty. Canadians are also very cynical about politics. But cynicism can be a good thing - pushing people to think critically about what the politicians are saying. Unfortunately, that cynicism is coupled with laziness. Result: "I don't trust that politician AND I'll too lazy to find out if what he says is right. So I'm just going to go with my gut feeling." Of course, other than spoiled food and serious emotional distress, taxes rank right up there in things that don't sit well with the gut.
2. Our media are lazy. You want to read a serious article about the costs and benefits of consumption and carbon taxes? Good luck. Either you will not find anything more than 5 paragraphs long, or you will find a seemingly deep article until you realize that 90% of the sources are either unqualified or have a stake in the issue. On the HST debate, the CBC's approach was to mostly invite politicians and their staff, people affiliated with organizations/think tanks aligned with political parties, or, in one occasion, a "marketing expert" (who, from the looks of it, may have failed Econ 101) to analyze the likely effects of harmonization. Neutral economists? "Nah! They're kind of boring, don't come to us, and may take multiple calls or emails to get a hold of. So why bother?" And of course, the pundits spend 5 times more time talking about how complex the policies are and what the political ramifications might be than it takes to actually break down and explain the main pros and cons.
What's going on in Ottawa now? Probably at least two thirds of our politicians (and certainly all the leaders) know that raising the GST and/or instituting a carbon tax would benefit the country by reducing the deficit, creating room to cut other taxes and/or raising money for government programs at relatively low cost. Not a single one of them is going to champion these ideas anytime soon, and all will pounce on anyone that might be foolish enough to do so.