Tax credits: great politics, bad policy

Sherri Torjman, May 2015

In recent years, Ottawa has relied increasingly on the personal income tax system to achieve economic and social goals. The result is a tax system that is stretched to the limit.

The income tax system collects revenues and acts as the delivery mechanism for certain income security benefits. It plays a third role in helping Canadians offset costs they incur that are deemed to have a “social purpose,” like medical expenses, disability supports and caregiving services.  This commentary argues that these same funds could be better spent on the accommodation of environments and investment in supports such as technical aids and equipment, and services such as home care.

The income tax system is an excellent mechanism for raising funds and for delivering income benefits.  It is not the best way to achieve other important societal objectives.

While tax breaks make great politics, they are seriously wanting in addressing Canada’s aging population, the participation of persons with disabilities and the high incidence of chronic disease.