Chapter 8

Report
To what extent should Canadians support social
programs and taxation?
What are social programs?
 Services provided by the government and paid for by
taxes.
 Aim to reduce economic inequalities and promote the
well-being of all citizens.
 Examples of social programs: health care, pensions,
income assistance, education, affordable housing, child
care services, employment insurance
Social Programs in Canada
 Primary value = COLLECTIVISM – providing for society as a
whole is important
 belief that all people should have equal access to services
considered essential (health care, pensions, income assistance,
etc…)
 take care of those groups who may not be able to provide for
themselves
 social programs should be publicly funded using tax dollars
 Government Responsibilities:
 pass legislation to protect delivery of publicly funded essential
services


laws against private health care
appropriate taxes to cover expenses of social programs
 provide for those who cannot provide for themselves
Examine the chart on p. 273 and record the following:
What social programs are provided?
How is each program provided?
How is the government involved?
Health care in Canada
 Under the Canada Health Act (1984), health care is to be
administered by each province. Every province and territory
must provide health care which respects the following
principles:
1. Universality – available to everyone
2. Accessibility – available within reasonable time and distance
3. Comprehensiveness – applies to care provided by hospitals,
physicians, surgeons
4. Portability – available everywhere in Canada, no matter
where you make your home
5. Public administration – run by government for no profit
Sustainability of the Public Health
Care System
 In some Canadian provinces, including Alberta, there
has been debate related to the interpretation of the
Canada Health Act. Specifically, to what extent the
public health care system can or should allow
privatization of some health care services either
alongside or within the public system.
 For example, in Alberta, private clinics offer MRIs to
those who are willing to pay for the service.
Other social programs in Canada
 Maternity Benefits
 EI/Maternity benefits allow new parents to stay with
their newborn child for up to 50 weeks.
 15 weeks maternity benefit for the mother
 35 weeks for parental or adoptive benefits which can be
shared by both parents
 Pension Plans
 Canada Pension Plan (CPP) or Quebec Pension Plan
(QPP) covers all employees and self-employed
Canadians who pay into the plan.
 Monthly benefits can start at age 60
Issues with Canadian Social Programs
 Affordability of social programs and health services will be
affected by the aging population and the ability of the
working population to support these costs.
 The proportion of the population aged 65 and over will triple
from 1976 to 2051.
 Health care costs, as of 2008, are increasing by at least 8% a
year.
 With this in mind...
 How can we afford health care in the future?
 Should we allow privatization of some health care
services either alongside or within the public system?
Social Programs in the U.S.A.
 Primary value = INDIVIDUALISM – belief that people
should provide for themselves
 only very low-income earners should qualify for publicly
funded social programs (limited access).
 less public funding and more privately funded social care
 for-profit: guided by supply and demand in a market
economy
 Government Responsibilities:
 federal and state governments can make laws regarding
social programs
 no legislation identifies responsibilities in this area.
Social Programs in the USA
 Healthcare
 publicly funded care is only accessible to low income citizens
 all other citizens must pay for health services or health insurance
individually (private health care)
 healthcare is like a business (for profit).
 Income Assistance (social security)
 citizens unable to meet their basic needs receive income
assistance (VERY LIMITED)
 supported through taxation
 Pensions and Senior Care
 seniors generally have to support themselves
Think about it…
 Why might the values that shape social
programs change over time?
 How are the American and Canadian
Health care programs different?
Taxation Programs
 Government collects taxes to pay for the services it
provides to its citizens.
 Taxation model –policy that guides a government in
deciding what to tax, how much, and how to spend tax $$.
 In Canada, both the federal and provincial governments
collect taxes.
Canadian citizens pay two kinds of
tax to the Federal government:
 Income Tax
 pay a percentage based on earnings - comes off your pay
check or the profit you claim when submitting your taxes
 the more you earn, the more you pay in taxes.
 Sales Taxes:
 tax paid at the time of buying a product or service
 a percentage of the total purchase – the more you spend, the
more you pay.
 Everyone in Canada pays the GST (goods and services tax).
All provinces (except Alberta) also have a PST (Provincial
Sales Tax).
What is the connection between
taxation and social programs?
 Social programs cost money! Where does the government
get this money? TAXATION!
 Taxation levels are established so as to meet the costs of
public sector needs. If public sector needs are increased or
decreased, such as in changes to social programs, the
taxation levels can be adjusted up or down accordingly.
Examine the pie charts on p. 282 of your textbook to discover
how money from taxation is spent in Canada.
The Canada Revenue Agency (CRA)
 Administers tax laws for the federal government and
for most provinces and territories
 Administers various social and economic benefit and
incentive programs delivered through the tax system
 Promotes compliance with Canada’s tax legislation and
regulations
 Plays an important role in the economic and social
well-being of Canadians by ensuring, as far as possible,
that all due taxes are declared and collected through
extensive audits
Tax and Revenue Administration
(TRA), Alberta Finance and
Enterprise
 Administers tax laws for the Alberta government
 Has four branches: Revenue Operations, Audit, Tax
Services, and Business Technology Management
 Visit the Alberta Finance and Enterprise website for
specific TRA responsibilities and functions.
Taxation reflects economic values
 Taxation models depend on economic values
 In general…
 Free Market System:


reduce taxes and allow business to flourish
spend tax $ on limited social programming and essential services
 Mixed System:


increase taxes and ensure appropriate level of corporate taxes to
pay for social services
ensure balance between private business and public good.
Did you know…
 Grade 9 students working part-time jobs generally
don’t pay income tax because they earn below the
minimum amount.
 In 2005, Canadian families paid, on average, 17% of
their income in taxes. If your family earned $67000
(median income), you would be taxed $11000.
Tax Evasion and Tax Avoidance
 When individuals avoid paying taxes (tax evasion)or
under report their income (tax avoidance), they are
limiting the funds available to a government to pay for
social services (tax base).
 Tax evasion and tax avoidance are against the law and
can have criminal consequences.
The Underground Economy
 Some people work in what is called the underground
economy– which means they are working without
paying taxes (“paying under the table”) or selling
goods that are not being taxed (“black market”)
 This reduces the tax base.
What effect will this type of economic activity have on the
quality of life of our citizens?
How does the underground economy impact
the federal and provincial tax base and social
programs?
 The government collects less tax $$  less money to
spend  may not be able to support social programs
 Canada’s Auditor General reported that tax
arrangements for foreign affiliates (through offshore
tax havens) have eroded Canadian tax revenues of
hundreds of millions of dollars over the past 10 years.
(individuals stockpiling profits and funds in banks
around the world).
For Homework…
 Define each of the following terms in your own words
and then provide an example.
 Goods and Services Tax (GST)
 Income Tax
 Median
 Sales Tax
 Black Market
 Tax Evasion
 Taxation Model
 Underground Economy
 Tax Base
Political Parties
 The Canada Elections Act defines a political party as
“an organization whose fundamental purpose is to
participate in public affairs by endorsing one or more
of its members as candidates and supporting their
election to the House of Commons.”
 Political parties develop a set of policies, known as
their platform, to attract voters and get their
candidates elected.
 Members of a political party must support and live up
to the party’s platform (“towing the party line”)
Political Platforms
 Political parties publically advertise their platforms so
voters are aware of what they stand for.
 Political platforms:
 identify which issues are of the greatest concern to that
party.
 explain what actions that party intends to take to resolve
the issues.
 indicate if the party wants more or less government
intervention.
What’s the connection between values,
policies and the economic continuum?
 Values shape both economic and social policies
 Value: The public good comes from cooperation 
Policies: government should be active in the economy and
provide extensive social programs  Taxation model:
high taxes to pay for social programs
 Value: Individuals are responsible for their own
well being  Policies: no government intervention in
economy or social programs  Taxation model: low
taxes due to extremely limited social programs
Learn alberta.ca
Left wing
Center
Right Wing
Left Wing
 more government involvement and ownership in the
economy
 increased taxes to pay for more extensive social
programming
 increased government spending on the people and
environment
 increased restriction on big business and economy.
Right Wing
 less government involvement and ownership in the
economy
 decreased taxes due to decreased government
spending on the people and environment
 decreased restriction on big business and economy
(incentives are often provided to influence economic
growth)
Centre
 primarily private ownership in the economy with some
government intervention and ownership of key
industries
 medium rates of taxation to pay for stable base of
social programming
 government balances restriction and incentive on
business.
Canadian Political Parties
 There are 5 major federal political parties in Canada:
Bloc Quebecois, Conservative Party of Canada, Green
Party of Canada, Liberal Party of Canada and New
Democratic Party of Canada
 Read through the information about each party’s
major issues and economic policies found on p. 287 –
290 of the textbook.
 Organize the information about the economic policies
in a chart.
Canadian Political Platforms
 Left Wing (Green, Bloc, NDP):
 citizens should be able to rely on their government for support during
difficult economic times.
 the government should protect its citizens socially and economically.
 Increased access to government services and argue for social change.
 COLLECTIVE GOOD
 Right Wing (Conservative):
 citizens should rely less on the government for their personal wellbeing
 the government should only protect the severely impoverished and all
others can and should take of themselves.
 reduced access to government services and try to maintain the status
quo.
 INDIVIDUAL RESPONSIBILITY
Canadian Political Platforms
 Centre (Liberal):
 citizens should be encouraged to achieve their personal
well-being on their own but have a social support system
in place to protect during times of need
 attempt to balance the status quo with social change
 What party best aligns with your beliefs? Complete
political spectrum quiz
Left
Right
American Political Parties
 The are 2 major federal political parties in the United
States: Democratic Party and Republican Party
 Read through the information about each party’s
major issues and economic policies found on p. 290 of
the textbook.
American Political Platforms
 Republican Party (Right wing):
 firm belief in private enterprise and limited government
intervention in the economy.
 cut government spending, lower taxes, and allow market and
consumers to solve economic, social, and environmental
issues (to an extent)
 strong traditionalist values – Catholic values and equal
opportunity for business
 Democratic Party (Centre/right):
 favors more government spending on social programs and less
likely to cut taxes
 more Liberal values and more open to change
Left
Right
 Complete worksheet “Personal Political Philosophy”
 Where does each party fit on the economic
conundrum?
 If these were Canadian parties, what party would they
be?
 Complete Government Decisions and Quality of Life
Assignment
Imagine you are a member of a federal political party in Canada. A
lobby group recently came to you with the proposal that the federal
government should create a social program that allows all
Canadians to attend university for free. Some questions need to be
addressed:
• How will the government pay for it?
• How will your constituents feel about this?
• What are some negative consequences
• What are some positive consequences?
Get together in groups of 5. Each group will be given a political
party that they must represent. Your “party” must decide how you
feel about this proposal and if you will support it or not. Remember
you must represent your party (tow the party line)
Chapter 8 Review Package

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