The Ford government is raking in $5 billion through the province’s health tax. The tax is charged on top of income taxes, so most Ontarians don’t even realize they’re paying it. Pictured: Ontario Premier Doug Ford. Photo Credit: Doug Ford/X.
There’s one statistic in Ontario budget that should raise the ire of taxpayers: a record amount of money going to government coffers through the health tax.
The Ford government is raking in $5 billion through the province’s health tax. The tax is charged on top of income taxes, so most Ontarians don’t even realize they’re paying it.
Ontario taxpayers are the only ones in Canada paying a health tax on top of provincial income taxes. And that tax burden is expected to rise from $5 billion this year to $5.4 billion by 2026.
Individual taxpayers are on the hook for an average $600 each per year. Anyone earning more than $20,000, pays the health tax. It’s phased in at $300 and rises to $900 for those with higher incomes.
It’s time for Ontario’s health tax to go.
Some might object that a health tax is needed, but the evidence shows otherwise.
First, when the government brings in revenue through the health tax, there is no requirement the money be spent on front-line health care. It can be spent on anything from infrastructure upgrades to public health research to “other programs” with very little oversight.
Second, every other province in Canada gets by without imposing a health tax on top of provincial income taxes. Health-care results are similar nationwide. If other provinces can fund their health-care systems without a punitive health tax, surely Ontario can too.
Third, Ontario’s health-care outcomes have gotten worse since the health tax was imposed by former premier Dalton McGunity decades ago.
Thirty years ago, the average Ontarian waited 9.2 weeks to see their family doctor and then get treated by a specialist. Thirty years later, Ontarians are waiting an average of 20.3 weeks.
Despite worsening outcomes, Ontario is spending more than ever on health care. The province now spends $2,500 more per person on health care than it did in 1993, after adjusting for inflation.
If the health tax was improving health-care outcomes, the numbers would be going in the opposite direction.
There’s no way to justify the health tax. Ontario continues to spend more and get less.
It’s time for the Ford government to scrap the health tax and fix health care through reform, not an avalanche of taxpayer cash.
Last year, Ontario spent more than $8 billion on health costs not related to front-line services.
Canada spends 10 times as much as Germany on health-care bureaucrats, despite the fact Germany has double Canada’s population.
If Ontario were to spend the same amount of money, adjusted for population, as Germany does on its health-care bureaucracy, the province would save billions and have plenty of room to put the health tax on the chopping block.
Ontarians are struggling. Half of Ontario taxpayers are $200 away from not being able to pay their bills. More than 400,000 Ontarians are working two jobs just to make ends meet.
Axing the health tax would save the average Ontario taxpayer $600 a year, money to pay for three weeks’ worth of groceries for a family of four.
While health-care reform should be on the table, Ontario could eliminate the health tax with just a tiny bit of fiscal restraint. Government spending is rising by $7.2 billion this year. Just holding the line on spending would allow the government to eliminate the health tax without growing the deficit.
It’s time for the health tax to go. Ontarians shouldn’t be on the hook for a gimmicky tax that taxpayers can ill afford and that no other province forces people to pay.
Jay Goldberg is the Ontario Director at the Canadian Taxpayers Federation. He previously served as a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
