Right on cue, they’re floating a GST hike.

This is a very bad idea, and not just because it would be political suicide.

In the next few weeks, Liberal Finance Minister Chrystia Freeland will present this year's federal budget. At a time when Canadians have been hit with the inflationary chaser that has followed years of deficit spending, lobby groups, economists, and academics are trying to get their $0.02 in before the budget in finalized.

On that front, the Globe and Mail's David Parkinson recently published an op-ed that called for Canadians to give $0.02 more on the dollar - literally - by calling on the Liberals to consider a 2% increase to the GST . This article honed in on one suggestion outlined in a thought piece released by the venerable C.D. Howe Institute; a shadow budget that outlined what the Institute's economists might do if they were in Freeland's shoes.

In his piece, Parkinson argues that including a 2% GST hike in this year’s federal budget could be an easy and lower-risk way to partially address the massive spending deficits the Liberals have been posting. He also contends a tax hike would serve to address some of the looming fiscal challenges presented by an increasingly elderly Baby Boom generation.

But this is a very, very bad idea - for several reasons.

Let's start with the obvious. Stories of indefensible waste of tax dollars have plagued Prime Minister Justin Trudeau's Liberal government throughout his time in office. Even the most vocal supporters of tax increases, who argue the premise that there isn’t enough funding for core government services, would have to agree that Canada’s Liberal government hasn’t been the wisest stewards of the country’s finances.  A story I uncovered a few weeks ago is one of the countless recent examples of billions of dollars that have been flushed down the toilet.

Arguing for a GST increase under a government that allows so much waste to happen, and that consistently denies that they need to do better on this front, is irresponsible.

Second, Canada is in the middle of an inflationary crisis. Our economy is teetering on the brink of recession after the Bank of Canada rapidly raised interest rates over the last few months. Increasing the general tax on consumption by 2% and adding another pressure to the economy when even the most seasoned economists are having trouble predicting what will happen in the short term would be foolhardy.

Third, the Liberal government has massively increased the federal government's size, scope, and cost, but service delivery has worsened. There are massive backlogs to process immigration applications. The Canada Revenue Agency said it wouldn't look into billions of dollars worth of ineligible disbursements. There were months-long backlogs to get passports. Canada's air and rail transportation systems are coming apart at the seams. The government is spending billions on infrastructure that never gets built, and if it does, it doesn't work. Billions are being spent on consultants.

Raising the GST and throwing more money at broken systems undermines the principle of value-for-money in taxation.

Fourth, because of all those reasons, raising the GST would justifiably anger many Canadians. Our country hasn't entirely healed from the social disruption and division caused by pandemic restrictions, and many Canadians are struggling to make ends meet. After being told for three years to trust the government and do their part, many Canadians have had enough. A 2% GST hike would be rubbing salt in an open wound.

In this day and age, academics, economists, and politicians who attempt to justify tax increases with a patronizing "we don't pay enough for what we get" message miss the mark. That's because that position is both simultaneously elitist and naive to the reality that the government in our country has become increasingly ineffectual. The public is constantly being asked to pay more but rarely sees an improvement in service delivery. And rarer still is a proposed tax hike preceded by concrete action to reduce government bloat and improve service delivery with existing funds.

But both Parkinson and the C.D. Howe Institute are right about one thing - the current financial path the federal Liberals are walking is unsustainable. 

But my $0.02 says that expecting Canadians to pay more for their low value for money status quo is wrong. And as the government begins its communications lead-up to federal budget, an increase to the GST is something that the Liberals should explicitly reject.