Canadians celebrate Government Freedom Day on August 20
Contact:
Laura Jones, Director of Environment and Regulatory Studies
The Fraser Institute, Tel: (604) 714-4547
Email: lauraj@fraserinstitute.caJoel Emes, Senior Research Economist
The Fraser Institute, (604) 714-4546
Email: joele@fraserinstitute.ca
Release date: 17 August 2001
VANCOUVER, BC— When the cost of complying with government regulation is added to the amount of taxes paid to federal, provincial, and local governments, Canadians don't start working for themselves until August 20, according to The Fraser Institute's new annual calculation "Government Freedom Day" announced today.
On June 29 this year Canadians celebrated Tax Freedom Day and finished paying their tax bills. But governments have another way of accomplishing their objectives: through regulation. Complying with federal, provincial, and local regulation adds an additional fifty-four days to Tax Freedom Day, which means Canadians are truly free from government on August 20. All money earned prior to this day goes to pay for taxes or complying with regulation.
The Institute decided to calculate Government Freedom Day in order to raise awareness about how regulations affect people's pocketbooks and to give Canadians a better sense of the total cost of government activity.
"Unlike taxation, the cost of regulation is largely hidden. Most of the costs don't appear in government budgets but are passed on to businesses and consumers. These compliance costs affect our pocketbooks as surely as taxes do. But there is a lot less government accountability when it comes to regulation. We would like to change that," says Laura Jones, the Institute's director of environment and regulatory studies.
In a study released last week, Canada's Regulatory Burden: How Many Regulations? At What Cost?, The Fraser Institute estimated Canadians spend $103 billion (12% of GDP) to comply annually with federal, provincial, and municipal regulations.
Government Freedom Day is not intended to measure the benefits that Canadians receive from governments in return for their taxes and regulatory activities. Rather, it looks at the price that is paid for a product – government.
The calculation does not look at the quality of the product, how much of it each of us receives, or whether we get our money's worth.
Methodology
Data on the administrative cost of government regulation were provided to the Institute by Statistics Canada. These data were used to estimate the compliance costs of regulation. To calculate Government Freedom Day, these compliance costs were then added to the total tax burden used for the Tax Freedom Day calculation.
Tax Freedom Day is calculated on the Fraser Institute's Canadian Tax Simulator (CANTASIM).
Established in 1974, The Fraser Institute is an independent public policy organization based in Vancouver, with offices in Calgary and Toronto.