Canadian Government User Fees
Are Government User Fees a Form of Double Taxation?
Dateline: 06/18/00
The House of Commons Finance Committee says the current Canadian government policy of charging users for government services is inconsistent and poorly administered.
In its report "A Study for Cost Recovery," the Finance Committee says the user-charge and cost recovery policy itself is sound, but its implementation is not. The Committee says that in many cases the fees appear to be subsidizing other programs or contributing to general revenue, rather than being prices for services. The effect is a form of double taxation.
The cost recovery policy, which collects about $3.7 billion a year in user fees, was made a priority for federal government departments and agencies in 1994 at a time of government spending cutbacks in Canada. User fees were introduced on many government services and programs that had until then been free for users. The aim was partly to provide an alternate form of program funding, and partly to make government "more efficient."
Approximately 390 user fee programs are spread out over 47 departments and agencies. User fees are applied to services such as publications, admission to federal parks, passports, drug inspection and mandatory licences.
The Committee cited Auditor General reports of instances where department accounting systems do not provide the information on costs to justify the user fees charged.
The Committee provided three specific case studies in its review:
- user charges to drug manufacturers in the Therapeutic Products Program at Health Canada
- user fees in the agri-food sector
- marine service fees charged by the Canadian Coast Guard
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