Thank you.
I'm sure you all know taxation has been studied by scholars and practitioners going back literally into the Middle Ages and going back to the government of England. It was the original instrument of government policies long before other, more sophisticated instruments came along.
Nobel prizes have been given in this subject. I'm going to summarize really quickly, and I think I'm fairly conveying the consensus of research in thousands of books and articles and so forth.
A tax increase is contractionary because, like interest rate increases, it takes money out of your pocket. A tax is defined as a “compulsory payment to government”. That's the OECD definition. Taxes raise costs. They don't reduce costs.
It doesn't matter what the motive is. We won't get into motive, whether it's because we're trying to reduce the use of carbon or we have some other alcohol taxes because we want to discourage alcohol. It doesn't matter what the reason is; when you put a tax increase through, it raises prices, and when you put a tax cut through, you cut prices.
In fact, I agree with Mr. Rabidoux about the tax cut for rental housing. That's going to be a game-changer for rental properties because it's going to reduce prices. It's not going to increase prices; it's going to reduce them, because they're reducing the tax. If such a tax was imposed on food prices in Canada, ceteris paribus, it would raise the price of food. The research, the literature and the empirical data on this are so crystal clear. I just can't explain it.