Double Blind

The Speaker of the House of Commons, Peter Milliken, continues to run a Parliamentary clinic. He should have the respect of most Canadians; he is doing a terrific job in the most consecutive strings of minority governments Canada has seen.

His lengthy ruling on the production of papers concerning the Afghanistan detainees is well worth a read – essentially, the executive (government including the Prime Minister) is accountable to the legislative (House of Commons; Senate).

The argument the government was making (the papers in question posed a security risk if disclosed) is not sufficient; a motion of the House of Commons trumps the government. Of course, a motion like this would never have occurred in a majority government, where members of parliament are whipped into submission.

The government and legislative side (essentially the Bloc, NDP and Liberals) have to come to some sort of agreement in two weeks on how to view uncensored documents regarding the issue.

What will be particularly interesting is in two weeks’ time:

I will allow House leaders, ministers and party critics time to suggest some way of resolving the impasse, for it seems to me we would fail the institution if no resolution can be found. However, if in two weeks’ time, the matter is still not resolved, the Chair will return to make a statement on the motion that will be allowed in the circumstances.

I highly suspect that the opposition parties will not be able to come to an agreement with the government.

My guess is that the Speaker will have to make another ruling on this issue. Ultimately, if my understanding of House of Commons procedure is correct, this will likely mean the government will be in contempt of the House of Commons if they do not abide, and a loss of confidence should result, in theory, with a subsequent non-confidence motion (contempt is not sufficient for loss of confidence). The Governor General will then likely call an election on the advice of the Prime Minister.

This has a huge potential of going into constitutionally uncharted waters and it could get ugly.

I know about as much about the United Kingdom political scene as I do about Quebec politics, but I think Bernard’s analysis on the UK election is worthy of a read. It is from my understanding of their vote splits, however, that the Conservatives and Labour have many safe seats relative to the Liberal Democrats, and thus an equal amount of popular votes will translate into more Conservative and Labour seats than Liberal Democratic.

The choice of lotteries out there always involve negative statistical expectation, but people pay for skew and not expected value. People do this all the time when they purchase insurance, for example.

Very often people in an office will pool capital and spend the proceeds on a lottery.

The question is: Which lottery? I will isolate the definition to the lottery that gives the highest probability of delivering a main prize worth $1,000,000 or over.

The BC49 involves paying $1 for a 1:13,983,816 chance of winning a share of a prize that is guaranteed to be above $2 million.

The Lotto 6/49 involves paying $2 for a 1:13,983,816 chance of winning a share of a prize that is guaranteed to be above $3.5 million.

The Lotto MAX involves paying $5 for a 1:28,633,528 chance of winning a share of a prize that is roughly $10 million at a minimum.

Note the terminology: “a share of a prize” – in that if there are multiple winning tickets, your share of the main prize will be significantly lessened. Thus, it is critical that you choose numbers that others do not. The rest of this analysis assumes this is the case except when explicitly noted below.

The BC49 and Lotto 6/49 are very similar games. As such, if the Lotto 6/49′s main prize is above $4 million then it is always better to choose the Lotto 6/49. One mitigating circumstance is that the Lotto 6/49 is much more likely to share a main prize because it is a national lottery, compared to the relatively unplayed BC49 lottery – if the main prize is slightly over $4 million for the Lotto 6/49 you will likely have better statistical expectation with the BC49.

The other factor is that you can buy two tickets of BC49 compared to one ticket of Lotto 6/49. So to maximize your chances of winning $1,000,000; you would be best to choose BC49.

For an office pool, presumably the allure of a more relevant main prize would be with the Lotto 6/49. The trick is waiting for a sufficiently large prize pool to make it worthwhile – I would suggest waiting until a prize pool of least $28 million is available to maximize expectation.

Lotto MAX is a little more difficult to analyze, but the feature of this lottery is that if the prize pool goes above $50 million, there are million dollar prizes available which you also have a 1:28,633,528 chance winning in each instance. So for example, on February 26, 2010 and November 6, 2009 there was a $50 million main prize up for grabs, but also 10 draws for $1 million each.

A five dollar play in this instance would have a 1:2,603,048 chance of winning $1 million or over, which is roughly the expected value available for a Lotto 6/49 player paying $2 for the chances of winning a $29 million prize, but with the skew being such that your net probability of winning a 7-digit prize is about 5.4 times greater for 2.5 times the cost.

Without this $1 million bonus draw feature, the game itself is only worth playing over the 6/49 if its main prize pool is 5.12 times larger than the Lotto 6/49. (i.e. if the Lotto 6/49 estimated prize is $6 million, the Lotto MAX pool has to be $31 million or over to consider playing, even assuming you are not considering the BC49 for the higher chance of winning a million or over).

So my advice for lottery pool players:

1. It is absolutely essential you choose numbers that others do not.

2. Patience is your friend; do not play every draw and wait for the prize pools to grow sufficiently large, where “sufficiently large” we will define as being greater than $28 million for the 6/49, and $50 million for Lotto MAX.

3. If you MUST play every week, play the BC49 as long as the 6/49 prize pool is under (roughly) $6 million, which assumes the 6/49 jackpot will get split 50% of the time.

4. If the Lotto MAX jackpot is $50 million, consider playing that instead of the 6/49, especially if the 6/49 prize pool is under $10 million. If the 6/49 jackpot is over $10 million, then play that instead UNLESS if you are trying to have a better chance of winning a $1M prize, which in that case choose the Lotto MAX instead.

Lotteries are horrible games of chance simply because there are so many other alternatives that give you much higher chances of winning your desired pot of money. A really simple example would be a single-zero roulette wheel (1-36 and 0); if you put money on a single number and the desired number comes up, you will be paid out 35:1 (i.e. a $1 winning bet would be transformed into a $35 profit plus the $1 bet); if you took $5 and parlayed it four times successfully (and found a casino willing to take the risk in question), you would be $8.4 million dollars richer, but your risk taken would be 1:1,874,161, considerably much better than any of the options above. If your goal was to make exactly $1,000,000, then you would take your $5 and parlay it three times, earning $233,280, at an odds of 1:50,653. You would then structure your $233,280 into 8 equal bets of $29,160 and at this point have at least a 19.7% chance of winning $1,000,000 (for a combined probability of 1:257,340 of winning $1 million playing single-zero roulette from a $5 initial bet).

As you can see, lotteries are horrible at returning money to their customers compared to other games of chance.

There is an article in the UK that describes a family with 8 young children, and the husband quitting his job because the benefits they get from the government are higher. Their take-in is about £815/week which is about £42,380/year, or about CAD$65,100 using current exchange rates.

I do not know whether the numbers are correct, and I highly suspect the article is designed to be inflammatory. I also have no idea what specific social benefits are available in the United Kingdom.

However, I have pondered what somebody in Canada or British Columbia could get if their goal is to minimize work and live off the government. I can’t think of a situation implied like the above article where you effectively have an over 100% marginal tax rate for working. There are situations that come close. There are hypothetical scenarios if your job in life is to maximize government benefits. Note the majority of these use the most current up-to-date 2010 figures, but some 2009 figures may have inadvertently slipped into the following calculations:

1. Assume you have 1 child. This will qualify you for a lot of benefits. It’s also usually better, for government benefits purposes, that you are single as having a significant other making money seriously impairs your ability the claim the benefits discussed below. If you do desire a significant other, do not marry them and live in separate accommodations will maximize the ability to obtain benefits (for you and them!). Having two children will decrease the marginal benefits received compared to having one child.

2. Earn $21,816 in the year. This will qualify you for the following PROVINCIAL benefits:
– Full MSP assistance (free for those under $22,000/year, a $1,224/year annual benefit). I am also assuming no benefit with respect to Pharmacare (which has a lower deductible for lower income individuals).
– Starting July 1, 2010, the BC HST credit (for a family under $25,000/year, a $230/year annual benefit plus $230 for dependent)
– Climate Action Dividend (for a family under $35,843/year, a $105/year benefit, plus $105/year for first child)
– BC Tax reduction credit, essentially a non-refundable reduction in the income tax rate for low income individuals (for $17,354/year, $390/year benefit, reducing by 3.2% above the limit, so in this specific example, $247.22/year benefit)
– BC Child Care Subsidy; while the requirements to qualify are not specific (they do not give a monetary threshold) this would qualify for up to a $750/month ($9000/year) subsidy for early child care. I am not factoring this in to any future calculations in this post.

You will make too much money and miss out on:
– BC Sales tax credit (for a family under $18,000/year, $75/year annual benefit, reducing by 2% above the limit) – I believe this might be phased out with the BC HST credit.

3. A $21,816 income will qualify you for the following FEDERAL benefits:
– Assuming you were working at $21,816/year before having the baby, 50 weeks of Employment Insurance benefits of $230.75/week, or $11,537/year.
– The child will enable you to receive the $100/month Universal Child Care Benefit (UCCB), which is $1,200/year until the child turns 6 years old.
– Federal GST/HST credit (up to $32,506/year income, annual credit amount $631/year with the child)
– Working Income Tax Benefit (WTIB), which is complicated to explain the actual calculation in a sentence, but for a single mother of one child making $21,816/year, works out to a refundable tax credit of $751.28/year.
– Canada Child Tax Benefit and National Child Benefit Supplement and BC Earned Income Benefit – under $23,855/year income, the benefit is $3,528.84/year.
– Canada Learning Bond (CLB), which if you open up an RESP for your child (not frequently done I am sure) will result in a $525 benefit in the RESP immediately, plus $100/year providing you qualify for the National Child Benefit Supplement.

4. Live in social housing or get rental assistance. Although it was difficult to find exact numbers to work with, apparently you can get rental assistance that will net out your rental balance to 30% of your net income. This is also why it is important to keep your income relatively low if your job is to maximize government benefits. If you earn $21,816/year, this will result in an effective rental rate of $545.40/month, which is significantly under market in Vancouver. I am going to take a gross approximation and assume $1,000/mo for a 2-bedroom apartment somewhere in Greater Vancouver which would be a subsidy of approximately $455/mo or $5,460/year.

You add all of this together and get the following results:
a. Excluding EI (which you can claim a credible argument for having paid into the program by virtue of being employed), you will receive approximately $8,252.34/year of either cash payments or payments that are otherwise mandatory that you will not be required to pay; this does not include social housing benefits, and I am excluding the RESP boost since almost nobody will be taking this option.
b. With social housing, that goes up to approximately $13,712/year.

So somebody earning $21,816/year (note: this is about $10.50/hour, full-time 40 hours/week) with a child will be receiving a subsidy of about $13,712.34. This is about 63% of their existing income level. In terms of their income statement, it would be this:

Salary – $21,816
Minus: CPP – $907
Minus: EI – $377
Minus: Income taxes – $0 (none; the child vastly increases the tax credit amounts available to the parent, plus provincial taxes are reduced to zero by the BC Tax Reduction Credit)
Net cash from work: $20,532

Add all of the following:
BC HST Credit: $460
BC Climate Action: $210
UCCB: $1200
GST/HST: $631
WTIB: $751
CCTB and supplement: $3529

Net cash after benefits: $27,313

Minus rent: $6545 (30% of income, assumed to be the “salary” in this case)

Net: $20,768

This is a good sum of money after taxes and rental. Looking at my own personal budget, assuming I had the appropriate rental subsidy as #4 above, I would actually be pulling in a mild surplus. The only real difficulty is the ability to maintain work while taking care of the child at the same time (not easy!).

Now, let’s assume that you earned $35,000/year ($16.83/hour for a 40 hour/week full-time job) as a single parent. This is the most you can earn and still be eligible for social housing benefits. This is how the math would work out:

Salary – $35,000
Minus: CPP – $1559
Minus: EI – $606
Minus: Income Taxes – $1968
Net cash from work: $30,867

We now factor in the benefits:

Minus: MSP – $1224
Add: BC Climate Action – $210
Add: UCCB – $1200
Add: GST/HST – $506
Add: CCTB and supplement – $2185

Net cash after benefits: $33,744

Minus rent: $10,500 (30% of income, assumed to be the “salary” in this case)

Net: $23,244

The difference in earning $13,184 in more pre-tax income will translate into approximately $2,476 in disposable cash after housing rental payments. While the effective marginal tax rate in these circumstances is below 100%, it is quite high (81%).

The quick conclusion that I have is that there is high level of incentive to work part-time if you are in a middle-wage job if you are single and with a child. For example, if you are working in a clerical type job with a moderate amount of experience, the cost of having to stay at home one, two or even three days a week without pay is not that financially punishing because the government subsidies significantly make up the shortfall. Especially when you net this out with the cost of childcare, it is easy to see how people in BC that value their time more than their money would purposefully keep their income levels below the specified thresholds in order to maximize their government benefits.

Paul Hillsdon wrote some detailed analysis which I mostly agree with – light rail down Broadway is not a good solution and speed matters – which is the big selling point of Skytrain vs. other solutions.

The “status quo” bus (99-B Line) has pretty much reached saturation. The last operational innovation to increase capacity was allowing passengers to enter the bus through the exit doors, but pretty much at this point stacking buses will not be doing much good.

Light rail down Broadway will be useless because it will offer very little time savings and also consume a significant portion of road, which is not going to be a viable solution. In addition, while not as expensive as the Skytrain option, it will be significant.

I think it is more likely they will extend Skytrain west down Broadway from VCC until Granville Street (plus the connection to the Canada Line station on Cambie at Vancouver City Hall), but the real political difficulty is the method of construction. Cut-and-cover is going to be the most cost-effective method of construction, but because of the huge shutdown on Broadway street that would result, it is probably the biggest detriment to the project beginning in the first place.

I have no idea what happened to the lawsuit with the Cambie Street merchants, but the result of this will be material in terms of a future decision to expand Skytrain through the urban center.

The line would likely be extended all the way across Broadway and eventually to UBC at some future date, but we are likely talking a generation from now. I do not see an extension to UBC happening for at least a decade.

It is also likely that the Evergreen Line will be higher up on the capital funding list (for both technical and political reasons), and considering the province’s fiscal situation is a complete mess, it is unlikely they will be pouring too many dollars into rapid transit in Vancouver City in the near future.

The success of the Canada Line (I was proclaiming its virtues back when I rode it on opening day and saying it would be up to capacity far earlier than expected – quite contrary to the naysayers that criticized ridership numbers required for the P3 contract used to fund part of the line) clearly demonstrates there is huge demand for rapid transit in the urbanized areas of the Lower Mainland. I also have said that every expansion of the rapid transit network makes the rest of the network more valuable through the network effect. These infrastructure dollars are much better spent on rapid transit than on light rail, which I do not consider to be “rapid”.

Ultimately if the goal is to get people out of their cars, they must be given an alternative that respects their time – paying $3.10/trip from Richmond to downtown Vancouver in half an hour is worthwhile since you can’t do that in your automobile during daylight hours, but secondly parking downtown is a pain in the rear end. Broadway street is congested enough that such a rapid transit line should attract plenty of customers, especially between Main and Granville.

The length of track would be roughly 4.5 kilometers, but this would be a very expensive 4.5 kilometers – I’m guessing it probably would be around $800 million and involve a bit of political risk.

The other project on the books from the rapid transit plan is an expansion of the Expo Line’s capacity, which is needed. Anybody that has tried to get southeast from Main Street-Science World or Stadium at 4pm will know this – nothing ruins the public acceptance of public transit more than a fear of safety, but a close second is filled-to-capacity buses and trains that you can’t get on during the scheduled stop time. In addition to being fast, a transit system must be reliable.

Lately, I have been doing my training outdoors. Although my schedule has been quite disrupted ever since the baby was born, I have been able to get out a minimum of twice a week.

Yesterday, however, something bad happened for the first time – I tripped while running and fell to the gravel ground quite heavily. The road that I was running on was an uneven gravel surface, and I’m guessing I just tripped on a rock outcropping and lost balance and fell. It all happened very quickly, although I do recall getting in one “stumble” before I then completely lost balance and fell on my right side. As a result, I injured my right elbow and arm, and palm, although my elbow took the most damage. My left palm has a minor scrape. It was all scrapes and blood (a decent amount of blood out of the elbow) and no broken bones, but still, I can’t lean my right elbow against the car armrest because it will get all bloodied up and hurts. The pain is not extreme, but it certainly is present.

This happened during a planned 30 minute run, and I was 14 minutes out when this happened. After assessing myself and brushing off what dirt and pebbles that were caught up in the wound and trying to make sure it doesn’t infect, I had to run back home to get underneath the shower where I could do a more thorough job cleaning up the wound. I wonder what people thought when they saw the line of blood that streaked from my elbow to wrist while I tried to get back home as quickly as possible.

The advice I would have for all joggers is – be really careful on uneven gravel roads! I intend to steer clear from them in the future.

I had written earlier about how useless anti-virus software is. I claimed back then it was worse than useless:

Unfortunately for these people, this software is useless. In fact, it is worse than useless – it misleads the user into a false sense of security that their system is actually secure when it is not. Secondly, people that have anti-virus software installed take a huge performance hit as most software is usually not designed with performance in mind. McAfee and Symantec (Norton) are also two other branded copies that virtually do the same nothing when it comes to “virus protection”.

Imagine my hilarious reaction when hearing that a McAfee virus scanner update wipes out the svchost.exe which is a critical executable in Windows. I’m guessing the new virus definition file flagged some code in svchost.exe to have a “virus”, and the rules-based system deletes the file.

Even in the one and a half years that have passed since I wrote the previous article, viruses have been becoming much more sophisticated in obfuscation and concealment. The hackers are clearly winning the cat-and-mouse game with casual computer users that click on nearly anything they see on the screen.

I still do not have a virus scanner, nor do I think it is necessary. Once in a blue moon I do a thorough check of device-level drivers and startup executables and monitoring my network feed (and making sure nothing connects when I don’t have anything running), but I have still been running virus-free for ages now.

People will use this as an excuse to advocate the Mac vs. Windows, but this has nothing to do with the operating system – Mac virus exploits will become more prevalent as MacOSX continues to be adopted. It would not surprise me in the least that somebody has a software library built up that is not available in the public domain and instead is sold to organizations that have an economic interesting in controlling other people’s computers through botnets and the like.

Any popular piece of software, whether on the computer or embedded, will be vulnerable to attack. Even Google is facing issues with its own security.

I think the wake-up call was when the Half-Life 2 source code was leaked to the internet – if a major development firm could have the source code to their flagship product leaked to the internet, it makes you wonder what other forms of industrial espionage are happening that never make it to the media.

Probably the only valid advice I can give to anybody is the Battlestar Galactica credo of “no networked computers on board”. Ironically, there might be a time where pulling the network plug might be the only viable option.

It’s pretty easy to tell whether the opposition parties think they have an issue by looking at the first question asked in question period. Lately, they have been having a romp in the Rahim Jaffer / Helena Guergis category.

I’m guessing the Liberals think this is the equivalent of the Conservative sponsorship scandal, but the problem for the Liberals is that it isn’t. The sponsorship scandal infected a major part of the inner Liberal party ranks, especially in the province of Quebec, and infected the government mechanism itself. Jaffer/Guergis appears to be a two man outfit, and Harper appears to have completely cleansed himself from the matter by kicking Guergis out of caucus, and likely will not be signing her nomination papers for the next election unless if she gets fully exonerated from a respected third party.

There is no political traction whatsoever to be had on this issue. The only reason why it is making the Canadian airwaves is because there isn’t anything else remotely scandalous – if Jaffer/Guergis was not the topic of the day, it would be the Afghanstan detainee issue, which is another issue which will not be swaying too many votes in the next election.

Very wise is Jack Layton of the NDP, who asked a question about the families of veterans that have died in Afganistan, not paying attention to the issue. I bet you he is paying very close attention to the Liberal Democrats in the United Kingdom and thinking of how he can put himself in the Nick Clegg position of being a third-party that can catapult his way into political relevancy.

The only foreseeable issue that can pull down the Conservative government is a sex or corruption scandal that either implicates the Prime Minister or where Prime Minister Stephen Harper could have reasonably prevented. There has been nothing remotely like this – the only sex scandal of any significance was with Maxime Bernier (who was kicked out of cabinet for the quickest and most reasonable excuse possible), and the Jaffer/Guergis case hints of corruption (i.e. Jaffer trying to influence peddle after he lost his election), but clearly the corruption did not infect the PMO level.

I think the Conservative Party will come out of this stronger with this dirty laundry aired out, just as how it was made stronger with Belinda Stronach outed (even though they had no clue of it at the time).

The next rule of the day for media is “Don’t allow your readers to contradict your story.”

I found a left-wing UK story that had a sensationalist headline of “The image Microsoft doesn’t want you to see: Too tired to stay awake, the Chinese workers earning just 34p an hour”.

In the story is a picture (that looked like it was snapped from somebody’s cell phone) featuring a bunch of workers, slumped on their desks with their heads buried in their arms, surrounded by packages of Microsoft mice and other peripherals.

The article then goes on to describe horrible a working environment and low pay, etc.

The intent of the article was obvious – putting in a shock image of people “too tired to work”, and then describing what horrible working conditions are prevalent in China. The target of your sympathy is the exploited Chinese labourer, while the target of your aggression is either Microsoft (the employer) or outsourced work in factories in general.

The most interesting part of the article was the comments, of which seemed to have the most credibility the following (which corresponds to my knowledge of Chinese culture):

This article attempts to spin the common Chinese practice of sleeping on breaks, lunch, and during the day at virtually any job in China. I am a US citizen who has been living and working in China the past two years and am intimately familiar with this practice. As with any news story, be sure to read between the lines, because clearly the author of this story did not; or worse, did, and is attempting to manipulate the hearts and minds of a Western audience who are unfamiliar with Asian cultures.

- NanjingGuy, Nanjing, China, 18/4/2010 1:08

The following comment appears to have specialized knowledge of the local area, and also knowledge of labour practices:

The minimum wage in Dongguan IS 770rmb per month.
I visit dozens of factories each year in China and have NEVER in 12 years here been to a factory that does not have a 1.5 hour break at lunch time and at leat an hours break for dinner after which volentary overtime commences.
Dormitory accomodation is basic but my dormitory in London in the 70′s was hardly any better.
Migrant workers go from the villages to the cities because there there is work at a vastly higher rate than that in the rural area’s.
Dongguan local labour authorities will have visited this and all of the other factories in the area and they are quite strict with factories that do not apply locla regulations reagrding wages, holiday pay, food and breaks etc.
Scaremongering beyond belief in this article.

- david anderson, hong kong, china, 17/4/2010 1:03

Going back to my media rule, the reason why big media lately is getting rid of the ability to post comments are two-fold: One is because they tend to be populated mainly by trolls (just look at most comments generated on the Globe and Mail whenever you have a Canadian political figure as part of the news story) that add zero value to the story. The second reason is more insidious – if you are trying to create a narrative based on false or very loose facts, you don’t want people to realize how weak your argument is.

Certainly anybody reading the article linked above, assuming they read the above comments, would take away the main part of the story with much more skepticism than had they not.

In the day of the internet, it is very difficult to have a large story without some form of scrutiny – even silly email chains can be checked up on places like Snopes, which generally is considered to be a fairly reliable “fact checker”. If you are going to write a story, it has to withstand most scrutiny.

There are heavy rumours that the USA will introduce a federal sales tax. It would be political suicide if they did so, but politicians have been rumoured to say there will be income tax reductions in conjunction with the introduction of a sales tax. There was an article that explained that once an excise tax is introduced that it will keep on going up, without a reduction in income taxation.

Canada is the only example on the planet where the sales tax has been reduced – the Harper government decreased the GST from 7% to 5%.

The USA does not currently have a federal sales tax.

What is also interesting is the table in the article is somewhat incorrect – the maximum income tax rate computed for Canada is assuming you live in Ontario – the top federal tax bracket is 29%. Provincially it ranges from 10% (Alberta) to 21% (Nova Scotia).

In the USA, the state income tax rates range from 0% (Washington State, Alaska, Florida, Nevada, South Dakota, Texas, Wyoming) to 11% in Oregon and Hawaii. Oregon, however, has no state sales tax.

If there was a credible way of removing income taxes and shifting it entirely onto excise taxes, I would be in favour of it. For one thing, people would no longer have to file their income tax returns by every April 30th, an act which I consider to be excessively burdensome and costly for the majority of the public. However, eliminating income taxation in exchange for excise taxation has practically been proven to be impossible since politicians would like to collect taxes from both sources.

Another real-life example of a failed attempt to replace income taxation with excise taxation will be BC’s “revenue-neutral carbon tax”. It claims to link carbon taxes to reductions in income taxes, but they are two independent decisions. And the moment that the BC Liberals get un-elected out of office, you can be sure the NDP will be re-allocating the tax into spending decisions, hence completely breaking the “revenue-neutral” aspect of the tax (which was a fiction to begin with).

This is why I am rather happy with the federal government’s decision to reduce the GST from 7% to 5%. While it was criticized by most economist-types for being “inefficient” (because income taxation could have been dropped instead), I can materially state that it has done just a good a job of putting money back in my pocket every time I pay for anything.

For the 2010-2011 fiscal year, the federal government is expected to raise $27.3 billion through the 5% GST. Assuming the level of tax collections maintain the same if you increased the tax (which is a very incorrect assumption) you could eliminate the federal income tax ($117 billion) with a 21.4% GST.

To make this slightly less “draconian”, the “other excise taxes/duties” column is $10.3 billion, and the customs import duties is $3.4 billion. So if you uniformly increased all of them by the same amount, you could eliminate the personal income taxes by increasing those forms of taxation by a factor of 2.85 times, which would imply a federal GST rate of about 14.3%.

It would be a very interesting result in a referendum if the Canadian public were asked “Would you support an increase of the GST, customs import duties and other excise taxes by 2.85 times, in exchange of the elimination of the personal income tax?”.

I, for one, would vote yes.

Note that first-world countries that do not have income taxes are exceedingly rare; the Cayman Islands, for example, charges a 20% import tax on nearly anything brought into the island. They can presumably enforce this by virtue of their geography. I am not sure how much smuggling would increase in the event of an increase in Canadian excise taxation – cross-border shopping will become even more in vogue than it is today if domestic sales taxes increased.