Table 2:

Major options for generating public funding needed to implement pharmacare in 2020^*

Revenue source	Total revenues expected in 2020, without pharmacare, $ billions	Estimated amount of funding raised by a 1 percentage point increase in tax rate, $ billions	Pros and cons of tax instrument
Personal income taxes	175.2	7.7	Pros: large revenue base; progressive Cons: collects from households only
General and small business corporate income taxes	49.4	2.5	Pros: collects from corporations that will benefit from pharmacare; likely progressive Cons: potential issues with tax avoidance; strong business opposition
GST	40.6	7.9	Pros: simple to administer Cons: collects from households only; regressive; politically unpopular
Premiums	–	–	Pros: transparent Cons: collects from households only; regressive

Note: GST = Goods and Services Tax.

^*Authors’ calculations based on federal budget estimates and Parliamentary Budget Officer tools, including using the Social Policy Simulation Database and Model.^1,21