Government is always unfair to someone--it has to be.

• Author: Cirtwill, Charles
• Position: Think Tank

You win some, you lose some. This is the lesson Ontario small-business people have been reminded of over the past months in dealing with costs driven by decisions made by politicians.

First, we had the federal government deciding that it was going to increase taxes on (well, really reduce the exemption for) passive investment holdings inside a corporation.

There were howls of outrage from small businesses and small-business lobby groups (yes, doctors are, in Canada, largely small businesses).

At about the same time, we had the province of Ontario increasing the minimum wage with similar howls of outrage from the same small businesses and business groups.

On one hand, the public largely supported the small-business folks, and the federal government scaled back its proposed changes. On the other, minimum wage in Ontario is now $14 an hour and will rise to $15 next year. So, why the different outcomes?

Let's start with the basics.

As the anti-tax people are all too happy to explain, government can't do anything if it first doesn't take something away: namely, your money.

Unlike a private sector enterprise, government doesn't attract investment, create a product, and then sell it for proceeds that are then divided among workers, suppliers and investors.

It takes your money, by force of law and, yes, ultimately by threat of force.

That exercise is inherently unfair, at least to the person from whom the funds are taken.

As the pro-tax people are just as quick to point out, though, without taxes there are no services: no roads, no schools, no hospitals, no police, no fire, no subsidized day care, and no tax incentive to support people caring for elderly parents.

We can quibble about what services government should supply or fund and, boy, do we.

The point here is that both the pro- and anti-tax people are correct.

Without the initial unfairness of taking your money, government programs and services do not exist.

Government, therefore, by definition, has to be unfair to someone.

So, both the federal and provincial governments were doing their job when they decided to be "unfair" to small businesses.

The key is to hit the right balance between unfairness and service delivery. In the literature around public policy, there are any number of thoughtful analyses outlining how to do this.

For example, Dr. Paul Brown, a friend and mentor of mine...