I really do strongly believe in a pay-for-preference tax system, blended with compulsory taxes. I wish that people wouldn't think that this idea is so radical, because I think it could be the best way to balance "big government" (ah, conservative catchphrases!) with the individual "right" to decide how taxpayer money is dispersed.
For example, everyone would be required to contribute a compulsory amount to certain services (i.e., Health Care, Public Works and Government Services, and et cetera). However, the remainder of one's tax contribution (while still mandatory) would be directed to particular services or features of government at the discretion of the individual taxpayer. This would require government departments to make their case to the people on why their hard-earned dollars are needed. So, I (as an individual) could choose to contribute the remainder of my taxes to the Canada Space Agency, and the Department of Canadian Heritage (because those are programs I strongly believe in), and someone else could decide that they'd prefer to contribute to something else.
I think that departments would then be required to really figure out what services their citizens want and need. Not only would this make democracy much more interesting and engaging ("democracy-by-dollars", heh), but it would ensure that the direction of the federal government (as an institution and a bureaucracy) would be much more in line with what the people of this country are actually looking for.