Harper's First Budget

Man oh man, considering he has a Minority government, Harper's budget is pretty scary. To be honest, it's not that bad. But it would be hard to be really nasty when faced with a huge federal surplus and three opposition parties eager to pull you down. In fact the only thing that kept him alive was a promise to look at the fiscal imbalance between the federal and provincial governments and eventually hand over both money and responsibilities to the provinces -- which was enough to earn the Bloc Quebecois' support.

He cut the GST by one percent. Which is actually a good thing -- sales tax unfairly penalize the poor because they spend most of the money they take in and thus pay a higher percentage of their income to sales taxes. However, he also raised the tax in the lowest income bracket by 0.5%. The corporate tax rate however was lowered
from 21% to 19%. And he did various peculiar things with stock and investment taxation that I'm pretty sure can't help anyone but the rich.

He cut the funding to the national daycare program, choosing instead to give it to parents directly. Thus helping out anybody who can afford a nanny and screwing everyone else in the butt.

There was ZERO new funding for health care.

He clawed back about 75% of the money that the Liberals had promised to Native Peoples after an 18 month negotiation that ended late last year.

He cut all the Liberals spending on Climate Change and instead gave a tax-break for people buying metropasses. This will cost $370 million and is estimated to increase public transit use from 10.5% of daily commutes to 11%. It is estimated to cost $2000 per tonne of greenhouse gas emmission reduction.

From the Toronto Star:

The federal government says the $370 million tax credit will come from money reallocated from funds previously dedicated to climate change programs.

Some have criticized the plan ... because it may create more demand for transit, but it doesn't add to the supply of buses, streetcars and subways. That means already crowded vehicles will simply get more crowded, critics say.

And the tax credit does not apply to transit riders who buy weekly passes, day passes, tickets, tokens, or who pay cash.

To pay for this he cut all the money to our climate change research institute. So if you're curious to know what's going to happen to Canada as the plannet gets hotter and hotter and hurricanes and another anomalous weather formations increase. Too bad. Will it have an effect on our forests? Who knows. Our lakes and rivers? Our wildlife? Our farming? The Tories don't give a shit.

Now think what he would do if he had a majority.


Blogger Malcolm said...

He wouldn't be so generous with a majority. How quickly they forget the deficit Mulroney left behind with that Conservative deep need to be loved?
Harpoville Post

1:10 a.m.  
Anonymous Anonymous said...

The issue is Harper's gameplan to substantially reduce the powers of the central government in Canada by devolving those powers on the provinces. If Harper is successful, Canada will become a balkanized nation of bickering premiers, with no common standards uniting Canadians as a nation, and with the Prime Minister sitting in the booth closest to the kitchen, with his hands tucked under his seat, doing nothing.

Harper and his New Tories aim at a massive transfer of power (legislative, financial) to the provinces, through a deal cut in smoky rooms, and over a policy which has not been tested by being debated vigorously during an election campaign. Harper is aiming at a stealth-change of how Canada functions, agreed to by premiers and him, without the voters of the provinces or the voters of Canada being involved in such a decision. It is akin to a Meech Lake Accord without requiring Canadians to vote on it.

Is this process of Harper's democractic? Not by a long shot.

Have Canadians agreed to these dramatic changes in the federal / provincial structure? Not by a long shot.

Will Harper open his dealings to public debate? Never – he does not agree with his decisions being debated by voter representatives.

Harper is aiming at making Ontario the "bad guy", and getting the other provinces to gang up on Ontario's Premier. He is hoping to stampede Ontario into agreeing to a deal, so that Harper can then go the country for an election, hoping to win more seats in Quebec and gain a majority government.

As Chantal Hebert wrote: "Nothing would do more to accelerate Harper's plan to emerge as the default federalist option in Quebec than a campaign that found the federal Liberals and the Bloc Québécois on the wrong side of a deal with Charest on the fiscal imbalance."

Harper's stampede tactics (similar to those used by Bush in his deceptive entry into the war in Iraq) have been successful so far – he suckered Duceppe and Layton into supporting a vote of no confidence in the Liberal government. If it worked once, why not try again?

What can Ontario's Premier, Dalton McGuinty, do given the by now obvious strategy of Harper?

Simple. He can take a stand on principle: that such decisions should be made by the people. McGuinty can make the whole backroom-dealing process transparent by simply stating right now that he requires two things to take place: (1) that all meetings of Premiers on this subject, and any meeting he has with Harper, be open to the public, and televised; and (2) that he will not agree to any deal unless it has been put to the voters of Ontario through a plebescite.

This will immediately make the whole process of nation-changing more democratic, put pressure on the Premiers of all provinces to consider voters as well and perhaps adopt similar plebescites, and relieve McGuinty of any pressure to rush into a deal "in the interests of Canada" (as John Tory has tried to frame it).

So, Dalton: strike a blow for democracy. Call for transparency in meetings of Premiers on this "backroom Meech Lake Deal", and have Ontario voters decide the issue.

2:04 p.m.  
Anonymous Anonymous said...

To Matteus Von Mustard

i was shocked when i read your suggestion that the GST cut is a good tax for the poor! Truly, your analysis must be an omen of the imminence of the apocalypse.

1) The GST does not penalize the poor. That's what the GST rebates are for. I, a student on scholarships, think i'm getting over $700 back next year for the 2005 tax year - that's $10,000 of spending GST free! Admittedly, it does penalize those who are not aware that they should do their taxes even if they don't need to. However, that is a tertiary effect when we are talking about tax policy in general.

2) Taxes, generally, do not penalize the poor. A tax that is bad for the poor is one where they pay out more money than they get back in services. Given that the vast majority of tax money goes directly to people in income-independent things like health-care and education, or indirectly via communal goods like the military and infrastructure, you'd have to be pretty close to the average amount taxed (in absolute terms), or higher, to be penalized by a tax. But let's say that as little as 50% of the taxes raised are returned to the populace in an income independent fashion - that means you break even if you are paying 50% of the average per capita tax raised, and are doing better if you pay less. Even without rebates, does the GST unfairly penalize the poor? Hell no. Spending *roughly* correlates with income (although the Colonel is of course right that lower income families spend more of their income). So, approximately, if you have an income of that below half the average, you are gaining from a sales tax.
So hey, what tax increase would penalize the poor? A couple examples from income tax: decreasing the personal exemption, and increasing the tax rate in the lowest bracket.

3) Let us also be careful to decouple the amount of tax we want in a country (say 29% of GDP in the US ranging all the way to 51% of GDP in Sweden) with the kinds of taxes (corporate, income, sales). The following Star article has an excellent discussion on Smart vs. Dumb Taxes: http://www.rotman.utoronto.ca/rogermartin/SmartTaxesvsDumbTaxes.pdf
Simply looking at a bunch of countries and their taxation levels, (heck, even intuitively), you can see that services provided (including help to the poor) correlates much more strongly with the level of taxation than the type of taxation.

Also, while i'm posting, let me briefly vent about the stupidity of the Conservative environmental policy: Climate change is the biggest problem we've got (and yes, i'm fully aware of the nuclear status of north korea and iran). Cutting, what was it, $5 billion? in spending on climate change is the dumbest thing that they could have done. And then to replace it with this bullshit transit policy?!? To put the $2000/CO2e ton number into perspective - you can buy a ton for ~$25 in europe.

This budget drove me crazy!

2:16 a.m.  
Blogger Matthew Lie - Paehlke said...

Ah Clarence Scorpus, as much as you are right, I must point out that this is a blog about the apocalypse and not taxation policy. I was merely observing in general terms that the left-wing favours income taxes over sales taxes and it was a somewhat unconservative move. Nonetheless your comments on taxes are both apt and ept and I thank you for them.

12:14 p.m.  

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