Inkless Wells

Inkless Wells

Paul Wells on all the latest out of Ottawa—along with the occasional post about jazz. Follow Paul on Twitter: @InklessPW
He also offers his thoughtful perspective of Stephen Harper’s last 10 years in his recent eBook, The Harper Decade.

Budget election showdown '11

by Paul Wells on Thursday, December 30, 2010 1:35pm - 171 Comments

As if on cue, this showed up in the Inkless Emailbox today:

Liberals call on NDP to stand against additional unaffordable Conservative corporate tax breaks

OTTAWA – As Finance Minister Jim Flaherty makes pre-budget overtures to the NDP, Liberal MPs today called on the NDP to demand the cancellation of Conservative corporate tax breaks at a time of deficit in favour of easing the economic pressures on average Canadian families.

“Choosing families over large corporations is a matter of principle that the NDP can’t barter away,” said Liberal Public Works Critic Geoff Regan. “We’re calling on the NDP to take a principled stand against billions in more corporate tax giveaways during a time of deficit – money that would be better directed towards relieving the burden on middle-class families.”…

“We’re disappointed that the Conservatives ignored our advice to stop borrowing money to cut taxes for our largest corporations,” said Mr. Regan. “Now it falls to the NDP to take a principled stand in favour of middle-class families by refusing to support the Conservatives’ unaffordable corporate tax cut plan.”

Me again. Wells. As I said, it’s as if on cue: as if the Liberals had decided there’s no point voting against the budget if the NDP simply pulls a Layton Fall ’09. Wherever could the Liberals have got that idea? Hmm.

The NDP is, of course, ill-disposed to take advice from Geoff Regan. On the Twitter machine, NDP spokesman George Soule told me his party “won’t be taking any lessons on ‘principled stands’ from the Liberals.” So the trash talking is well begun.

As always, the Conservatives need only one dance partner. So the Liberals could get cold feet, or the NDP could pull a Layton Fall ’09 — or the Bloc could be paid a little HST-harmonization hush money or stadium sweetener. But the optics of a Harper government surviving thanks to the Bloc are a little more delicate these days than they have sometimes been in the past. Let the dance begin.

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  • http://myblahg.com Robert McClelland

    Have the Liberals ever come out on top when they've tried this type of nonsense in the past? I can't recall any instance where they did.

    • Crit_Reasoning

      Nor can I. In recent history, this sort of Liberal bravado and bluster usually ends with either a pratfall or a humiliating stand-down.

      "We cannot support this government any further. After four years of drift, four years of denial, four years of division, four years of discord, Mr. Harper, your time is up."
      –Michael Ignatieff, September 2009

      • Geiseric

        Curious. How many non-confidence votes have the Liberals backed down on since then?

        • Crit_Reasoning

          I'm not sure. With regards to the statement above, Ignatieff backed down a month later, saying stuff like this:

          “We’ve said clearly we won’t support the government but, at the same time, we won’t try to defeat the government each time"

          "We’re not trying to create opportunities to trigger an election. Canadians have clearly said they don’t want an election, and they haven’t just said that to me, they’ve told that to all the parties, and we have to respect what the Canadian voters think.”
          <a href="http://www.nationalpost.com/news/story.html?id=2124109#ixzz19d2vhjWr

          ” target=”_blank”>http://www.nationalpost.com/news/story.html?id=2124109#ixzz19d2vhjWr

          • Geiseric

            Forgive me then for thinking that actions speak louder than words.

    • Anon Liberal

      Gun registry vote.

      • sourstud

        Was not a confidence vote.

  • http://secondthots.blogspot.com Dennis_F

    Haven't the Liberals been supporters of corporate tax cuts in the past, including the ones they now say they're against? And, if that's true, how is their position now principled?

    In addition, is it just me, or does there seem to be a childish tone to so much of the communication that comes out of Ottawa theses days? And I'm not just talking about the parties, either. The media (not including Wells here) seems to be as guilty, and maybe even set the tone to begin with.

    It doesn't seem to be the same in the States, for example. I don't get the sense that people in Washington are always yelling "nyah nyah" at each other. Again, maybe that's just me.

    • http://myblahg.com Robert McClelland

      Haven't the Liberals been supporters of corporate tax cuts in the past, including the ones they now say they're against?

      Yes.

      Liberal Leader Stéphane Dion flatly rejected forming a coalition government with the New Democrats today on the heels of hints from NDP Leader Jack Layton that he'd be open to the idea.
      Mr. Dion, speaking after an address to a Vancouver-area business crowd today, said he could not work with Mr. Layton in this way because the NDP leader wants to hike taxes on business.
      “We cannot have a coalition with a party that has a platform that would be damaging for the economy. Period,” the Liberal leader said.

      Dion was referring to the NDP wanting to reverse the corporate tax cuts.

    • Jan

      You need to watch more Jon Stewart, Dennis.

      • http://secondthots.blogspot.com Dennis_F

        As always, Jan, thanks for the "nyah nyah." lol. Next.

    • Anon Liberal

      I know this is difficult for idealogues to comprehend but rational people (and parties) sometimes change their positions when the FACTS change. For instance: years of surpluses = tax cuts, $50+billion deficit and years more of deficits to come = cancellation of additional corportae income taxes.

      It,s not a lack of principle that lead to the change of position. It`s one principle (let`s not impoverish our children with debt) overiding a different principle (it`s nice to keep taxes as low as possible).

      Nunace. I know, I know…you guys struggle with this.

      • http://secondthots.blogspot.com Dennis_F

        You always have to love it when a person states they're right because everyone else is too stupid to understand his point. Hey, I guess that's "nuance" at work, isn't it? lol

        The Liberals were adamant about tax cuts during the financial meltdown. All the things you say happened would have happened regardless of who was in government. Yet the Liberals once believe in the "principle" that tax cuts are good in tough times. Now they don't. Or is that a kind of "nuance" that's you're not accustomed to? lol

        • Anon Liberal

          “The Liberals were adamant about tax cuts during the financial meltdown. All the things you say happened would have happened regardless of who was in government. Yet the Liberals once believe in the "principle" that tax cuts are good in tough times. Now they don't. Or is that a kind of "nuance" that's you're not accustomed to? lol“

          Dion's position on tax cuts was elaborated during the 2008 election campaign as the economic meltdown was taking place (the one Harper and Flaherty were in denial about) and BEFORE the full impact of the crisis – and the effects on our public finances – were clear. As the facts emerged, the LIberal position changed. Completeley appropriately as I have argued.

          SOME tax cuts may make sense during tough times, for example cutting EI/payroll taxes to encourage hiring (the Cons are doing the exact opposite) but the corportae tax cuts are clearly unecessary since Canada's rates are already very competitive. Leaving you guys in charge of the finance dept is f-ing dangerous. Go “lol“ over that genius.

          • http://secondthots.blogspot.com Dennis_F

            Then why did it take Ignatieff 18 months to change the Liberal position? Stop pissing on us while insisting it's only rain.

          • Anon Liberal

            Perhaps because unlike Herr Harper more than one person's opinion counts in the Liberal Party and it takes some time for a consensus to emerge.

            Good Judge Judy impression though.

          • http://secondthots.blogspot.com Dennis_F

            Keep pissing, dude.

          • hollinm

            Anon Liberal why don't you head back to the Liblogs where you can shoot off your mouth and keep talking nonsense. Herr Harper….get a life buddy.

        • Anon Liberal

          “You always have to love it when a person states they're right because everyone else is too stupid to understand his point.“

          I would respond if that made the slightest sense. Try again, with grammar this time.

          • http://secondthots.blogspot.com Dennis_F

            You incredibly accused others of not understanding "nuance" simply because they don't agree with you. You're treating others as though they're stupider than you by default. That's not argumentation. Got it? Or too nuanced again? lol

          • Anon Liberal

            Ah, let me amend my statement so it's cleare then. YOU seem to be too stupid to understand nuance. Better?

          • http://secondthots.blogspot.com Dennis_F

            But I've proven your nuance to be wrong. So, what does that make you? A complete idiot? lol. Next.

          • Anon Liberal

            You seem to have a curious definitioon of the word `prove`. Has Tony Clement been tutoring you on the scientific method?

          • http://secondthots.blogspot.com Dennis_F

            I picked apart your so-called nuanced argument. You said it was principled and circumstances changed. I proved that circumstances were already known, and Liberals changed very much after the fact. Or, again, too nuanced?

            Simply insulting people who dare oppose your party is no way to go through life, dude.

          • Anon Liberal

            So basically you are arguing that it took too long for the Liberals to arrive at the right policy. Alright, what does it say about the Cons then that they still have not done so?

            As for your last comment, go tell it to John Baird :P

          • http://secondthots.blogspot.com Dennis_F

            I am saying that the timing suggests it was purely political. And I'm telling it to you.

          • Anon Liberal

            Pure politics would be to cut everybody`s taxes to zero. That would be the popular thing to do. Advocating any taxes always requires political courage.

          • Orson Bean

            I agree that that's true re: personal taxes, but that's not true with respect to corporate taxes. For a large number of people, especially on the left end of the political spectrum, "sticking it to big corporations and banks" with tax increases is politically popular. Why do you think, e.g., in virtually every stump speech he makes, Jack Layton makes derogatory references to "big corporations and banks"?

          • Anon Liberal

            Yes it`s popular for the 15% of people who vote for the NDP. The Liberals have a broader constituency so it takes more courage for them to advocate any taxes (even if, in this case, it simply amounts to cancelling additional tax cuts).

          • hollinm

            Shove off buddy!!!

        • hollinm

          Its also about the Libs moving to the left of the political spectrum. Tax cuts bad, homecare good, national daycare good, EI after 9 weeks good, free university tuition etc. etc. etc. There isn't a social program the Libs don't believe in. Can you imagine the shape the country would be in if Dion had gotten his green shift in?

          The trouble for the Libs is that Harper has spread himself over the centre of the political spectrum and the only pool Ignatieff has to fish in is the left side.

          • Anon Liberal

            "Can you imagine the shape the country would be in if Dion had gotten his green shift in?"
            ————————

            Yes, economically and environmentally better off. The horror! The horror!

      • hollinm

        No it is not about reducing the deficit. It is about a national daycare plan, a new homecare program and any other damn thing the Liberals can think to spend money on.

        Problem it was the 2007 budget where the corporate tax reductions were approved by parliament. The Liberals supported that budget. and now they are being phased in. So the next budget will say nothing about the corporate tax reduction other than to reiterate they are happening. Lower corporate taxes means increased jobs for the children that you are so worried about.

        • Tybalt

          That's a very odd statement to make about a party whose stewardship of the budget during their years in government was excellent, almost without tremor. There is a significant evidentiary gap to be bridged here – we began running big deficits under the current government, when we also have been subjected to farcically inaccurate budget projections.

          • hollinm

            The Liberal party of Chretien and even Martin is no more. Quit living off the laurels of the mid 90's. We are in a new century and there is new leadership running the Liberal party. They have gone left. You did not dispute one thing I said. Rather you simply went on a tirade about the "old" Liberal party.

            Once again you will not acknowledge that the deficit was necessary because of the global recession. Would you have had the government allow unemployment to rise up to oh 17%. Would you rather that EI be cut off rather than extending benefits. You guys and your tiresome talking points about the deficit.

            What was the coalition all about? No deficit spending to help the economy. Then when the opposition got it in spades they said it isn't going out the door quick enough. Then it was too much and of course now we are mortgaging our children and our grandchildren's future. Oh and maybe we need more deficit spending.

            Ask the Liberal party who created the national debt of $600 billion. I think there is a picture of Trudeau and his then Finance Minister Jean Chretien on that debt load. So knock it off and quit talking b.s.

          • Anon Liberal

            The Liberal Party of TODAY has pledged to bring the deficit down to a manageable level witrhin several years of taking office and they're much more credible than Harper/Flaherty on that regard.

            The stimulus spending probably was necessary – and yes it came because of opposition pressure to act – but we said it should be done more quickly – and with less possibility of political games – by increasing the gas tax for municipalities instead of this absurd process of approving projects ad hoc once the vital signage issues were settled. And the entire deficit would not be as large if the Cons had not stupidly lowered the GST when there was no need to do so.

            Not to mention the prospect of making it much larger by doing retarded things like building mega-prisons when the crime rate is declining and helping subsidize the Pentagon's defense budget by sole-sourcing the fighter jets without a competition. That's what the bankrupting our grandchildren attack is about Sherlock.

            And yes the Liberals share responsibility for accumulating the deficit – although I think you'll find Mulroney and Harper have more than done their share when they were in power – but they also started paying some of it down until you clowns got back into office.

          • hollinm

            "The Liberal party has pledged to bring down the deficit to a manageable level". It is at a manageable level. You just don't like who the government is. That's it in a nut shell. Lets see when the govenrment begins cutting if the Libs are on board or is it more grandstanding.
            An increase in the gas tax was going to help those whose EI was going to run out? Give me a break!
            I have no idea whether building additional prisons was part of the stimulus program but the fact is we already have overcrowding in our prisons which needs to be addressed at some point. A majority of Canadians want criminals to go to jail and stay there so they can't victimize others. You lose on that argument.
            As for the deficit I would simply point out the Libs are responsible for most of the Canadians debt that the country now carries. The other thing that people like you refuse to accept is that there was a huge world wide recession which the government had to deal with. Can you imagine Canada managed by the coalition of fools? I shutter to think how close we came.

          • Anon Liberal

            " It is at a manageable level."

            No It's not. We have a structural deficit in place now. And we were going to have one even before the financial crisis hit. Is it as bad as the the US or UK? No. Do we want to wait to act until it is? No.

            "Lets see when the govenrment begins cutting if the Libs are on board or is it more grandstanding."

            Okay, let's teest your theory. You can begin with the mega prisons and the F-35 contract. Go!

            "An increase in the gas tax was going to help those whose EI was going to run out?"

            Increasing EI payments is completely separate from the ad-hoc stimulus/EConomic Action Plan! sign-planting program I criticized above. It was a completely legitimate action and I have no beef with the Cons over that.

            "I have no idea whether building additional prisons was part of the stimulus program but the fact is we already have overcrowding in our prisons which needs to be addressed at some point. A majority of Canadians want criminals to go to jail and stay there so they can't victimize others. You lose on that argument."

            We can address the overrcrowding problem by having them stay at your house.

            A majority of Canadians also want to pay zero taxes (where's your poll by the way). That doesn't make it intelligent public policy. Nice try declaring victory for yourself though.

            "As for the deficit I would simply point out the Libs are responsible for most of the Canadians debt that the country now carries."

            Fine. We're also responsible for most of the good things in this country too then: public health care, a good educational system, a peaceful society, a declining crime rate, our good international reputation (until the Harperites took over at least).

            "The other thing that people like you refuse to accept is that there was a huge world wide recession which the government had to deal with."

            No one's disputing that bunky.

            "Can you imagine Canada managed by the coalition of fools? I shutter to think how close we came."

            Yes I can imagine it and the country would have been better off. Go get those chills checked out. You may have a brain disease.

          • hollinm

            You are living in some utopian universe which is not in touch with reality. I could counter each of your points but what's the use. You believe that the government is the answer to all that ails our country. I do not. I can spend my own money which I worked for quite well all by myself thank you very much.

          • come again

            A deficit would not have been necessary if taxes had not been cut while spending unreasonably increased in the boom years prior to the recession.

          • hollinm

            And who was in government for 13 years. Billions of dollars in surpluses. How were the lives of ordinary Canadians improved during that time? Is healthcare any better? Is there easier access to university? Are the aboriginal people better off today because of 13 years of Liberal government. Tell me one memorable thing that all Canadians benefited from during those dark 13 years.
            I don't know about you but I can spend my own money quite well thank you very much. I don't need them confiscating it for their own pet projects while my standard of living does not improve.

        • Anon Liberal

          If people don't have a national daycare plan then they spend the money on more expensive private care (or a parent stays home instead of working) so you're not helping the economy there.

          If people don't have the means to take care of sick relatives at home then those relatives are hospitalized which is even more expensive for the state.

          If you took 2 seconds to think beyond your automatic opposition to all social programs you would see both those propositions make sense on both economic and social grounds. Certainly more than additional corporate tax cuts :P

          And we've already covered that, yes, the Liberals initially supported the corporate tax cuts but have changed their position because of the changed public finance/economic situation.

          • hollinm

            What you are talking about is wealth redistribution. People need to look after themselves. The government cannot do it for them unless they confiscate the wealth of one group to give to another group.
            Nobody paid for daycare for my kids when they were growing up and | didn't expect it. Nobody looked after my dying mother. We did it within our family because we loved her and cared for her.
            I readily acknowledge there are those that need a hand but we should not expect the government to provide cradle to grave services. Otherwise we will all be broke.
            A truly national daycare system. I emphasize the truly part would cost $10 billion annually.
            Thats the problem with socialists they don't want anybody to have anything. They want everybody to be down at the lowest common demoninator. What tax rate are you prepared to see the upper income pay….50%, 60%, 80%. Think about it?

          • Anon Liberal

            Yes I am talking about wealth distribution, like we already have and which helps pay for many of the things that make our society a more decent and egalitarian place than countries that don't redistribute wealth to the same degree.

            Maybe nobody paid for daycare when you were growing up because women stayed home to raise kids. Same thing for taking care of sick relatives. Times have changed.

            How high should the tax rate be? I don't know. How high is Denmark's tax rate? They're doing a lot of intelligent social policy, their taxes are relatively high compared to ours, but all-in-all it seems like a smarter model to follow than what the free market fundamentalists are proposing.

          • hollinm

            You socialists are quite prepared to wealth distribute but don't have the guts to say how much you would confiscate. I think you would confiscate as much as it takes to make us all poor.
            If you think Denmark is great at social engineering then move there. Have you not seen what is happening in Europe with their cradle to grave government programs. They are going broke and are now rioting because they cannot retire when they are 50. All of this shows the nanny state does not work. There is only one taxpayer and eventually the brick wall is hit.
            Most clear thinking Canadians understand that if we put in these expensive social programs we will eventually go broke like Greece, Ireland and Spain.
            When have you ever seen a government social policy program work efficiently and meet its stated goals? Daycare will never be national because it will leave out the rural areas, it will be unionized and so we will have union wages and benefits and of course the piece to resistance…strikes. What would part time workers do for day care when union workers will only work 5 days a work from 9 to 5?

          • hollinm

            hollinm continued

            Those are some of the issues a national program would not deal with. The other thing is daycare is provincial jurisdiction. Provinces have different needs.
            Anyway that is why we need Stephen Harper as prime minister. We need to keep the tax and spend Liberals and socialists away from the treasury.

          • come again

            tax and spend? ha. conservatives just spend, from the moment they took power, years before the recession. that's even smarter. oh, wait! taxes are going up in 2011.

          • hollinm

            You're right. They did start spending as soon as they got into power. They made pension income splitting possible for seniors. They reduced the GST by 2 points and they reduced overall tax rates. That's because the Libs were overtaxing Canadians for years to fund their pet projects. Years before the recession? They were elected in 06 and re-elected in 08. Hardly years.
            Yes taxes are going up. EI premiums which had a two year moratorium on premium increases and CPP to keep the program funded. Where do you think EI comes from and Pension payments come from. Some black hole. They need to self sustaining. Can you imagine the premium increases if Layton/Ignatieff had gotten their EI for 9weeks of work through. Yikes!
            There is plenty of waste in the federal government and programs that should be axed. Lets see if your buddies in the opposition parties support the government when cuts start coming.

          • evenflow

            The Liberal Party overtax Canadians for years to fund their pet projects while at the same time providing the Canadian public with the largest tax cuts they have ever had?

            Your just blowing smoke and making $@&^ up. Have a little self respect at least.

            In fact this is what makes Conservatives so dangerous, you guys have NO self-respect or honor, you can make stuff up and lie and it doesn't bother you, that is scary stuff.

          • hollinm

            I think it is you who is blowing smoke my friend. The fact is the Libs announced a tax decrease and then promptly wiped it out with increased EI and CPP premiums. I saw little change in my take home pay and that is a fact. Smoke and mirrors thats what Liberals are famous for.
            I won't dignify your other silly comments. We are all citizens of this country and have a right to our opinions whether Liberals like it or not.
            However, there is one thing I know the Libs will not be in power after the next election and that gives me a great deal of satisfaction.
            By the way the Liberal party is only the party in recent history that was determined to be corrupt and set up a system to steal taxpayers' money. It is they who have no self respect or honour. However, feel free to keep drinking the kool-aid.

  • Crit_Reasoning

    Just wanted to call attention to a great article that Robert McClelland links to above:

    Dion rules out coalition
    http://www.theglobeandmail.com/news/politics/arti…

    And why did Dion firmly rule out a coalition with the NDP, eleven weeks before he signed the Coalition Agreement? Why, because those silly socialists were going to damage the economy by reversing the corporate tax cuts.

    It would be funny if it wasn't so sad.

    • Inkless

      This is why it suddenly helps to have been reading Inkless last March:
      http://www2.macleans.ca/2010/03/29/canada-150-tow…

      • Crit_Reasoning

        Thanks for the link. You nailed it back in March.

        Dion’s attempt to hang onto some corporate street cred, despite his Green Shift, consisted of insisting that corporate tax cuts proceed as Harper had announced.

        Given that Ignatieff is generally seen as far to the right of Dion, it's ironic that the Ignatieff Liberals have pulled a 180 and jettisoned their corporate street cred in order to pursue whichever populist play seems most expedient at the moment (in this case, trying to shame the NDP and sabre-rattle for an election).

        No doubt the OLO has visions of luring disaffected NDP voters thanks to Ignatieff's "principled" stand against corporate tax cuts. Yeah, I'm sure they'll be flocking to the Liberals in droves.

        • Jenn_

          Uh, so let me get this straight. When the Liberals were touting a completely different taxation plan, taxing carbon and all that, a part of it was dropping some other taxes. Now that they're not advocating taxing carbon, they figure that money has to come from somewhere and so the tax cuts are out.

          But to you guys, any tax cut whatsoever is sancrosanct and can never be taken back. Else why complain about how they "jettisoned their corporate street cred" without acknowledging they also jettisoned the carbon tax?

          • Crit_Reasoning

            As you noted, Ignatieff wants to pay for his promises by repealing corporate tax cuts, while Dion wanted to pay for his promises using revenues from the Green Shift (while steadfastly maintaining that it wasn't a "tax increase", even though it was only partly offset by income tax cuts).

            I don't think that tax cuts are sacrosanct, but I do think it's kind of funny that according to Liberal rhetoric in 2008, repealing corporate tax cuts would damage the economy.

          • Jenn_

            Why, without other taxes taking up the slack?

          • Crit_Reasoning

            Here's Dion extolling the virtues of corporate tax cuts:

            "I would go deeper than [the Conservative corporate tax cuts] because it is a good economic policy within the Canadian economy. It will help us compete with other countries, and it will strengthen our economic sovereignty.

            A lower corporate-tax rate is a powerful weapon in the federal government's arsenal to generate more investment, higher living standards and better jobs."

            Dion said a corporate-tax rate less than 18.5 per cent would lower companies' cost of capital, which would lead to increased spending on productivity-enhancing machinery and equipment. He added that lower corporate taxes would prove attractive to investors and help Canadian companies protect themselves against foreign takeovers.

            http://www.canada.com/topics/news/politics/story….

          • Tim

            What is really funny is that the Federal Liberal's provincial cousins in Ontario have their own planned corporate tax cuts over the next few years. There is actually a rumor that keeps on floating around that Harper and McGuinty have an unholy alliance to help each other and collectively hurt both Hudak and Iggy specifically that stimulus funding is being directed to ridings in Ontario that represented by the Liberals provincially and the Conservatives at the federal level.

          • sourstud

            My God, that WOULD be an unholy alliance!

          • Jenn_

            Yeah. And what was the country's deficit in October of 2007?

            Corporate tax cuts are a great thing to do if a) you've instituted other taxes to make up for it and b) you don't need the money.

          • Crit_Reasoning

            Ignatieff doesn't want to repeal the corporate tax cut to help pay down the deficit. He wants to repeal the tax cut in order to fund major new social programs he has promised, such as the Liberal Family Care Plan and a national child-care program.

            However, the $1.6 billion gained next year from reversing the corporate tax cut wouldn't even come close to covering the cost of Ignatieff's promises. For example, the Liberals costed their 2005 child-care plan at $5 billion.

          • Jenn_

            Yeah, well, that's stupid too, isn't it? I don't know why our politicians seem to think we have money for overpriced jets with the 'wow' factor, or more social services when we are struggling to pay for the stuff we have now. Failing at paying for the stuff we have now.

            But cutting corporate taxes isn't going to help no matter which of the above items we end up buying.

          • Crit_Reasoning

            But cutting corporate taxes isn't going to help no matter which of the above items we end up buying.

            Stephen Gordon and many other economists think that rescinding the corporate tax cuts would be a mistake:
            http://worthwhile.typepad.com/worthwhile_canadian…

          • Jenn_

            Thanks for the link, Crit. I'm fairly amazed to see an economist think similarly to what I was thinking, only I'm far more pessimistic of course.

            If a profitable company, today, isn't taking advantage of 1% interest rates, less demanding wage negotiations and other signs of the recession to invest in the equipment they need for the future, I can't see how shaving some taxes is going to make them move. Similarly, if a profitable company IS investing in robotic lines to manufacture whatever, I don't see how that will increase employment. And manufacturing sector jobs are the ones we most want, I gather. If the company isn't profitable they aren't paying any taxes and so we aren't talking about them.

            But the biggest point is that yes, rescinding tax cuts that have already occurred causes confusion and a whole lot of backoffice headaches for the tax preparing software makers. Which is why Ignatieff is on to the NDP to prevent those tax cuts from occurring in the first place. Totally different story, then.

          • EeeOar

            From the same website we also can find this not quite as ringing endorsement for other CPC tax policy.

          • EeeOar

            Building on Jenn's post…

            It would be interesting, form a public policy perspective, to compare the benefits of spending $65B on F-35s or spending the same total amount to provide 13 years worth of child-care.

          • Crit_Reasoning

            The F-35 cost is $16 billion with all ancillary costs included (the opposition thinks it could be even higher depending on whether maintenance costs are more than estimated.) This cost isn't a lump sum expenditure–it will amortised over a decade at least, and delivery of the first aircraft won't happen until 2016. So the annual fiscal outlay is 1 or 2 billion. Meanwhile, the annual cost of a national child-care plan would be 5 or 6 billion.

            As for the benefits of each, that's up to individuals to decide. Personally, I've always been skeptical of the benefits of a national child care system. It's one of those perpetual Liberal promises (dating back to Chretien) that has never been delivered on. The current $100/child/month Universal Child Care Benefit approach seems fairly popular.

          • EeeOar

            Whoops!! My bad. It's 65 planes, isn't it, not $65B. What a bonehead!

            Still, the similar public policy question exists…where do we get the most value for our (lets say) $2billion per year? Is one third of a child care system more valuable to the country than top of the line fighter planes, or is the corporate tax cut an even better expenditure?

            Yes, the Universal Child Care Benefit is popular, but is it good public policy. Is it achieving the goal.

          • Crit_Reasoning

            Is one third of a child care system more valuable to the country than top of the line fighter planes, or is the corporate tax cut an even better expenditure?

            Good questions. Some economists might prefer the tax cuts because of the behavioural response and economic effects (increased investment, productivity etc).

            Liberals might argue that a national child care plan is the best expenditure because it would improve access by creating more childcare spaces. (Ignatieff has further promised that he wouldn't stop the UCCB cash from flowing). The question is how many new spaces would be created, and how much would each new space cost taxpayers?

          • Jenn_

            I personally think the UCCB is a complete waste. It doesn't do enough for those who need it for childcare to be meaningful, and people really seem to resent having to pay taxes on it–which also makes it much less than $100/month for many. That said, I'm also not so sure about a national child care plan that would pay money out to parents. What we need is a national child care plan that would pay money out to quality childcare providers. These people (have to) go to college for two years to earn their ECE designation, only to earn minimum wage and get spit up on (or worse) all day long. It isn't too confusing as to why there are too few quality childcare spaces. $100/month per child to the nursery school would make a real difference.

            I'd prefer to subsidize the person looking after the child over paying all parents for having children (isn't that what the baby bonus is for? We still have that, right?). If you are a stay-at-home mom or dad, I guess you would be the child care provider.

          • André

            As a parent, knowing more and less fortunate parents, I can tell you that the UCCB does nothing to benefit child care universally. The most it does is help buy prettier clothes, not always for the child.

            To middle class parents like me, it's 100$ a month I that doesn't change the way I budget or improve the my child's care.

            I agree with everything you say on this subject Jenn.

          • sourstud

            "The most it does is help buy prettier clothes, not always for the child."

            Beer and Popcorn! Yeah!

          • hollinm

            The answers to your questions would need to come from the provinces as daycare is provincial jurisdiction. Provinces have different wants and needs and therefore their willingness to use the money to create "new" daycare spaces would be subject to their own plans. They will say anything to get the money and then do exactly what they want with it. There is not a damn thing the Feds can do about it because daycare is provicial jurisdiction. Like healthcare do we really believe that all the money being transferred to the provinces for healthcare is being used strictly for healthcare?

          • EeeOar

            I'm mostly undecided on the ongoing "argument" regarding constitutional responsibilities. Not because I believe the constitution is unimportant, but instead because as a practical matter the federal government is deeply involved in at least a few (many) of those nominally provincial jurisdictions.

            Along that line I'd strongly support a move by a federal government to announce a 5 to 10 year plan to stop collecting federal taxes for money that is destined to be transferred to provincial governments. The provinces should be encouraged to adjust their own tax rates as they see fit to either make up for the entire shortfall or whatever portion of the shortfall that they are comfortable with.

            I'll make the claim that that would take leadership!

          • hollinm

            Sorry I hadn't read this post before replying to a previous one. I think we are basically on the same wave length.
            Problem is the provinces agree to anything to get the money. Once they get their hands on it they do exactly what they pls with it. So as an example the feds say a certain province was suppose to create so many new daycare spaces for the funding provided but didn't. The province says there was not enough money and there is this back and forth and the public has no idea who is telling the truth etc. So the money is spent, no new daycare spaces were created and where are we?
            Provinces are charged with managing the healthcare system, not the feds. So once the funds are sent to the province there is no assurance that transfer is going to be used entirely for healthcare expenses.
            You get my drift. It is a vicious circle.
            The answer does require leadership but it will not happen in a minority parliament. This type of decision needs to be taken by a majority government and that is why the Harper Conservatives need a majority so that these decisions can be taken. To suggest the Ignatieff Libs may win is not todays reality.

          • EeeOar

            I'm not 100% sure that a transition couldn't be started in this minority. First I'm not sure that the BQ could resist supporting a program that gives Quebec more control over its own tax money.

            As far as the Liberals or NDP go, maybe they would get their act together and force an election if the current government brought forward this tax shifting proposal, but you're not worried that the Liberals would win that election, are you?

          • hollinm

            You may be right about the Bloc but the fearmongering by the Libs /NDP would be something to behold.
            That is why the Harper government does not undertake major initiatives because it is a minority and he does not want to give the opposition any meat to chew on. As things stand I cannot see where the Libs will pick up 40+ seats to even win a minority.
            If they are looking to the coalition they better win more seats than the Conservatives. Harper would neve accept a coalition of losers to steal the government. We would have a constitutional crisis.

          • EeeOar

            Harper would neve accept a coalition of losers to steal the government.

            Actually David Johnston's decision, yes?

          • hollinm

            Technically yes but if the PM thought that what was happening was not in the best interest of the country or was an affront to the spirit of our democracy he could go to the courts.
            I suspect Johnston would make the right decision after considering all of the circumstances.
            The coalition in the U.K. worked because the party that won the most seats led that coalition. How would it appear in Canada if the Conservatives who had won the majority of seats were shut out. It may be legal, I don't know, but it would smell to high heaven. Further if the Libs did not win more seats than the Conservatives that would mean the coalition would need t rely on the Bloc for support. Canadians living outside of Quebec would not accept that. We saw that in 08 and the outcry would be even greater in 011.

          • EeeOar

            Do you see any role for the feds in areas of provincial responsibility?

            Specifically, are there any merits to having some consistency across this great dominion in areas of provincial responsibility? Or is the minimum requirement that your provincial health care card can get you trouble free access to health care in any other province that you might happen to be in?

          • hollinm

            The constitution clearly lays out federal and provincial responsibilities. However, the Libs believe in the centralization model where they can control the provinces through control of the purse strings. The premiers increasingly are having none of that.
            Hence we always get into the argument when a program doesn't work where the provinces say it is the feds fault for not funding the program properly and the feds blame the provinces for not doing the job. Hence we have boondoggles galore. Whether its healthcare, education, welfare etc.
            I think Bernier has it right. Stop with the provincial transfers and let each province tax according to its needs. If Ontario feels there needs to be more daycare spaces then they should set up a system that satisfies their needs. Ontarians can decide themselves if they support how their province is spending their taxes.
            Whether the government can help is by bringing the various stakeholders to the table, act as an intermediary to help negotiate national standards etc. Thats it.
            I think Ignatieff wants to be a provincial premier because all he talks about are things within provincial jurisdiction.

          • Jenn_

            Imagine having a discussion about where to spend our limited dollars! This is so refreshing!

            I think we definitely need new fighter planes, and think we should buy cheaper, two engine models that won't surprise anyone (we are supposedly a peaceful country acting in defence, not attacking sovereign states–in theory). They also could be more reliable in a cold zone–say like the Arctic which we have some ownership of. I don't know how much of our 2b allowance I just spent, but it was a good chunk of it. So, I think we forget about the corporate tax cut, and rework the UCCB to afford quality childcare (see below). I just might have a bit left over! I would put it to the debt.

            What would you do?

          • EeeOar

            Check out this video from the good folks over at TVO. The topic is the state of our armed forces after Afghanistan.

            Lots of good stuff in there, including…
            …seems to be some doubt as to the wisdom of acquiring any F-35s
            …within the existing budget we could man-up and/or get more gear if we allowed the forces to operate more efficiently (which I believe translates to close some bases)
            …we need to be clearer about the merits/benefits and costs of potential missions before we jump in

            After watching that video one and a half times I lean towards no F-35s.

          • hollinm

            Is the Universal Child Care Benefit good policy. Well it was never intended to pay for daycare. We all know daycare costs a lot more than $100 per month. Other than Quebec of course. It was simple assistance to help working families. I don't know many people who would object to getting $100 (even if taxed) for each child under the age of six. What was the goal. Simply a way to help working families. It had nothing to do with paying for daycare. I am sure it helped those families who found themselves unemployed during the recession.

          • EeeOar

            Well, it is called the Universal Child Care Benefit, and it was at least indirectly pitched as an alternate to the Liberals more ambitious plan, but yes, it was not meant to be restricted to daycare costs.

            In the end the cash can be used for anything (including beer and popcorn!!…that was the comment, n'est pas?).

            Given that there really are no limits to what the freed up cash can be used for, was the UCCB really the most efficient way to get more cash into the hands of working Canadians? Ie is it good public policy to create a yet another new section in the tax code rather than just adjusting some existing rate or deduction? Shouldn't we be aiming to simplify the tax system rather than make it more complicated?

          • hollinm

            You guys really want to keep fighting the old battles. Unless the Libs are going to come out and say they will cancel it there will be no further discussion. In fact I think Igantieff is on record as saying he will keep it and still introduce a national daycare program. Thats why he will lose the next election. He is so inexperienced/inept that he is not capable of making a logical argument to get rid of the UCCB in exchange for a truly national daycare plan. I have already outlined the shortcomings that I see in achieving this goal. It ain't going to happen in our life time.

          • EeeOar

            But simplification of our tax system is a worthwhile objective, yes?

          • hollinm

            Yes!

          • EeeOar

            Excellent! Then surely you will support my two part plan. Here it is:

            Step 1: Stop creating new tax deductions
            Step 2: Every year from 2011 until the tax system is cut to 25% of its current size, lets eliminate one tax deduction. Each time we do this tax rates can be lowered or the Basic Personal Exemption (yes, I would keep that one) can be raised so as to keep the total tax take unchanged. I nominate the Working Tax Credit, the tuition amount, the northern residents deduction, the child sports credit and the political contribution deduction for 2011 through to 2014.

          • Jenn_

            The number of deductions has exploded in recent years, it has become ridiculous, I agree with that. My preference would be to leave the Working Tax Credit to the very end, and the Northern Residents deduction (have you seen the price of turkey?) The deduction for having a pension would be first on my list, immediately followed by the one for having a job. Those two are completely stupid to me, backwards even. Then all of those after-school activity credits which are multiplying like rabbits. If the child care providers are given the subsidy I envision for them, I'd next get rid of the child care deduction. The political contribution credit is a sweet deal I'd be sorry to see go, but if we are going to revamp how our political parties obtain money I'm good with looking at the whole system.

            I don't understand the dividend tax credit or the overseas employment credit, but my knife is sharpened for them in the meantime. Also, a personal logging credit? Investment tax credit? Labour-sponsored funds credit? No clue on those.

          • hollinm

            Yes the Liberals costed their daycare plan at $5 billion but I have seen numbers that suggest if it was truly a national plan and not tinkering around the edges that the costs could be $10 billion. I think shades of another long gun registry boondoggle if they had had an opportunity to implement it.

          • Holly Stick

            But the Harperites are willing to waste $21 billion on F-35s:
            http://impolitical.blogspot.com/2010/12/dissectin…

          • hollinm

            The government needs to protect the country and participate with the world in defending its world wide interests. The existing F 18's will be 40 years old by the time the new F35's are delivered in 2016. So what would you do? Leave the country with the inability to defend itself and its own airspace and help our allies when necessary. I don't profess to understand what the military needs but we have to place some faith that the government/military are buying the aircraft they think will be needed in the future.
            The one thing that is not acceptable is foregoing the purchase and allowing our military to be killed in outdated equipment or the huge cost for maintenace of the old F 18's.
            Chretien tried that with the cancellation of the helicopter deal which cost us $1 billion for nothing and we still don't have helicopters 20 years later.
            There is no way we will ever have a national daycare program. The Libs promised for 5 elections and didn't deliver. The Conservatives who will win the next election will not even attempt such a widely expensive social program. Holly you will just have to suck it up.

          • Jenn_

            I agree with you that we cannot do nothing. But you sure have a lot of faith in a government that purposefully, intentionally doesn't give you enough information to figure out what they're doing. MacKay's biggest reason for the purchase of those particular planes is that the troops will enjoy playing with them. I mean, WTF?

          • hollinm

            WTF….I did not hear MacKay say that but to take something that was probably said in jest and use it as an argument is a cheap shot.
            Remember the Libs are not arguing against the purchase of the jets. They are arguing about process. That's their problem they always argue about process. What would they do? Re-tender it? Waste all the money that the country has spent thus far, potentially jeopardize the jobs and go out and waste more money to re-tender and rmay be end up with a stripped down version, the same plane or no planes at all. This is a foolish argument and lets see the Libs go into an election in Quebec arguing against the purchase where there is a large aerospace industry and the industry has already come out in support. For us to think that twe know more than the government or the military about what kind of plane we should buy is naive in the extreme.

          • Jenn_

            Okay, maybe MacKay was trying for humour, at an inappropriate time. Sometimes we humans are like that. But I still haven't heard a compelling reason why we need a jet with only one engine and with stealth technology–especially as it appears it isn't all that stealthy anyway once you put firepower on it.

            But Hollinm, this is a very important point that I urge, plead, beg you to seriously consider: Trusting a government or a body of experts–in the face of information which is contradictory or just doesn't make sense–is how we got "weapons of mass destruction" in Iraq, and "credit default swaps" in our economies. Whether Liberal, Conservative, or Blue Polka-Dot party, we need to know what is being done in our name and why.

          • hollinm

            In principle I agree. However, to suggest that we are knowledgeable even given the information about what jet fighters we need is not credible. Thats why we pay the MPs and bureaucrats. Hopefully to make the right decisions.
            There are critics and there are supporters of the jet fighters. However, the neither party has all the expertise and the information that was considered and went into the decision. Everyone who crticizes may or may not have an agenda. However, if the government is going to make decisions based on everybody agreeing nothing will get done. For better or worse we elect governments to make decisions. We can always find shortcomings but it is the best we have today.

          • Jenn_

            Well, yes we certainly do elect them to make the best decisions. However, when I ask (through the media, it is true) "why do we need stealth technology, and wouldn't we be better off with a two engine aircraft" I'd like some kind of answer besides, "oh, support the aerospace industry and the troops". That doesn't answer my questions. I grant you that some of my questions may be sensitive (like, are we allowing torture under our name) and maybe we have plans to invade some sovereign country that I'm not aware of. But ESPECIALLY in that case, I want an answer. The whole entire point of a democracy is that the government is accountable to the people. I think we the people have been letting that slide for a few decades or so, and look where that's gotten us.

          • hollinm

            Jenn I have no idea who you are but I respectively say you can ask a thousand questions but to what end. Canadians have the ultimate hammer and that is the ballot box. If the F 35 decision is important they will make that judgement. Don't like the decisions being made vote the bast.rds out. That's the clout the citizens have. However, it does not make a lot of sense to keep debating and debating a decision the government has made. There are as many questions as there are answers. So I don't get too hot and bothered about wanting to know the cats a$$ of every decision. I decide on balance has the government done a good job or not and vote accordingly. I am not trying to run the government and it is a waste of your time to think that you can. Remember politics is a game. We shouldn't take it too seriously because the MPs certainly don't.

          • Jenn_

            I'm not anybody, hollinm, so don't worry about that.

            I respectfully disagree with you, to a large extent. We nobodies are the exact people whose job it is to keep the government accountable, and the only way we can do that is by asking questions. Where I agree with you is when to know when to move on. For example, arguing about, say, the National Energy program of, what was it, the 70s? can be put to rest by now. Arguing about an airplane purchase that hasn't occurred yet, though, is a different matter. Politics might be a game, but running the country isn't. And we nobodies need to do our part–because we do have a part in it. That's democracy!

          • hollinm

            Well I guess we will agree to disagree. The purchase has been completed and there never will be a resolution to the matter because nobody isn't interested in determining the facts. If the purchase is in the next budget then the Libs and NDP can put there faux outrage into a non confidence vote on the budget. Then the Canadian people will decide.
            The National Energy Program has destroyed the Liberal party in Alberta and they will not forget just as I won't forget that the Chretien goverrnment designed a program the purpose of which was steal taxpayer money.
            Running the country is a serious business but if the government listened to all the pundits and the boo birds nothing would get done.
            By the way were you this vociferous when the Chretien government bought 4 used subs from the U.K. None of which worked and in fact killed one of our sailors. I hope you were asking questions then and of course you got the answers didn't you? :-)

          • Jenn_

            "By the way were you this vociferous when the Chretien government bought 4 used subs from the U.K. None of which worked and in fact killed one of our sailors. I hope you were asking questions then"

            Precisely what I'm saying, Hollinm. No, I wasn't paying any attention. I assumed the government knew what it was doing and would make the best choices. I also assumed they were properly safeguarding our money. I DID vote those bums out when it turned out they weren't doing the job. But then I mostly went back to sleep. Until Iraq. when I realized we all have to be diligent all the time. Not just when the party you favour is out of power (although, I admit the party I favour hasn't been in power since I had my epiphany, but I INTEND to continue paying attention.)

          • hollinm

            As citizens we do need to be informed and to question. However, we have people who are making their decisions based on the latest headline or who is doing the criticizing. Seldom do we see a real analysis which points out the pros and cons in a straightforward, unbiased manner. So people make decisions based on incomplete information.
            The Libs are not arguing against the purchase of the F35s because as we both agree we do need to replace the F18's down the road. They are arguing against a process that their government started and which I assume would have followed through on should they have remained government. So I think they are being disingenous and therefore distrust what they are saying.
            Yes we need to pay attention. However, getting into the details of whether the aircraft should have one or two engines is too much in my opinion.

          • Jenn_

            As I understand it, the signing on to the development of the aircraft did not obligate us to purchase the finished product. Ideally, it would be the best plane and no question it should be considered, since the purpose of the program was to give the allies a plane that suited their needs. But sh$t happens, the really good plane isn't available to allies, other aerospace companies didn't just go away and stop designing jets, etc. I agree that the military knows what they'd like in a plane. I'm just suggesting someone ask them why they need this, why they need that, and have sensible answers come back. Not "it's really cool" and such. Like me and a Blackberry. I'd like a blackberry. Why? Well, I need a phone. See the difference there? Justification is all I'm asking for. But, keep on mistrusting the Liberals and get justification from them as I shall continue to try with the Conservatives.

          • André

            You'll have to clarify this:

            For us to think that twe know more than the government or the military about what kind of plane we should buy is naive in the extreme.

            the neither party has all the expertise and the information that was considered and went into the decision

            Sounds to me like you're saying nobody has the expertise to question the government's purchase of jet fighters, not even politicians.

            That's quite the opposite of what happened with the Avro Arrow isn't? I mean the military set very specific requirements to meet their defensive needs, and the government went through great lengths to meet those needs. Then on the verge of success, politicians questioned the expenditure and cancelled the project. Leaving our country defenseless.

            What I'm getting at is that I agree with you that we should not spend too much time questioning the military's assessment of our defensive needs. But when even they are not sure 65 F35s is going to cut it, that when we need to question who's making the purchase; that would be Defense Minister MacKeen to please Harper.

          • hollinm

            First of all I do not have to clariy anything. I am an ordinary citizen who is giving his opinion on this board.
            My point was there is a lot of conflicting information about the purchase of the F35's. Some in support and some against. However, for ordinary Canadians to try and assess whether it is a reasonable purchase is not within the experttise of the average joe on the street. So what happens, like you, there is a lot of speculation about motivations of the politicians.
            Yes politics plays a role but for you or anybody else to suggest that Harper/MacKay has some vested interest in buying this particular airplane is disrespectful. Harper like most of us knows little about buying an jet fighter. So what does he do. He relies on the military and the experts who advise the military. Then he makes a decision based on that information. To infer that he has some ulterior motive is beyond the pale.

          • hollinm

            hollinm continued…..

            In my mind. It is simple. The government made the decision to buy these particular planes under an agreement that was entered into by the previous Liberal government. As I said in a previous post if it turns out the purchase is not the right one etc. etc. then we the people have the ability to de-elect them. That's the ultimate hammer. If Canadians don't agree with the decision then they do not support them in the next campaign. Simple as that. However, this back and forthing serves little purpose in my judgement. It is a trip to nowhere.

          • André

            The "back and forthing" is actually a repetitive form of a natural behavior: sharing information. It is useful in aligning the votes powering the metaphorical hammer. "Back and forthing" only happens when the receptor is too deeply entrenched in partisan delusion.

            Delusions like:

            1. The Liberals signed and agreement to purchase the planes. There was no such agreement. They paid a few millions to maintain the "informed partner" status throughout the development stage. It's not a commitment to buy planes, it's the right to follow its development and see if it's a viable solution. A practice that is as common as breathing in all high budget governmental contract all levels of governance.

            2. Canceling the purchase would jeopardise Canadian aerospace contracts and jobs. First of all, I'll say it again, the Conservatives never had any obligation to purchase the planes. The only reason people are talking about canceling the purchase is because the Conservatives undemocratically went forward with the purchase. Second, the selection of Canadian contractors for services or products had nothing to do with the Liberals' investments.

            3. The military has selected the planes, not the government. The military does not have the legal right to make that selection. They can only produce a set of requirements and it's up to the government to tender and select the best option. Since this government has skipped the tender process, it's hard to say they have selected the best option…because there was no options. Also, while many military officials are impressed by the plane's capabilities, not a lot of went on record affirming that they are the best choice for the Canadian Air Force.

            4. The government is fully capable of making the best choice… in exactly the same way the never finished Bomark Missle was a suitable replacement to the completed Avro Arrow.

          • Jenn_

            Jenn continued . . .
            The good news is that we have more than one party in parliament. This is where our system is so very valuable. Because we do, legitimately, need to keep some things secretive, we can allow privy councillors access to the REAL answers. And privy councillors can be (and are) made up of more than just the governing party. So we have the ability to have more than one 'agenda' as it were looking at the source information. Now, they may agree with the information and disagree with the decision derived therefrom, but at least we'd know that much.

          • hollinm

            hollinm continued…
            Its funny in Canada we argue and fight over any kind of military procurement which would allow our military to be ready when called upon. Yet Martin had no problem sending them to the "killings fields of Kandahar" as Jean Chretien put it in his autobiography without proper uniforms lets alone the kind of equipment which could reduce casualities. We are petty little country who wants to play with the big boys but are not prepared to pay the price of admission.

  • Anon 001

    Good God, Inkless, how will the press gallery keep up with this non-stop election speculation for the next two months? Why on earth would Jack Layton keep Harper in power till 2012 when he can possibly be in cabinet in a minority Liberal government?

  • Amateur Hour

    Oh yay. We get to read sarcastic reports and comments about how political parties and leaders today stand for things they were against two years ago or more. That's so illuminating.

    Let's recap: The Cons have reversed themselves on so many policies in the past few years that pretty much no one knows what they will do from week to week — including their own ministers. The NDP choose whichever position is opposite that of the Liberals or most likely to give the Liberal caucus fits. The Liberals try to tack between the two, pleasing no one, including their rank and file and looking like seniors trying to work an iPod.

    Of course none of this high-snark coverage or commentary matters. What matters is what parties are proposing to do NOW, whether it makes sense given our situation now and whether it's sustainable moving forward. Given that Canadian corporations have enjoyed a decade and a half of rising profits (including a 9 year run of double-digit increases under the OLD tax regime), a couple hundred billion in tax cuts, and that the last two years has seen a massive rise in the public deficit, public borrowing and strains on both pensions and EI resources, perhaps the Liberals are right to reverse themselves from their 2008 tax stance for the 2011 budget.

    In other words: That was then, this is now.

    So, how about some coverage and discussion of the merits vs. costs of cancelling additional tax cuts for already profitable businesses? The Canadian Council of Chief Executives doesn't find this a terrible prospect, BTW.

    • http://secondthots.blogspot.com Dennis_F

      Thanks for the Liberal party press release.

      By the way, it's all about credibility on a certain issue. On this one, the Liberals don't have much, so it's unclear why they think thumping their chests about it makes the issue resonate any more for them.

      • Amateur Hour

        I'm not a part member so I'm not on the distro list for PR. To your point, NONE of the parties has been credible an a host of issues since 2006, as reflected in the state of Parliament and the public's attitudes towards it.

        So, looking and moving forward, what say you (and others) about the merits of cancelling, delaying or continuing with additional corp. tax cuts given the state of Federal finances and revenue? Are there alternate approaches you'd like to hear debated? If so, are any Federal parties putting them forward?

        • http://secondthots.blogspot.com Dennis_F

          Look, do I think the Liberal party seriously thinks corporate tax cuts are bad for us? No. I think this is purely a political move, one meant to find some point of differentiation between themselves and the Conservatives. Harper hasn't given them much else.

          In fact, I can totally seen them reversing themselves if they were to ever get in office. That's because these tax cuts are probably good for the economy, and they know it.

          • Amateur Hour

            "That's because these tax cuts are probably good for the economy, and they know it."

            When onerous, yes. But Canada's corporate tax policies have been highly competitive since the Paul MArtin reforms. Since 1996, Canada's tax policies haven't prevented companies from being profitable. Conversely, tax cuts have been poor generators of jobs, foreign investment, R&D inputs and productivity increases. And if you want nice fighter planes, geriatric nurses and new bridges, the government does need some revenue.

            It's disingenuous in the extreme to oppose a policy based on your suspicion that they party putting it forward might reverse themselves later. Or perhaps your not acquainted with our current government?

          • http://secondthots.blogspot.com Dennis_F

            You keep saying you're not spinning for the Liberal party, yet here you are with the same knee-jerk accusations against the Conservatives, and trite defences of current Liberal positions. Just saying.

          • Amateur Hour

            My criticism of the current government's policy record isn't knee-jerk, and one need not be a Liberal to see the wisdom of the Martin tax reforms — as the did Conservatives, I recall. Rather than projecting on to me what you (incorrectly) think my politics are, perhaps you could address the topic:

            Given the current fiscal state of the federal government and the current tax environment for corporations, are additional tax cuts for profitable businesses a wise plan? If so, how might the revenue lost be dealt with? If not, what alternate policies might make sense? Do you see any of the other parties putting forward a better/worse argument than the Liberals (who I mention based on the subject of this freakin' thread)?

            FYI: If you instead want to continue with the "you're a Liberal shill" line, please direct it at Mr. Wells, who was the recipient of said press release and posted it above.

          • http://secondthots.blogspot.com Dennis_F

            I don't know. Ask the Liberals why they supported these dreaded tax cuts just two years ago. You'll get your answer then, won't you? They seemed to think they were integral to a prosperous economy, didn't they? What's changed?

            You want us to accept this as a principled move. You're the only one.

          • Jan

            So fiscal policy should be a rigidly adhered to, without to regard to changing economic circumstances – is that what you're advocating, Dennis?

          • http://secondthots.blogspot.com Dennis_F

            No, Jan. Please try to demonstrate at least some ability to understand what's written. Don't you get tired of this act? God.

          • hollinm

            You expect Harper to not change his policy despite circumstances may have changed. What's good for the goose is certainly good for the gander.

          • Amateur Hour

            2 years ago we weren't running a $56 billion deficit, hadn't yet lost many tens of thousands of manufacturing jobs and our neighbour to the south (a big market of ours) hadn't yet doubled its debt.

            Again, could we please flip our calendars forward and discuss today's plans for tomorrow?

          • http://secondthots.blogspot.com Dennis_F

            So you mean they can have a good effect on the economy? This is why the Liberals once supported it?

            Besides, Dion was adamant about them even after the financial meltdown hit. He knew all these things would happen, but still bashed the NDP about them, right?

            Again, I just don't think the Liberal position on this issue is sincere. You and a few other kumbayah types want us to think differently. It's your right, I guess.

          • Orson Bean

            I really don't get this "tax cuts for profitable corporations" mantra. It's one of those standard talking points that often goes critically unexamined. Consider what it would mean if the same "reasoning" were applied to personal taxation. The assumption seems to be that if you are "profitable", then there is no way in hell that you should ever have your taxes reduced. Presumably they should only either be increased, or stay the same. So, as an individual, if you are "profitable" (i.e., you are not actually losing money, going bankrupt or otherwise insolvent), you never ever have any cause to complain about your level of taxation, and you should only ever expect your taxes either to go up or at best, stay at the same level. In my humble view, that's nuts.

          • Tybalt

            But my dear boy, corporate taxes *aren't* the same as personal taxes. All of a corporation's spending (with a few tiny exceptions) no matter how silly or wasteful, is entirely untaxed. Only profits – what they clear above such expenses, and either retain or dividend – are taxed.

            With you or I, the humble serf class, every dollar that comes in gets taxed (no matter whether it goes on suits or overalls for work, rice and milk to keep body and soul together, or toys for the kids). That is the difference. Corporate taxes come out of the gravy. Personal taxes are cut from our flesh.

            If personal taxes only came out of our savings, then we would be talking about the same thing.

            I would also note, at the risk of stating the blindingly obvious, that pointing out that tax cuts benefit only profitable corporations, is not at all the same as saying that we should never have corporate tax reductions. Of course, one may legitimately wonder about the sagacity of such cuts in the face of the monstrous and trivially irresponsible deficits our governments currently run.

          • Orson Bean

            I realize that there are significant differences in the basis on which individuals and corporations are taxed. Of course they're not "the same". The point of my post was more in the way of getting a discussion going. I guess my objection to the talking point/rhetoric has more to do with its subtle (or not-so-subtle) implications and connotations, which seem to suggest that if you're "already profitable", there is ipso facto something wrong with reducing your taxes. It's the automatic assumption in there which I object to. There can be many reasons why it's still a good idea — or not a bad idea — to reduce taxes on businesses which are "already profitable". I still maintain that the basic premise behind the talking point is that once a business has achieved profitability, there is no longer any justification whatsoever for having its tax burden reduced — and I think such a premise is grossly simplistic, to say the least.

          • Tybalt

            The point of your post was to offer an intentionally false equivalence in order to stimulate discussion? Back where I come from, they call that trolling.

          • Orson Bean

            If I had an opportunity to re-do my original post, I would have worded and argued it differently. I think that most regular, clinically sane visitors to this board who are familiar with my history of posting here would never characterize my posts as trolling.

      • Amateur Hour

        PS: I learned about the Canadian Council of Chief Executives position via the National Post.

        • Leo

          Here is more from the NP – nice simple, logical, easy to read explanation.

          Abolish the corporate tax — only real people pay taxes

          By Maxime Bernier http://fullcomment.nationalpost.com/2010/05/26/a-…

          • Loraine Lamontagne

            If we are to become a tax haven I want the palm trees.

          • Leo

            Lol, we came close…..Canada's Caribbean ambition
            http://www.cbc.ca/news/background/turksandcaicos/

          • Amateur Hour

            Une république de banane sans bananes.

          • Jan

            Given that we have a huge deficit to deal with, surely taxation should be on the table. Unless we're sticking with the old bromide – all taxes are bad. Time for that adult conversation.

          • John.K

            First, find a quorum of adults in Parliament…

          • EeeOar

            For reference the 2010 federal budget indicates that for the 2010-2011 time period

            Personal Income Tax 117B
            Corporate Income Tax 25.5B
            GST 27.3B

  • Dot

    Amateur Hour raises some good points. Those that follow two of Aaron's Year in Ideas people Stephen Gordon and Mike Moffatt http://www2.macleans.ca/2010/12/23/the-year-in-id… over at Worthwhile Canadian Initiative blog will note I have been challenging them for quite some time over this point.

    I've gotten a lot of theoretical studies, and standard economic jargon, but I remain unconvinced that continuing on with corporate tax cuts, devised long before the latest severe recession and $56 billion deficit, is the right move today.(That is not to say I favour the Liberal policy of more social spending with the cancelled corporate tax cuts)

    My last unanswered blog posting on this topic over there:

    Say, I have a couple of questions for …SG or anyone else familiar with what happened in the 90's.

    It looks like, from the graph, the Paul Martin austerity budget of '94 had a slight increase in CIT. What was the rationale for that? Or was it some program expiring?

    Also, in terms of corporate investment in equipment to enhance competitiveness/productivity. Mark Carney in his press conference the other day suggested that in discussions with some Can corporate heads/reps it was well understood by them that investment in equipment was necessary in the short to medium term. With the dollar near parity, and with BOC rate at around 1%, corporations flush with cash or cheap debt financing, CIT rates at 18%, has there ever been a better time to make these types of investments? It strikes me that an additional 1.5% – 3% CIT cut would not necessarily get one past the invest/no invest tipping point (although, every little bit counts).

    Any qualitative/quantitative historical context to add?

    The graphs and SG's blog on historical tax rates are interesting to read, as well as other comments. Worthwhile reading for those interested beyond the superficial level: http://worthwhile.typepad.com/worthwhile_canadian…

    • Jenn_

      Finally, someone who is looking at the issue as an issue instead of something to bash another party over the head with.

  • Orson Bean

    I think it would be interesting to hear from a credible Liberal Party insider (or, in the alternative, Wells) as to what the Liberals' strategic thinking is on taking this stance.

    Or do they just think it's important to be seen to want an election, when in fact they really don't want one? Or do they really want to have an election?

    I'm so confused . . .

  • gar

    This once more shows the stupidity of the Liberal leadership.Do they really believe that this B.S gets to the average Canadian?They will now be forced to vote against the budget and the NDP will probably do the same.They have boxed themselves in a corner.NDP voters will not cross over to the Liberals and vote for the party that is always calling for corporate tax cuts.Middle of the road Canadians see this as a complete Liberal sham.Should the government fall they will come back with a majority.What ever happened to little Ralph Goodale and his middle of the road buddies who are now about to get their death wish from millions of Canadians who work for this large companies. No tax cuts No increase in salaries and some staff cut backs it is a sure thing.

  • psiclone

    If the tax cuts take place as of Jan 1/2011 – that means the Liberals want an election by running on a plank in their platform that means ' RAISING TAXES ' ROFL – HAHAHA – no way Jose could you imagine trying to untie the ol Tax and Spend Lib theme after all they supported Harpers past budgets so the NDP would have a clear bulls eye from the left and Harper a clear bulls eye from the right and considering the latest CROP Poll from Quebec no sane person would give any support whatsoever to the LPT for an election any time soon -

  • EvInOz

    Reading between the lines, it is pretty apparent the Liberals don't want an election, and are goading the NDP to support the government. This has been a back and forth thing ever since the second year the Conservatives were in power (the Liberals gave the Conservatives a 1 year honeymoon when they had that looooong leadership campaign).

    In other words, the Conservatives are right where they want to be, in a situation that they are unlikely to be defeated and in control of when the next election will be. Personally, I don't think it will be the budget that will be the cause of the next election (unless there is something really unsavory). I think the Conservatives will call an election in late March or April without any budget vote. The opposition isn't in any position at the moment to make gains (aside from some shifting of swing seats), while the Conservatives conceivably have the ability to pick up a few and make a go at a weak majority government. I think it is a longshot for the Conservatives to get a majority, but having an election in the spring with the NDP and Liberals failing to make gains would probably cause leadership conventions for both parties, throwing things into disarray for the opposition party for probably another two years at least. An election in the spring would tap out the funding sources for the NDP and Liberals, as would a leadership convention. By waiting until fall 2011, the Conservatives risk a well funded campaign by the opposition, and possibly risk a decisive issue to pop up in the intervening time.

    • Orson Bean

      I also wonder about the Liberals and NDP tripping over one another over this corporate tax issue. For one thing, I fail to see how the Liberals could ever hope to make significant gains at the expense of the NDP on the issue of corporate taxes. I just don't see how the Liberals could reasonably expect to out-NDP the NDP on this. And who else's lunch (but the NDP's) could the Liberals be trying to eat with this strategy?

  • JDot

    It's not on..

    ..It just not the LPC turn to support PM Harper.

    • JDot

      er' "It's" just not…

  • chet

    Ahh yes, the evil "corporations."

    Owned by pensions and pensioners, ma a pa retirees, and you and me through mutual funds.

    Who employ us,

    and provide us the goods and services we as consumers demand.

    You get 'em Liberals!

    • Amateur Hour

      The Liberals, supported by Conservatives, cut taxes on corporations by hundreds of billions. This issue today is whether or not to cut them further and whether or not this makes sense given the deficit and other spending priorities for whichever party may end up in government. And you're the first person on this thread to label corporations "evil", Mr. Strawman.

    • Wheredidmyjobgo

      You mean all those jobs that went to third world countries…….and are still leaving …after of course they get/got their gov't $$$$ I mean hand outs…. Or are you talking about the low paying no benefit no pension type jobs that are left

      • chet

        You're right.

        If the issue is a corporation's decision to locate (whether those who are here will stay, or those abroad who will come),

        I'm sure higher taxes will be a great attraction for them. Indeed, we should tax them at 100%. That will ensure their presence here eh?

  • West Newf

    Here's a thought. If you were in a battle and you were planning to attack the enemy, would you declare your tactics before you know for certain what the enemy will do? This is precisely what the Liberals are doing by declaring their intentions on the budget before they have seen it. All Harper has to do is design the budget to make the libs look like idiots for sending the country to an election. If they end up supporting or abstaining they still look like idiots. They make it so easy for Harper to hoist them on their own petard every time. They deserve what they get.

    • Anon Liberal

      So much better to wait until all the other parties have made their intentions clear and then have all the pressure be on the Liberals on whether or not to defeat Harper and trigger an election. I think I prefer the strategy we adopted on the gun registry: show leadership and let the NDP play catch up if they feel like it.

      Ignatieff has said Liberals won't vote for the budget if it contains those additional corporate tax cuts. That makes it pretty easy for Harper to avoid an election if he doesn't want one.

      Thanks for the advice though Newf.

      • AT1

        I'm not sure I understand your reasoning AL. The corporate tax cuts you refer to have already been approved and passed in previous budgets with the help of the Liberals (since some of those cuts will be effective Jan 1, 2012).

        It isn't entirely clearly what you expect in the upcoming budget vis-a-vis corporate tax cuts other than an acknowledgment of their existence.

        Are you suggesting that Ignatieff will be fine with a budget that makes no ADDITIONAL corporate tax cuts?

        • Anon Liberal

          ATI – The Liberal position is that corporate taxes should be frozen at the level they were in 2010, no additional cuts, including the ones slated to be implemented starting on January 1, 2011. And, yes, this does represent a change from an earlier position we had taken. The change was prompted by changing economic/fiscal conditions (mainly the size of the deficit).

  • Dot

    I see PW, SG and AC are engaging in a discussion of sorts on twitter regarding Corporate Income tax rates. This partial post of mine from WCI last May may provide some context (the clip from the KPMG guy is most telling and worth watching)

    O/T – FYI. Interesting debate on TVO's The Agenda Mon. Night. Ideology Part II: Time to Pay More Taxes?. A. Coyne was putting forward basically the same arguments shared on this blog – arguing for continuing lowering of corporate taxes as a means to increasing productivity. He connects his dots around 27:20 on this video. http://www.tvo.org/TVO/WebObjects/TVO.woa?videoid…

    As I have mentioned before here, the problem I have with this argument is: when do you decide that your taxes are already low enough, and how do you know it's not already time to focus on other means of increasing productivity? A q that has largely gone unanswered.

    Coincidently, Wed's Lang and O'Leary Exchange had as a guest Greg Wiebe, Tax Division, KPMG (starts 36:20), who compared compared tax rates across countries. Canada ranked 2nd worldwide (behind Mexico). And with HST being implemented now in BC and Ont, and with further planned cuts (assuming the Conservatives remain in power – target 25%), a lot of the heavy lifting has already been done. In other words, to get further gains in productivity (42:30)- the biggest leverage remaining is elsewhere (ie improving management I would argue – he notes no productivity improvements yet have been seen despite very favourable tax regime). http://www.cbc.ca/video/#/News/TV_Shows/Lang_&amp…

    Original WCI blog here: http://worthwhile.typepad.com/worthwhile_canadian…

    • Amateur Hour

      Thanks for this, Dot. Unlike several commenters bent on fighting political battles from past elections (and leaders), you at least are adding substance to the dialogue about what to do now, how much and for how long vs. other policy options. Your links to these and other discussions and sources are greatly appreciated.

    • Amateur Hour

      Good stuff, Dot!

      • Leo

        Thanks Dot, really enjoyed the TVO. It is a bit like the 20/20 hindsight with the cut to the GST – had they not put this on the agenda they probably would have held off once a deficit became reality. The corporate tax cuts should be just part of the tools. Right now the USA is trying to figure this out.

        Obama Likely to Pursue Corporate-Tax Cut, Way to Pay for It http://online.wsj.com/article/SB10001424052970204…

  • hollinm

    I agree. I would like public policy established that benefits the maximum number of citizens. It is designed properly and achieves the results intended.
    Unfortunately there are so many competing interests and when the government, in good faith, tries to fix something the law of unintended consequences sets in and other problems are created.
    Unfortunately there has always been politics in the setting of public policy. However, times have changed and with the 24 hour news cycle, blogs like this one and others politicians are under the microscope all the time. That is a good thing.
    However, we are rapidly coming to the point that Canadians are now becoming cynical because of the negative reporting done on virtually anything that is being done by the government (this or any other one). So what do Canadians do? They simply throw up their hands and disengage. The world has become a complicated place and there is seldom a one size fits all solution to the problems we face.

  • hollinm

    I just wanted to add one other thing. We keep hearing about the fact that child poverty is an issue. No doubt it is an issue.
    However, what is the public policy solution to this issue which some political parties keep harping on.
    Do we ensure that every Canadian family has income above the poverty line? Some would call that wealth redistribution. How do we deal with dysfunctional families where the money is used for purposes other than direct support for the family i.e. drugs and booze. How do we ensure that those capable of working do work?
    This was not intended to open up a discussion on poverty. However, we were talking about public policy. The gap between the haves and the have nots is growing and how do we address that issue. The questions I raise and most certainly others would need to be considered. Can you imagine the pro and con forces out in full force to influence what that policy would look like?

  • madeyoulook

    or the Bloc could be paid a little HST-harmonization hush money

    The Bloc won't be paid the hush money. The government of Quebec would. And if that's all it takes for "the separatists" to get in bed with the Conservatives, it will be a political trifle. See: Ontario, BC, neither of whom have allegedly-secessionist MPs in the HoC like Quebec does.

  • psiclone

    ROFL ! oh man this is goping to be a hoot to watch Iggy and Jacko each tear each other to shreds … in the meantime Stevie boy must be having a good morning double double and howling with laughter – evil demonic type of course after having a kitten for breakfast :)

  • http://secondthots.blogspot.com Dennis_F

    It is rather funny seeing them engage in this childish pissing match, isn't it? The NDP were the first to taunt the Liberals about supporting Conservatives. Then when they were forced to do the same, the Liberals turned around and heightened their urinary arc, so to speak. lol

  • jonatwitan

    In Second Cup, literally ROFLing all over the place. Now I'm embarrassed, but the mental image of Harper laughing evil-ly and eating kittens never ceases to get me!

  • Claudia Lemire
  • westmalle

    Mr Wells: Any chance you could get an interview with M. Stephane Dion? I would love to hear his views on this (irresponsible cancellation of already-agreed corporate tax cuts) and other topics, especially the state of federal (and provincial!) politics in Quebec; the future of the Liberal party in that province; and on developments following the Cancun Conference on climate-change (i.e. no extension to Kyoto treaty post-2012).

  • Claudia Lemire

    One thing that I have come to respect about Dion is how gracious and dignified he has been, not making any comments of any kind, especially those that would get him in the hot seat, smart move by him and I miss him, such a nice man!

    I believe he will have something to say eventually and will be big and explosive, and he and his wife must be having a good laugh with Iggy's leadership skills.

  • Tybalt

    I wonder. I think that like many people (even many of us who are not Liberals) they would be saddened and alarmed by the sudden dearth of sober and responsible people making decisions in the federal Liberal Party. It betokens a bad immediate future when the children have the floor almost unopposed.

  • http://secondthots.blogspot.com Dennis_F

    Uh, are you sure about that?

  • Claudia Lemire

    Oops I forgot about that, but I still stand by what I said, he rarely says anything!

  • hollinm

    And they say Harper lacks the ability to play the tactical game. The opposition is making themselves look more foolish each day. Canadians know if we have the most competitive tax rates in the world it will attract capital, investment and most importantly badly needed jobs for Canadians.

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