Are taxes the only way out of the deficit?

By Andrew Coyne - Tuesday, January 26, 2010 at 10:51 AM - 48 Comments

The Great and the Good have come down from on high, and delivered their decree: there shall be tax hikes. The deficit that was once our friend is now our enemy, no longer “stimulative” but “structural.” The spending spree that gave us that deficit cannot be reversed, or not altogether. If the deficit is to be slain, it must therefore be by raising taxes. Thus sayeth the elders, including former Bank of Canada governor David Dodge, two former deputy ministers of finance, and Jeffrey Simpson.

Well, maybe. What is certainly true is that the fiscal forecast, once an unbroken line of surpluses as far as the eye could see, has darkened considerably. Not only is the deficit headed for $56 billion this fiscal year, but it will still exceed $11 billion even four years from now. And that’s on the government’s cheery numbers. The parliamentary budget officer forecasts the 2014 deficit at $19 billion—after four years of (assumed) steady economic growth. Just in time for the next recession to blow it sky-high again.

Continue…

This Week: Good news/Bad news

By macleans.ca - Friday, November 27, 2009 at 10:45 AM - 3 Comments

A week in the life of twilight
Ladies and gentlemen, we have a new box-office champion. The Twilight Saga: New Moon grossed $72.7 million on its first day in theatres last Friday—the previous best was The Dark Knight’s $67.2 million. Screaming teenagers lined up for midnight screenings to find out what would happen to vampire Edward and vampire-lover Bella (though most already knew the outcome from reading and rereading the novel). Said teens then proceeded to scream throughout the movie.

GOOD NEWS

Tough on child porn
The Harper government introduced a smart new bill aimed at curtailing child pornography on the Internet. Under the tough legislation, Web-hosting companies and Internet service providers that fail to report pornographic content on their servers would be punished. This is the most logical way to get to those vile people who post child porn online: service providers are the closest link to unmasking this underground scourge, because they, in effect, carry the content (even if they don’t know it). If ISPs are scared into cracking down on what appears on their servers, the battle against child porn will be half-won already.

Bittersweet swap
Israel and Hamas appear to be closing in on a deal that would see the Palestinian terrorist group release Israeli soldier Gilad Shalit, who was kidnapped by Palestinians in June 2006. Israel would offer 1,000 Palestinians currently being held in Israeli jails in return, including alleged murderer Marwan Barghouti, currently serving five life terms in an Israeli prison. The swap, should it happen, would be bittersweet for Israel: while Shalit’s return would be cause for celebration, Barghouti would likely assume a top leadership role in Fatah, and perhaps replace the moderate Mahmoud Abbas as Palestinian leader, a move that could bring Fatah and Hamas together. In the long run, then, this deal could actually hamper Middle East peace.

GST, American-style
Does America need a GST? Some economists are now arguing that instituting a federal value-added tax could be the answer to bringing down America’s huge deficit. This won’t sound like good news to consumers—Americans will certainly find a VAT-style tax just as annoying as Canadians find the GST—but it makes good economic sense, and deserves to be given due consideration. Let’s hope that aggressive provincial politicians from our side of the border don’t turn Washington off the idea.

Jon & Kate abate
The saga of Jon and Kate Gosselin and their eight young children is, thankfully, over—their TV show, Jon & Kate Plus 8, aired for the last time on Tuesday night after three seasons. We were never fans of the older Gosselins—though the kids are inarguably cute to watch—but the public squabbling after their marriage ended earlier this year was too much to take. The parents ended up looking like selfish brats—their kids were the real heroes. Jon and Kate’s messy divorce will surely continue, but at least not in prime time. We expect Oprah Winfrey will find a much classier way to sign off when her show ends in 2011.

BAD NEWS

Vexing vaccine
Swine flu confusion continues. While some experts have opined that the worst of the H1N1 pandemic is now behind us, others are warning against over-prescribing the vaccine. The World Health Organization also seems utterly confused: it’s recommending that doctors give out the vaccine to anyone showing symptoms of swine flu, and at the same time recommends that healthy people with mild symptoms not be given the vaccine. As if that weren’t enough, the WHO also announced on Tuesday that it has seen an unusually high number of severe allergic reactions to the vaccine in Canada.

Election problems
Iraqis were preparing to go to the polls in January, but now it looks like they will have to wait to cast their votes. Parliament has been unable to pass an election law, because of objections from Sunnis that they will be under-represented—and Sunni Vice-President Tariq al-Hashemi has threatened to veto the law. (Iraq’s Kurds have also protested the election on the same basis, though a recent amendment to the election law seems to have satisfied them.) With the United States set to begin withdrawing troops next year, a constitutional crisis is the last thing that the war-torn country can handle. If there is to be success in Iraq, this election must occur on time, and it must be free of corruption. There is no alternative.

Gore vs. Alberta
Al Gore is at it again, and this time he’s inconveniencing Albertans. In a speech on Tuesday, the former vice-president (and almost-president) opined that oil extraction from Alberta’s tar sands presents a serious environmental problem. This after he pasted the sands project in Rolling Stone magazine in 2006, saying, “They have to tear up four tons of landscape, all for one barrel of oil. It is truly nuts. But, you know, junkies find veins in their toes.” We don’t buy Gore’s doom-and-gloom scenario (odd, isn’t it, that his latest funereal pronouncements come right after he released a new climate book), and we hope Alberta’s hard-working population won’t suffer because of his reckless speechifying.

Idol no more
Former American Idol runner-up Adam Lambert embarrassed himself—and offended a whole lot of others—on Sunday night at the American Music Awards.His raunchy performance included pantomimed fellatio and a make-out session with a keyboard player. If you weren’t already convinced that pop music has become more about selling sex and less about actual talent, we now rest our case.

FACE OF THE WEEK

Ad Hoc Parliamentary Reform of the Week

By Aaron Wherry - Tuesday, November 24, 2009 at 11:37 AM - 6 Comments

If the government won’t answer your requests in Question Period, leave.

Frustrated by Premier Dalton McGuinty’s refusal to hold public hearings on the controversial 13 per cent HST, the 25-member Progressive Conservative caucus stormed out of the Legislature’s daily question period today shortly after it began.

“You have lost touch,” Conservative Leader Tim Hudak told McGuinty before the stunt took place, accusing the Liberals of being afraid of a public backlash over the tax. ”If Premier McGuinty is going to show that level of contempt for taxpayers by forcing through the largest sales tax grab in the history of this province without any kind of public hearings . . . we see no point in proceeding with question period today.”

A few kind words for harmonization

By Andrew Coyne - Monday, November 23, 2009 at 4:40 PM - 51 Comments

Do the people leading the charge against harmonizing the sales taxes of B.C. and Ontario with the federal GST imagine this is the first time such a reform has been introduced? Do they suppose the public does?

It would be one thing to attempt to whip the population into hysterics against a “risky, untried scheme” that had never been implemented elsewhere. It would be tiresome—essentially an endorsement of the doctrine that Nothing Should Ever be Done for the First Time—but it would at least be coherent, as demagoguery goes.

But the forces arrayed against the plans to convert the two provinces’ existing sales taxes next July into a broader, GST-style value-added tax—a ragtag army of special interests and opposition parties that includes the federal NDP and the National Citizens Coalition, the Ontario NDP and the Ontario Progressive Conservatives, the B.C. NDP and Bill Vander Zalm—must confront the troublesome fact that four provinces (Quebec, Nova Scotia, Newfoundland and New Brunswick) have already done so, without ill effect. And not only them: at last count, 143 countries around the world had implemented similar value-added tax regimes. Not one of them has renounced them.

Continue…

It's the GST, stupid

By Aaron Wherry - Friday, November 13, 2009 at 3:55 PM - 45 Comments

Stephen Gordon tries to figure out the federal deficit.

And here we have an explanation for the structural deficit: the cuts to the GST. Each percentage point of the GST generates about $5b-$6b in revenues (the figures above are net of the GST rebate), so the gap between what current revenues are and what they would be if the GST had stayed at 7% is about $10b-$12b – which is also the PBO’s estimate for the structural deficit.

Time for Ignatieff to take a chance

By Andrew Coyne - Friday, October 16, 2009 at 10:20 AM - 83 Comments

It is true in politics, no less than in physics, that for every action there is an equal and opposite reaction. Michael Ignatieff, as is well known, has seen his popularity nosedive in recent weeks, when it seemed he could not put a foot right. Very well: if he is smart, he can turn that to his advantage, using the very speed of his decline to propel his rebound. Reculer pour mieux sauter and all that.

There is a script for this. If listening to his advisers, playing it safe, taking no stands, guarding every word has brought him to this humiliating low, then the way is open for one of those Hollywood moments, where the candidate rips up the speech that has been prepared for him and speaks from the heart—when he sheds the ingratiating poses of “politics as usual” in favour of his authentic self. Of course, it helps if that is, in fact, what the candidate is up to. Continue…

How we got from there to here

By Aaron Wherry - Tuesday, October 13, 2009 at 8:24 AM - 110 Comments

The Star sorts out how the federal books got the way they are.

Taking over the reins of government in early 2006, the Conservatives were bequeathed a $13.7 billion budget surplus by the Liberals. But by last January, the fiscal cupboard was nearly bare. Even before this year’s economic rescue package, Ottawa was poised to overspend its budget by $15.7 billion, according to Finance Canada documents …  This situation results from the Tories’ decisions to sharply reduce sales taxes and lower personal and corporate income taxes while simultaneously allowing a relentless upsurge in Ottawa’s spending. The Conservative budgets in 2006 and 2007 were notable for their largesse. The government committed to such large spending plans as $5.3 billion for defence, $39 billion for cash transfers to the provinces and $3.7 billion for a new baby bonus.

Beginning in 2006, the Conservatives cut the Goods and Services Tax, in two steps, to 5 per cent from 7 per cent, a move that now costs $11 billion annually in lost revenue … Besides lost GST revenue, the government as of this year is also foregoing $15.3 billion as a result of personal income tax cuts and $7.1 billion from corporate income tax reductions. In all, Conservative tax measures have trimmed Ottawa’s revenues this year by $33.9 billion…

Two-part harmony

By Aaron Wherry - Wednesday, October 7, 2009 at 1:24 PM - 45 Comments

Jack Layton, in QP yesterday, wondering if Stephen Harper agrees with his previous self.

Mr. Speaker, the NDP was opposed to the GST when it was first brought in, and we have opposed the HST for a long time. Other members of the House used to oppose the HST as well. Let me quote from a member who is an economist: ‘This harmonization of the GST, this tax collusion between provincial and federal governments, is not the way to reverse the economic decline of this country.’ Who said that? That is a quote from the Prime Minister during the inaugural debate on the HST. Why does he now think that this collusion to impose a new tax is a good idea?

Mr. Harper’s full remarks of Dec. 10, 1996 are here.

Ignatieff's HST stance unmurkified? ITQ wouldn't go that far, but it's a start.

By kadyomalley - Monday, September 21, 2009 at 4:07 PM - 66 Comments

Well, in marked contrast to his reaction to being questioned about his HST stance last week, Michael Ignatieff at least now seems willing to admit that he has, in fact, taken a position on the harmonization plan, and even clarifies — albeit in rather vague terms — how his position differs from that of the current Conservative government.

He also confirms that, as “a party of government”, it would be irresponsible of the Liberals to say that they’d “rip up an agreement that has been duly negotiated between a federal … and a provincial government.” That doesn’t, however, mean that, as prime minister, he wouldn’t sit down with those provincial governments to discuss any “problems in the application” of the existing agreement in order to make it “fairer and more equitable for Canadians.”

On the other hand, he still didn’t have an explanation for the Three’s Company-calibre communication meltdown that apparently occurred between OLO and Queen’s Park over where, exactly, his party stood on the HST deal with Ontario, although in his defence, nobody asked him for one.

Anyway, here’s a quick and dirty transcript — and note that the first question is from none other than Colleague Rich Madan of CityTV: 

Question: Last week the premier said he would ask you to clarify your position on the harmonized sales tax. I’m wondering, we have you here in Toronto today — could you clarify whether you support or don’t support the introduction of an HST in Ontario and British Columbia?

Michael Ignatieff: Look, the HST harmonized sales taxing arrangement was initiated by the Harper government. They have sought the cooperation of two provinces. There are a couple of problems. The first problem is, there is no national plan. So Mr. Harper as usual is playing one province against the other. The BC plan looks this way. The Ontario plan is different. We would have done that differently. We think this is one country. And if you’re going to do harmonized sales tax, you ought to have a national plan that has consistent national sense, so that’s the first problem.

The second problem is that if this is a deal done by the Harper government and the McGuinty government and the Campbell government and we come into office, we’re a party of government. We’re serious, professional people. We are not going to rip up an agreement that has been duly negotiated in — between a federal government and a provincial government but — and this would be my third and final remark — in those cases where there is still unfairness, there is still problems in its application, we would listen carefully to the provincial government’s concern, and see what we could do to make it fairer and more equitable for the Canadians and the provinces concerned.

Question: I’m going to ask a follow-up to Mr. Madan’s question. We know what you were saying what would you do but where do you personally stand on this agreement between Prime Minister Harper and the governments of British Columbia and Ontario? Where do you stand on this issue?

Michael Ignatieff: My view of this is — look, Mr. Harper decided to push sales tax harmonization in the middle of a recession. He got two provinces to agree. The right way to do this is to get a national plan with a harmonized sales tax proposal that makes sense for all the provinces. Instead, he’s playing one province against the other. That’s problem number one.

Problem number 2 is, were we in government and this sales tax is in place and the harmonization has occurred, it’s just not responsible for a party of government to say, well, we’ll tear it up and go back to ground zero. What we can do and what we can say to Ontarians and British Columbians is if there is unfairness, if there are problems, if there are things that are really hurting the local economy, of course we’re going to sit down with the province and say, can we correct this? Can we help? Can we make this fairer for Canadians. That, I’m prepared to do.

Jim Flaherty Maverick Watch

By Aaron Wherry - Saturday, September 19, 2009 at 11:20 PM - 28 Comments

Days after a report that he’s been told to zip it, the Finance Minister dares express his personal opinion on sales tax harmonization.

Harmonization of the federal GST with provincial sales taxes remains the most important thing provinces can do to improve their competitiveness, says Federal Finance Minister Jim Flaherty.

“It’s good longterm economic policy for the people of Canada,” Flaherty said in Brampton, Ont., on Friday at the launch of the city’s new rapid transit bus service called Zum.

The Commons: And that's when the nuns started yelling

By Aaron Wherry - Wednesday, September 16, 2009 at 7:53 PM - 47 Comments

The Scene. Dominic LeBlanc was speaking in his grand stage voice, the sound of his second question filling the chamber, when the shouting started.

In the first row of the north visitors’ gallery, three nuns, or at least three women clad in the outfits of nuns, were chanting something unsavoury about the seal hunt, each holding a banner that read “The Seal Slaughter is a Bad Habit.” Get it?

The Speaker called for a pause in proceedings and all turned to gape at the spectacle. While security officers struggled to contain the invaders, Conservative Steve Blaney stood and held aloft a binder, apparently wrapped in seal skin. MPs stood to applaud their colleague’s brave choice of office supplies. Liberal Gerry Byrne crossed the floor to happily shake Blaney’s hand.

Security eventually gained control of the situation—the nuns handcuffed and carried away, each still yelping their protests as they were shown the door—and the Speaker called on LeBlanc to continue his casting of aspersions on government efforts to ease trade between Canada and the United States.

It has only been three days and already it has been a fine first week back for our 40th Parliament. Continue…

Shush now, Jim

By Aaron Wherry - Wednesday, September 16, 2009 at 11:44 AM - 29 Comments

Jim Flaherty, March 30. Last week, Ontario’s Liberal government, after objecting to the combined tax for years, decided to switch. Ottawa agreed to help Canada’s most populous province with that move by giving Ontario one-time compensation of $4.3 billion. ”I think this is very good economic policy,” Flaherty told reporters in Ottawa Monday. “This is a massive tax cut, a $5 billion tax cut for businesses in the province of Ontario and that means job creation and investment in the province of Ontario. So, this is very good economic policy over time.”

Toronto Star, today. Finance Minister Jim Flaherty and fellow Conservatives are distancing themselves from the harmonized sales tax as public angst grows over the price hikes it will mean on everything from fast food to funerals … federal Conservative sources have told the Star that earlier in the summer, officials in Prime Minister Stephen Harper’s office ordered Flaherty to tone it down. ”They asked Jim to stop talking about (the tax) so much because it’s not helpful,” said one insider.

Michael Wilson, outgoing ambassador to the U.S., on Afghanistan, stubborn myths of 9/11 and why Americans are so easy to talk to

By John Geddes - Thursday, September 10, 2009 at 10:40 AM - 0 Comments

Michael Wilson’s 3½-year run as Canada’s ambassador to the United States ends this fall with the appointment of former Manitoba premier Gary Doer to the post. Wilson’s stint as the country’s highest-profile diplomat rounded out a remarkable public service career. As Brian Mulroney’s finance minister for seven years, and later minister for international trade, he was an architect of the GST and NAFTA. He’s also been a senior financial executive in Toronto.

Q: When you became ambassador in 2006, you already had long experience at the top level in Canadian politics and business. But Washington is on a whole other level. How did you find your feet there?

A: I had a number of people who I had dealt with during the ’80s and early ’90s when I was in government, so I had those contacts to start with. But the importance of the relationship between the two countries—we’re neighbours, largest trading partners, very close on foreign policy issues—means as Canadian ambassador you get exposed pretty quickly to a lot of people as you get into the job.

Q: Don’t you need to get all the right party invitations to fit into the Washington social swirl?

A: The social swirl, as you describe it, is not what I think some people think, that we go down there and we spend a lot of time with cocktails and canapés. Yes, there were parties, there were dinners and receptions that you would call social affairs, but they certainly did not dominate my time after hours, by any means.

Q: Who made a big impression on you?

A: There was a range of people there, and people that I very much enjoyed talking to and getting their views on things. Brent Scowcroft is one of the early ones that I went to, and he’s been around for a long time. Colin Powell is a very interesting fellow. Jim Jones, I got to know him before he became the national security adviser, so he was a very interesting fellow to talk to with his background. Some of the journalists in Washington are outstanding. David Ignatius of the Washington Post is one who I always thought was terrific. Martin Wolf from the Financial Times was always very good. Paul Volcker, I knew him back when he was the Federal Reserve chairman, so I enjoyed talking to him.

Q: What was your first day on the job like?

A: I arrived on the night of March 12, 2006. I got into the office at 8:30 in the morning. I was told I had a meeting with the number three person in the state department, Nick Burns, and he took me through the credentials process and said, “You should be at the White House at two o’clock.” I went through the credentials process with President Bush. At that time he said, “Look, we got some things we gotta do to improve the relationship between the two countries. The first of these is softwood lumber. Let’s get that one behind us right away.”

Q: And you hammered out a softwood lumber deal. But what about the other irritants, especially the border?

A: The relationship, as it has evolved on the management of the border, it’s awkward, it’s complex, but it is better. The Western Hemisphere Travel Initiative had been announced prior to my arriving there, and we were very concerned that there would be a lot of disruption and congestion at the border because we could see that the U.S. weren’t going to be ready and neither were we. We worked with the Bush administration to stretch out the time for implementation, and again worked closely with the Obama administration for the actual transition. Now, is it perfect? No, it’s not perfect, because there has been a decline in traffic. It’s hard to tell what’s related to the passport issue, what’s related to economy and what’s related to the strength of the Canadian dollar. But behind that the tone of the relationship is clearly better.

Q: How has having Canadian troops fighting in Kandahar coloured the relationship?

A: I’d have to say that the most important thing in the time that I was in Washington is our presence—both on the military side as well as on the development side­—in Afghanistan. That is clearly the best calling card that I had, whether I was meeting with people in the administration or people in Congress on either side of the aisle, and I’d hear it when I travelled around the country. It was highly appreciated and highly admired.

Q: Are you worried the Canadian government’s decision to withdraw from combat in Afghanistan in 2011 will cost Canada that cachet?

A: It is something that the incoming ambassador, Gary Doer, will have to address. I think the government­—I think Parliament—will have to address this, because there are implications for us. Obviously, there are implications for the relationship with the United States, there are implications for the relationship with NATO. So this is an issue that’s going to be front and centre for the government, for Parliament, for some time, as to how we handle this in a way that doesn’t undermine the terrific goodwill that we have.

Q: Should the government revisit the 2011 withdrawal date?

A: The indication is clear that the military presence is going to diminish significantly in 2011, but we will have people there. We have people from development agencies and we have to provide some form of protection for them.

Q: But do you think the decision to pull out of a combat mission is irreversible?

A: Well, that’s clearly the position that the government has stated. Now, I think that it is an issue that the government will have to address. We have built this strong position on the national security side as it relates to Afghanistan. Are there other things we can be doing in the world out there that will replace this, and do it in a way that maintains that strong position that we have built up? And that debate certainly has not taken place.

Q: As a veteran now of both capitals, how would you describe the difference between the cultures of power in Ottawa and Washington?

A: It’s night and day. Every country recognizes that the United States is their most important relationship. Well, if you’re sitting in Washington as a senior official in the administration, you’ve got all those countries there looking to you as their most important relationship. It’s one of the most interesting parts of being in Washington, how we fit Canadian national interests into that environment.

Q: So what’s the answer? How does Canada make its interests matter to American politicians?

A: One of the pieces of advice that I pass on to Mr. Doer—I got this from members of the administration—they told me, “The best way you can get to us is to talk to us on a multilateral basis, talk about the global issues. Help us get a better understanding. What are your observations on this issue from the Canadian standpoint, because that is helpful to us in understanding where we fit as the superpower.” And once you get talking to them on that global basis, then when you get around to dealing with the bilateral issues, the discussion moves more quickly.

Q: How frustrating has it been for you to have to deal over and over with the myth that some of the 9/11 terrorists entered the U.S. from Canada?

A: It started back shortly after 9/11 where some of the agencies who have national security responsibilities were trying to deflect the blame, and some of them put out the story that, well, these people slipped in from Canada. But very shortly after, the attorney general at the time said it is absolutely clear that none of the terrorists came through Canada, they came from third countries getting through the normal immigration system that the U.S. had at the time. So it is a frustration, but it’s easy for those sorts of ideas to get embedded in the general thinking of people.

Q: How can Canada fight back against initiatives that come out of Congress, rather than the White House, like the recent Buy America rules?

A: The Buy American thing, that was slipped in a by a couple of senators at the last minute. It wasn’t planned. We were watching because we felt that this was a real risk, and then suddenly it appeared in the final bill and we really had no warning about it except our own intuition. And these sorts of things can happen.

Q: You’ll be leaving Washington early in the Barack Obama era. How do you see his first term shaping up?

A: President Obama has really hit the ground running and has taken on an extraordinary range of issues, to the extent that there is a sense of overload of the system in Washington. The health care debate, the climate change debate, the financial regulation debate—these are very, very weighty issues. And you have these domestic issues at the same time as you have all the challenges that a superpower has internationally.

Q: What impressions of Americans as a people will you be bringing home?

A: The population is quite diverse. That wasn’t a surprise, but it was very interesting to see it and to feel it as you went to talk to people in different parts of the country. The Americans, though—they’re very easy to talk to.

Q: More so than Canadians?

A: I think so, I think so. Their patriotism, their nationalism, their love of politics, their love of sports, their feeling about their religion, their attitudes toward the military, their perception of themselves within the world—some of that is very admirable, some of it’s a little frustrating.

Q: As Canada’s representative in Washington, what are you most often asked about?

A: I guess there’s three things right now. One is health care, and you have people who are scandalized by the Canadian health care system, governments telling us how we should do our health care and so on, but you have other people saying, “Boy, there’s a lot of good things about the Canadian health care system.” The second area is, “How did your banks come through [last fall’s financial crisis] in such a strong position?” And the third area is in the different aspects of the housing markets in the two countries, because they see in Canada less boom and bust.

Q: How does Gary Doer’s background in provincial politics fit him for the transition to Washington?

A: In my experience, he has been in the United States more than any other of the Canadian premiers. There are four former governors in the Obama administration and he knows them all. So I don’t think we should have any worry; Canada’s voice will continue to be heard in many circles both within Washington but also in other parts of the United States.

Q: You’ve had plenty of chances to watch Alex Ovechkin play for the Washington Capitals. Is he better than Sidney Crosby?

A: Oh, they’re both marvellous players.

Q: But Ovechkin’s more exciting, right? Or is it too undiplomatic to say so?

A: Ovechkin, because he’s not with as strong a team, has gotta be a very impressive player.

Jim Flaherty's permanent tax on everything (II)

By Aaron Wherry - Thursday, August 20, 2009 at 7:21 PM - 25 Comments

Jim Flaherty, April 10, 2008. We’ve done our stimulus at the federal level but we really needed the province to do its part, and of course we’re also calling on the remaining provinces that have not harmonized their PST with the GST to work with us to accomplish that goal of harmonization. That would be a great tax burden relief for businesses in Ontario that’s certainly needed.

Jim Flaherty, Oct. 23, 2008. Being from Ontario, as you may have heard, I have a bit of a challenge with my provincial government and I’m gently nudging Premier McGuinty and the Government of Ontario and encouraging them in the direction of reducing the burden of business taxes in that province and, importantly, since that province and a few others are not harmonized, to harmonize the PST and the GST in those provinces, which would be the single most important step that could be done to help relieve the tax burden on business … we need harmonization of sales taxes in some provinces.

Dimitri Soudas, tonight. “If any Ontarian is concerned about this provincial decision (on tax harmonization), they should contact his or her MPP … We said that we would accept the decision of any provincial government to proceed with the harmonization of the sales tax, but ultimately the decision is a decision that needs to be made by the provinces.”

UPDATED: Reno 911: Hold that tax credit!

By kadyomalley - Wednesday, July 29, 2009 at 8:54 PM - 106 Comments

Okay, I admit it —  I just really wanted an excuse to use that headline.

From CBC:

Prime Minister Stephen Harper urged Canadians on Wednesday to take advantage of the home renovation tax credit, even though the credit hasn’t actually been approved by Parliament.

The 15 per cent credit is the subject of a massive advertising campaign and is designed to be part of the government’s economic stimulus package. It could see eligible applicants receiving as much as a $1,300 refund on their taxes if they invest up to $10,000 on improving their homes between Jan. 27, 2009, and Feb. 1, 2010.

The prime minister visited an Ottawa home improvement centre on Wednesday to press the message that Canadians have just six months left to take advantage of the credit, which he said is “a way that every family can participate in our economic recovery.

“There has never been a better time to renovate your home,” Harper said.

The Finance Department intends to introduce the HRTC as a bill later this year.

But a number of things might happen this fall that could derail that plan, such as opposition parties defeating the minority Conservative government and triggering an election, said Keith Brownsey, a political scientist at Calgary’s Mount Royal College.

Brownsey said he feels the credit will be approved, noting that other budget measures have been dealt with in a similar fashion in the past. But he said he thinks the timing of the HRTC is pure politics.

“For me, it’s telling me there’s a election coming up, that the government wants to give a gift to those who renovate their homes and do it quickly,” he told CBC News.

Elaine Foulon, who was looking to buy an area rug from a Calgary flooring store, said she was shocked when she was told the HRTC is not a done deal.

“I don’t understand why it hasn’t passed because they have been talking about this for quite a long time,” she told CBC News.

David Matley, the owner of the store, was so sure the credit is in place, he offered to match it for his customers. Matley said he will live up to his pledge and wants the government to do the same.

He added he doesn’t appreciate the fact the Harper government is spending taxpayer money on ads promoting the credit while he has to tell his customers there’s still a chance it won’t be there for them.

Now, call ITQ crazy — really, do it; it won’t even be the ninth worst thing she’s been called today — but isn’t there actually a House of Commons rule about spending public money to promote legislation that hasn’t yet been passed as though it’s a done deal, since it’s sort of abrogate-y of the role of Parliament? Didn’t the Mulroney government have its knuckles rapped by the Speaker for doing pretty much exactly the same thing by running ads before the GST had actually gone through? Or is ITQ hallucinating again? (It’s been a long day, so that’s a distinct possibility.)

UPDATE: The perennially helpful Mike Storeshaw over at Finance, who, ITQ is obliged to note, did once mock her in his Hill Climbers columnette, but who has subsequently been forgiven because she eventually forgot about it, sends along the following clarification:

To be clear, the Home Renovation Tax Credit does have parliamentary approval, via the passage of a Ways and Means motion that accompanied the Budget.  It is fairly commonplace for tax measures like this to proceed this way, allowing the Canada Revenue Agency to begin administering the change immediately upon passage of Ways and Means, and having it fully legislated by amending the Income Tax Act at a later date. Notice of ways and means was in the Budget document starting on page 335, or you can find it here.

In a subsequent conversation with ITQ by phone, he confirmed that if the as-yet-not-officially-introduced measure were to be explicitly defeated by the House, that would, in fact, render the promise of a tax credit null and void; it’s not actually clear what would happen if there was an election between now and next April, when it would – in theory – be claimed by those filing their 2009 tax returns. Presumably, if the Conservatives were returned to power, they’d just go ahead with introducing the legislation as planned; if another party formed government, it’s not clear whether they would have to explicitly cancel the credit, or whether the claims would be processed even without formal legislation to enshrine the program.

Your next minister of finance

By Aaron Wherry - Friday, July 24, 2009 at 3:53 PM - 5 Comments

Celebrity contractor and owner of many sleeveless shirts, Mike Holmes, makes pitch for government tax credit and upstanding guys like him. To reinforce Holmes’ point, newspaper editors put headline “Go with the pro” above photo of Prime Minister famously struggling with a nail gun.

'I don't believe any taxes are good taxes'

By Aaron Wherry - Friday, July 10, 2009 at 10:23 PM - 46 Comments

The Prime Minister laments the tyranny of taxes, thanks you for paying them.

Reguly: Where are you going for your holidays this year?

Harper: I’m going to stay in… I usually spend most of my free time at Harrington Lake. The taxpayers provide me with a beautiful cottage and summer property so we… we vacation within the country.

Taking aim at Ignatieff

By Aaron Wherry - Thursday, May 28, 2009 at 10:00 AM - 6 Comments

In the coded language of official Ottawa, they are known as SO31s. It’s a reference to Standing Order 31 of Parliament, which allows that 15 minutes be set aside before question period each day for MPs to stand in the House and make brief remarks about a subject of their choosing. For the most part, members use the time to salute constituents, celebrate charitable causes, mourn sad occasions or pontificate on matters of national or international importance.

When they still had Stéphane Dion to kick around, the Conservative government took great pleasure in mocking the former Liberal leader before he rose to ask another awkwardly worded question of the Prime Minister. And though they waited a few days before doing likewise with Dion’s successor, a steady succession of Conservative backbenchers has been sent up to denigrate Michael Ignatieff or his party since he took the leader’s chair. Indeed, despite an attempt recently by the Speaker to limit personal attacks during this time, government MPs have used more than 100 of these statements to needle the Liberal side in the 12 weeks since Parliament returned in January—a concerted campaign that reached a particular low when Ron Cannan rose on the afternoon of April 20 and attempted to segue from a preceding statement of condolence by Liberal Maurizio Bevilacqua about the deadly Italian earthquake.

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Stomach-churning

By Aaron Wherry - Saturday, March 28, 2009 at 1:34 PM - 18 Comments

Dan Gardner on yesterday’s remarks from Ian Brodie.

Of course it’s not news to anyone that the Conservatives put politics ahead of good policy on this, but to see it stated so baldly, so flatly, so defiantly—it is quite literally stomach-churning. Remember this when we look back and ask, “so what did we [do] with all that good fortune?”

'The most depressing thing you'll read today'

By Aaron Wherry - Friday, March 27, 2009 at 3:42 PM - 0 Comments

Adam Radwanski points to John Geddes’ dispatch from Montreal.

Shock therapy

By Peter Shawn Taylor - Thursday, February 19, 2009 at 11:40 AM - 1 Comment

Canadians might find it hard to see any silver lining to the current global recession, or the looming $85 billion in deficits Ottawa plans to spend to get the country out of it. But those concerned about Canada’s competitiveness are seeing some good news. The prospect of economic catastrophe appears to have sparked movement on several contentious issues, and if the trend continues, Canada’s economy could actually emerge from the financial rubble in better shape than ever.

“To see the amount of progress that has been made in the last 90 days on competitiveness issues is actually breathtaking,” says Tom Jenkins, executive chairman of the Waterloo, Ont.-based high-tech firm Open Text. Jenkins was a member of the federally appointed Competition Policy Review Panel which reported last summer on how to improve the country’s economy. Despite his worries about the massive increase in federal debt over the next five years, Jenkins is heartened by the sense of urgency shown by Ottawa and the provinces to implement his panel’s recommendations.

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Willyoubetricked.cons

By Andrew Coyne - Wednesday, June 11, 2008 at 12:10 AM - 0 Comments

Just how weird is the Tories’ new carbon-tax attack site, willyoubetricked.ca? Plenty.

Amid the faux-populist fulminations against the “cosmopolitan elites” who supposedly favour the tax (versus the jes’-plain-folks who would be hurt by it, including farmers, fishermen, cabbies and … economists), the pandering to lefty paleo-greens who find carbon taxes too market-oriented (the tax will “give polluters an unlimited license to pollute,” it claims, which is not only untrue but contrary to acres of previous Tory speechifying to the effect that “carbon is not a pollutant” — which is true), the undergraduate rhetoric (“weasel words”) and grade school humour (farting cows), it will perhaps be overlooked that the main thrust of the piece — that the carbon tax will not be revenue-neutral, as the Liberals claim, but rather is just another in a long line of sneaky tax grabs — is aimed squarely at the Conservatives’ own exposed flank.

Of the six historic examples the Tories provide (click on “Tax Tricks Timeline”), at least four happened under Conservative prime ministers: the income tax (introduced in 1917, under Robert Borden), the gas tax (1932, R. B. Bennett), the corporate income tax surtax (1987, Brian Mulroney), and — most astonishing of all – the GST (1991, Mulroney again). [UPDATE: Make that five of six: the "McGuinty health care premium" introduced by the Ontario Liberal government in 2004 was simply a revival of a tax first introduced under the Conservatives, and scrapped by a previous Liberal government. Another Conservative "health care" tax, the Fair Share Health-Care Levy introduced under Mike Harris, was never repealed, but simply became the Ontario surtax.]

Given this government’s increasingly reckless disregard for the truth, I had thought at first this showed a becoming candour, on the GST especially. That was until I read the accompanying copy. Continue…