Have not hung that much with Jim Flaherty, but so far I like the guy. He’s friendly, straight-forward, unflashy, consistent. I remember when he ran to be leader of the Ontario Tories, and gave the only believable speech of the leadership convention, eschewing the podium and actually looking like a real person instead of a suit. Nice.
Jim knows my desire to have some solid input into the coming federal budget, and we’re hooking up on Friday to chat about it. So far I have solicited the views of working Canadians through my syndicated newspaper column, locally in Halton via the media, through a website survey and vote, podcasting and – starting next week – a series of Town Hall meetings.
Like most of my projects, this one threatens to eat me. Today I started sifting through all of the suggestions from across the country – a few thousand of them so far – trying to identify what the common themes are. Obviously Flaherty does not want a 120-page report. Hell, I’ll be happy if he reads five pages, so while everybody’s voice will be included in this brief, Jim will get a quick, hard hit of advice when I am through distilling it all.
So, what am I hearing so far? Here’s a sampling:
Income-splitting (the thing I am hit with the most): “If it was possible to split your income between spouses it would definitely give an equal advantage to those who have chosen to stay at home and raise their children. In a family where both spouses work there may be a few more dollars but I don’t believe the quality of family life benefits. Too many times you see parents frazzled from working and trying to juggle children etc. If families could split their incomes then possibly more parents would be able to stay at home and actually nurture their children instead of picking them up from daycare at the end of a work day. There is not better place for children to be than at home.†– Campbell River, BC
Capital gains: “The proposal that there would be no capital gain taxes, if the capital gain from an investment was to be reinvested within six months is a great idea. I know that one could write volumes about how this simple change could vastly improve the Canadian economy. At the very least this idea alone would save Canadian tax payers millions of dollars and would assist greatly in the potential up-coming retirement crisis that our country appears to be facing.†– Halifax, NS
Retirement savings: “Why has it taken this long for some common sense to prevail? Welcome home Garth! Why can’t changes be made to the current tax system that would allow for todays’ issues? Let’s not wait four or five years and hope that the problems will go away, or be something else. See what you can do, on lowering the tax rate of middle class people’s savings in pensions, RRSP products, etc. when this money is drawn on. If less, of our future saved incomes is taxable, don’t you think that money will come back to the economy all over the country and have a greater spin off effect? Surely, this will benefit everyone on a scale far greater than some political, regional economic program.†– Saskatoon, SK
Income tax: “The rules on taxation should be changed to stop punishing those who achieve a higher salary. We are not rich and already are eliminated by most of the other grants and loans programs so its unfair to also tax us at a higher rate with the bracket creep that exists for those who make over blank amount of money. Tax us all at the same marginal rate. If you make that much more you still pay more but not the “special” increases for being successful.†– Owen Sound, ON
Tax incentives: “It is crucial that the government provide incentives for people who want to help protect the environment and improve urban air quality. Bad air is hurting and killing thousands of people in cities across Canada. Plus it would be a solid investment in the quality of life of future generations. We’d probably buy a hybrid sooner than later if it wasn’t as expensive.†– Halton, ON
Child care: “One of the key election platforms that set the Conservatives apart from the other parties was your stand on daycare. We don’t need a national daycare system. We need to leave money in taxpayer’s pockets and let them determine how best to spend THEIR money. Each of your recommendations goes toward accomplishing the goal of letting me decide how to spend money I’ve earned. I believe past governments felt it was their right to take ever increasing amounts of my money and decide how I should spend it.†– St. Albert, AB
On and on and on and on it goes, with new submissions pouring in every minute. The response is certainly exceeding expectations, and helping to prove my theory that Canadians want to be more involved in political decision-making, not less. This is exactly why the Digital Demcracy initiative will proceed, full-steam (to massacre a metaphor). If people can be trusted to vote for an MP and a government, then surely they can be trusted enough to tell us how they want to be taxed and what we should do with the money.
We may well have needed a smart, aristocratic, superior, gentrified and know-it-all political aristocracy back in 1867 when my great, great uncle Ebeneezer Bodwell was the MP for Oxford. After all, the poor guy had to ride to Ottawa on a horse. Without telephones or a Hotmail account, it was tough to know what the folks back home wanted. Old Eb and the other 227 MPs at the time had to pretty much decide everything.
But today, our digital society needs to change all that, lest politics becomes irrelevant. Yes, we need representatives of the people, but no MP, or prime minister, should ever believe he or she replaces the people. Today we are recipients of their web-enhanced knowledge, their Googling, their online education, their 24-hour news cycle addictions, their rooted opinions and their innate, democratic right to self-determination.
Jim Flaherty knows that. And good on him.
17 comments ↓
Sounds great!
I bet a bunch of post grad economics students would be thrilled to be given an op to assist with the algorithm designs to compile a nifty program that would analyse and compile a report of the input you’ve received.
If you like the idea perhaps have Devin give Dr. D. Andolfatto a holler?
Garth – i’m a supporter, but I gotta disagree with you on some things. I think income splitting without reducing the higher marginal rates is a mistake. I think handing over a $1,200/year “baby bonus” while cutting subsidized daycare is a mistake. The rest of the stuff i can stomach or maybe even agree with, but i’m disappointed with the cheerleader act on the income splitting and cancellation of gov’t funded daycare. Yes, i get that the conservative base thinks that the penultimate goal for all should be one spouse working and the other at home with the kids, but that’s just not reality today. Even with income splitting, there’s not enough left for a family to raise kids in Toronto without some serious lifestyle cuts, and for the low income sector, losing a subsidized daycare spot can mean the difference between working and welfare (i’ve had people quite because they couldn’t afford to work while paying for daycare – they weren’t happy about that and neither was i). Let’s remember that the majority of the votes in the riding were for the liberals and/or ndp, and that Canada as a whole, is a left-centrist country traditionally. Let’s respect the role government has in society, not by default, but by choice. You don’t want to see a “unite the left” movement, do you? In a two party system, there is little doubt that the conservatives would be resigned to the opposition benches 90% of the time.
I can accept that i’m probably gonna lose on this. The spin machine is in high gear on income splitting and the baby bonus. I just wish the discussion was a little more balanced. Come on, it’s not like this is an election platform – Jan 23rd is long gone now. Let’s get back to governing/representing everyone, and not just trying to sell 50% + 1 on the party platform.
Have you asked Flaherty why he’s supporting a cut to the GST when he’s on record as saying it’s a bad idea?
I believe you can best help Middle Class Canadians by concentrating on reforms that help ALL Canadians 1st Garth.
ISSUE #1: PERSONAL BANKRUPTCY IN CANADA
There is a massive problem with Personal Bankruptcy in Canada. And why is this Garth?
AVAILABILITY of CREDIT.
And why is there so much credit available Garth?
Because you can make TONS of money by providing people with money… and you don’t have to PRODUCE a gall darn thing!
Just ask the Banks, Credit Card companies and Payday Loan organizations if you don’t believe me.
Reform #1: Restrict Incentive for Credit Availability
Instead of having the maximum 60% APR interest rate that exists in law today have Jim Flaherty change the existing legislation to read “… maximum 12% APR above the Bank of Canada Rate”.
Ask any competent financial adviser and they will tell you that a 12% return (adjusted for inflation) on you money is a PHENOMENAL return on investment… 60% is just plain ushury as is 30% as is even 20%!
ISSUE #2: OWNERSHIP OF FINANCIAL SERVICES INSTITUTIONS
Financial services are a NECESSITY in Canada. Period.
Reform #2:All Money-Lending Institutions MUST be registered as Not-For-Profit Corporations
Get Jim Flaherty to put into law that if you want to lend money in Canada you must be a NFP… forget this idea that Money-Lending are there for the sole purpose of maximizing profit for their owners (shareholders).
Although it is true that any person can buy shares in Financial Sevice Institutions… not all people do or EVER will buy shares in Financial Institutions because they don’t have the knowledge or the means.
Therefore, to MATCH the NECESSITY of financial services by all Canadians with the OWNERSHIP of financial services by all Canadians…
All Financial Services Organizations should be forced to operate as Not-For-Profit.
The ONLY difference in REQUIRING Financial Service Organizations to be NFPs is that all profits get reinvested back into SERVICING PEOPLE.
That’s a good thing isn’t it Garth?
Nothing elese in the Financial Service Industry needs to be changed at all. Not salaries, not hours of operation, not Executive compensation…
Nothing.
These other things that you are focussing on are nice and good but there needs to be fundamental changes instituted first.
At least that is what I believe.
Help Middle Class Canadians by creating and enforcing reasonable rules with respect to all Canadians NECESSETIES FIRST.
What say you Garth?
Sincerely,
Mark
Before income splitting, at least make it fair for stay-at-home parents by levelling the playing field regarding the child-care deduction. If we both work and pay for child care, I can deduct something like 7000 per child in child-care expenses. If one of us stays home, and provides that same child care directly, we get no deduction. It isn’t fair. The benefit should be the same whether we both choose to work or not. You should have them change the child care deduction to a refundable tax credit and thus balance the benefit.
How about providing a much greator tax break for charitable donations?
People would be much more incented to give.We would be far better off,socially,if everyone supported the needy rather than Big Brother with all their bureaucratic oversight.More cost effective for governments and puts the responsibility back to the people to support the needs of the less fortunate.
Please take income splitting one step further, to a combined/family tax return. My take (and I could be wrong) sounds like one parent needs to have NO income, which would be unfair for those who work part-time or at reduced wages to stay close to home when the kids start school. Let us average our incomes so that a family where the income split is $80k/$20k pays the same as the one who earns $50k/$50k.
Yes, i get that the conservative base thinks that the penultimate goal for all should be one spouse working and the other at home with the kids, but that’s just not reality today.
Mike,
Ahh, the good old days, eh?
I don’t know what the answer is, but there needs to be some acknowledgement to parents who believe that nurturing their children is better than institutionalizing them. Yes, there is a demonstrable need to provide daycare for those who absolutely need it, but how do you do achieve fairness to those that elect to have a stay at home parent?
Child-rearing days are gone for me, but 20 years ago we gave up 50% of our gross income because we felt that nurturing our children was more important than acquiring more ‘things’. It wasn’t an easy thing to do, but we did it.
Nothing bugs me more than to see someone driving an expensive SUV dropping off their kids , knowing that my tax dollar is helping them do it.
We need a system that is fair to all parties, those that financially truly need help with daycare, and those that think it is important to stay at home…
utopia would be a flat tax, and scrap all the deductions. let me decide what I want to do with my cash, be it give to charities, save for retirement, spend it on my kids’ education, whatever.
Think of all the savings we’d have if we could replace that CCRA beaurocracy with a simple % tax. One piece of paper, 2 lines – how much did you make? give us 15%.
Amen, Ed Brooks, Amen. Currently making the sacrifice, worth every cent and more, yet I have co-workers who have rationalized SUV’s as necessities in their confused, material, stuff-filled but empty lives.
Income splitting would be wonderful and fair.
I am tired of having to pay more in taxes simply because my family income splits differently than the next couple.
There is not good reason for it.
The Conservative Party will go down in my estimation if they avoid the issue of income splitting, so good for you Garth for raising it.
I’m also pleased to see you are getting support on the issue from others.
How about something from Joe Clark’s platform of 1979 — mortgage interest deductability.
A counterpoint to Acanuck’s opinion – there is really no such thing as family income. when i hire someone, i’m not hiring them & their spouse. i don’t ask for two social insurance numbers. people whose “family income” splits differently from the next couple have made a choice to have one spouse unemployed or underemployed. i didn’t tell someone to stay home, but now lowering their tax rate means i pay more. it means i must wait longer for tax relief – why is it fair that tax cuts are coming for married people (who already get breaks that i don’t get) but not single people? time for a flat tax…
Garth, you have mentioned that you would know the cost to the government for an income splitting program soon. I’m sure many of us would be very interested to see those figures.
Secondly, my thoughts on national child care…
Personally I don’t agree with a national child care program as it is not equitable:
for parents who choose to have a stay at home parent;
for parents who choose a different child care arrangements: a close family member or neighbour or live in nanny (for those who need to travel) or parents who choose to work different hours or work part time;
for those people who earn a low income and have no small children;
and low-income earners should not be subsidizing upper middle and high income earners.
I would rather see the governments (both federal and provincial) create child care spaces for low income earners at 0 cost only.
One of the reasons I support Mr. Harper’s plan because the 1200 will assist those low-income earners under 35,000 and claw it back for the higher income earners. This is fair!
Overall, the conservative election platform is balanced – a bit of relief for all people (a bit for families, a bit for seniors, a bit for low-income earners, a bit for apprentership, etc).
Also, it appears the federal surplus is on track with the projected surplus.
Hi Garth,
I’m just glad the House of Commons has you back. The country is better off when you’re there.
Scott Brison (is it ok to mention I listened to his ideas when he was running for the Tory leadership?) had one particularly sound idea – eliminating the personal exemption and replacing it with “no tax on first $250,000 earned”. Want to start making headway on such things as Canada’s rapidly growing personal bankruptcies and bringing the 20-somethings into the economy faster? That one change is something Mr. Flaherty and the wonks at Finance need to seriously consider.
Also, consider me one of the sceptical Cdns that sees the focus on writing cheques to parents as only half-a-solution. We need quality daycare spots in this country. We need better salaries for the staff in these facilities. I think we should be funding the provinces to better support daycare but we need to use the feds clout to ensure minimum standards across the country. The Tories’ current focus is on the parents. Call me crazy, but I think it should be on the kids!
And it’s unrelated, but god yes… Emerson should run in a by-election. Give me a break! What happened to following your own principles? I, for one, was shocked that this idea came from Stephen Harper of all people. You think you know a guy and then “wham-o†… surprise!!
Richard makes an excellent point. Dennis Mills and Jerry White (I think) wrote a very interesting piece about a low-rate flat-tax idea. I read it some time ago, but I recall that the name was “A Life Less Taxing.” (Imagine a book like that written be a Liberal, no less!) That would be efficiency. Toss most of the CCRA staff, compliance people, tax lawyers, tax accountants etc. Put them to work gainfully elsewhere in the economy, instead of fighting over who gets and keeps what amount of taxes. Make taxes easy to handle. Good luck, it would be tough to implement, but it is a great idea.
It would be ideal.
Oh, so many comments, so little space.
Income Splitting:
Absolutely a must but it needs to be designed for what it is intended – to give some dignity and fairness for families who choose to have a stay-at-home parent. For example, set a maximum value of say, $40,000 (or the average Child Care worker salary), to assign to the stay-at-home parent. This will ensure that those families with huge salaries (well beyond what it takes for a respectable lifestyle) do not exploit income splitting. This will also mitigate the reduced tax revenue that may be realized by the government.
Child-care:
When our first child was still in diapers and we were expecting our second child, we needed help at home (I could not get time off despite the availability of paternal leave at the time that my employer would NOT give me – but that’s another topic). We applied to family services for someone to help us at home. We had to give them our income, expenses, etc. and they determined what we had to pay out of pocket based on our ability to pay. A novel idea that should be applied to Child-care access.
To Mike On:
“when i hire someone, i’m not hiring them & their spouse” – yes you are! and their family! There is a saying that when you marry someone, you are also marrying their family. The same goes for employers and employees. Keep in mind, that an employee with a stable and happy family life is more likely to be productive, loyal, and committed to employment.
…and this comment:
“tax cuts are coming for married people (who already get breaks that i don’t get)” – maybe for married people but there are not enough financial breaks for families. Income ‘sharing’ would level the playing field just a little. Personally, it is not so much the financial benefits we are after, it is the respect and recognition by the Canadian government that my spouse deserves for making a noble and selfless choice.
A great man once said “the future of humanity passes by way of the family”. It is time the Canadian people and government realize this truth.