When Finance Minister Jim Flaherty stands in his place in the House of Commons next Tuesday afternoon at 4 pm and stares into a packed chamber, his budget speech words will waft a few feet across the green carpet, past the temporary leader of the opposition, and into the ears of Liberal finance critic John McCallum. It will be the first time in McCallum’s political career that he has ever listened to anything other than a Grit budget. I am sure it will kill him.
That crossed my mind as I sat in a breakfast meeting this morning in the dreary conference room of the National Press Club, where McCallum launched his budget attack, without waiting to actually hear the budget. Judging from the attendance – about 20 people, at least 12 of them lobbyists (who go to every breakfast event here), a handful of Liberal MPs, one leadership contender (Michael Ignatieff), two TV cameras and me – it struck me Jim has little to worry about.
The silver-haired critic, distinguished in his private life as a McGill University professor, then Chief Economist at the Royal Bank (all RBC’s lobby folks were there), has unfortunately turned into a one-trick pony. McCallum tried to convince his audience that the Tory budget will be a disaster because it will be cutting the GST by 1%, instead of cutting income taxes by 1%. In fact, tomorrow (Wednesday), the Liberals will try to flat a pre-emptive, two-pronged strike at Flaherty based on that theme.
Liberal senators will be tabling a bill in that chamber to make the temporary tax cut of 1% contained in the final deathbed Liberal budget permanent, and 308 Liberal riding association presidents across Canada will launch a grassroots, “Don’t raise my income tax†campaign, complete with a weasely little petition.
So, I sat there this morning and listened to the guy give a pesudo-academic address laced with works like “prosperity,†“competitiveness†and “innovationâ€, while he completely distorted what Conservatives are about to do. The choice, of course, is not about lowering the GST to save consumers about $5 billion a year, or ushering in a $5 billion income tax cut. Instead, it’s about tax reductions that are targeted across society, and which make sense.
The $1,200 about to be given to every family for every child under six is a tax cut, worth about $1.8 billion a year. Doubling the senior’s pension income amount is a $400 million-a-year tax cut. In fact, when you add these to the list of other cuts that are coming (textbook credit, apprenticeship tools credit, lower small business taxes, sports tax credit, transit pass tax break etc.), Canadians are about to see the cost of living go down by about $10 billion. And that doesn’t even include a surprise income tax cut I am sure Jim has up his Irish sleeve (take that, McCallum…)
Meanwhile this budget is also slated to support farmers, streamline corporate tax, hike military spending, support affordable housing construction, create an infrastructure fund and do a number of other things that will have a direct stimulative impact on the economy.
And, hey, speaking of goosing things, the GST cut will actually put more money into more pockets than McCallum’s precious income tax wiggling. That’s because everybody pays the GST, while many lower-income people are not even on the tax roles. In fact, families who make les money benefit more than wealthier ones from the GST cut since a greater proportion of their income goes to buy stuff that everyday life requires. There is a role for sales axes, but they’re regressive and an erudite dude like John McCallum should get that in a heartbeat.
And I’m sure he does. But this is politics. And he’s on the wrong side.
28 comments ↓
I hope when he gives his budget speech it’s of the calibre of the throne speech. Words like “fundamental” and phrases like “transformative change” should be omitted.
Tell the truth, but tell it slant,
For truth in circuit lies.
Too bright for our infirm delight,
The truth’s superb surprise
Nice David
Poor John has fallen a long way from his lofty perch at RBC, but this is a tiny step up from his apparent ignorance of corporate severance back when David Dingwell “resigned”.
Speaking of budgetary concerns, I noticed the following concerns in an article today. Any comments?
“Low- and middle-income families will realize the smallest net benefit from the Harper government’s $1,200-a-year child-care payment in part because the Conservatives are scrapping a separate assistance program.”
full article
Garth, can you offer some feedback on yesterday’s B of C decision to raise another point, and their accompanying statement? I realize it was in line with expectations, but any further insight you would care to share would be appreciated.
Further, with the Tories increasing their spending, and even with this GST cut coming in, isn’t all of this going to be stimulative, and therefore fuel the fire where further rates hikes are concerned?
Shouldn’t you click your heels together after that speech?
It’s not only McCalum that will be slack-jawed when the Minister reads out the budget. Unless there’s about face in the policies that seem to fly in the face of what an overwhelming number of economists say are bad (GST down, Income tax up is actually a tax hike for most) the majority of Canadians, myself included, will shared McCalum’s look of horror and not because it’s a Conservative budget but because it’s bad budget that already raiding the debt repayment fund.
Editorial in this morning’s Globe:
A ceremony for all
Canada’s troops are in Afghanistan representing all Canadians, and if they die in action, as a number have, all Canadians have a stake in mourning and honouring those who have fought on their behalf. It was both surprising and disconcerting, then, to have Defence Minister Gordon O’Connor bar the media from covering yesterday’s arrival at CFB Trenton of the coffins bearing four soldiers killed in Afghanistan last weekend. A spokesman for the minister said the media would be prevented from covering future arrival ceremonies as well.
Inevitably, there has been caustic speculation about the government’s motives. Liberal defence critic Ujjal Dosanjh accused the government of aping U.S. President George W. Bush, whose administration has imposed a similar ban. The Conservatives, he said, fear losing public support if images of the military ceremony are broadcast — an accusation that would carry more weight if the government weren’t continuing to let the media cover the loading of the coffins onto the military planes in Afghanistan.
For his part, Mr. O’Connor said he barred the media to protect the soldiers’ families. “There is a time to mourn, and we want to respect the privacy needs of the grieving families. The repatriation of our fallen soldiers back to Canada is a private and solemn event between the families and the Canadian Forces.” Again, that argument would carry more weight if Mr. O’Connor had discussed the matter with the grieving families before making his decision. There was no such consultation.
But whatever its motives, the government made the wrong call. The military ceremony is not “a private . . . event” between the Canadian Forces and the families. The private event, if families wish to make it private, will come with the soldiers’ funerals. The arrival of the coffins in Canada is an occasion for all Canadians to reflect on the sacrifice the soldiers made and to share with the rest of the country in a moment of silence. The media are their conduit to the ceremony. This is not some private club to whose activities Mr. O’Connor may arbitrarily bar access. It is in the public’s name that the government has chosen, rightly in our view, to join other countries in fighting insurgents in Afghanistan. It is in the public’s name that the military salutes those who died as they are returned to Canada for burial.
Mr. O’Connor should rescind his ban. The people of Canada should be invited in, not locked out.
Editorial in this morning’s Star:
Harper media ban fails fallen troops
Apr. 26, 2006
When four fallen Canadian soldiers returned home last night from Afghanistan, their arrival should have been a moment of solemn national pride, grief and gratitude for their sacrifice and that of their loved ones. Instead, it became a censorship controversy.
Prime Minister Stephen Harper’s decision to bar reporters and television crews from covering the formal military ceremony at Canadian Forces Base Trenton was a disservice to the troops, their families and friends and the public. His rationale — that the return is a private family matter — is unpersuasive, given the public military ceremonies that surround such transfers. It has been challenged by Tory MPs and the families of fallen soldiers. And his shot at Liberal Leader Bill Graham for “politicizing these funerals” by making an issue of the media ban is beneath him.
Harper has sadly misjudged the readiness of many Canadians to experience the families’ sense of loss, and to show respect and support.
As we said yesterday, Harper was right to order that the Canadian flag fly at full-mast above Parliament and not be lowered each time a soldier is killed. That signals no disrespect, rather that Canada is resolved, as a nation, to stand by its 2,300 troops in Afghanistan.
In the same way, those who fall serving Canada must have full formal public recognition on their return home. That was not the case yesterday.
Cpl. Matthew Dinning, Lieut. William Turner, Bombardier Myles Mansell and Cpl. Randy Payne were seen off from Kandahar with military honours and with the media in attendance. The same military honours greeted them in Trenton. Why could the public not see that, to reflect on their sacrifice and their mission?
It is hard to imagine that the grief of bereaved families would have been sharpened by knowing that a nation grieved with them.
When Harper visited the troops in Kandahar last month, he offered them this assurance: “I am behind you. Your government is behind you. And, most importantly, the Canadian people are behind you.” That pledge of public support does not square well with adopting a version of U.S. President George Bush’s much-criticized policy of barring photographs of the coffins of soldiers returning from service overseas.
What next? Will Ottawa ban reporters from covering troops in the field?
Canadians cannot be shielded from the reality that the Afghan mission carries heartbreaking costs. The Conservatives, after championing open government, may think that dropping a veil of secrecy over aspects of the mission will spare them criticism as casualties mount, and will keep the public and the troops from becoming demoralized. But that is far from certain. Despite Bush’s media manipulation, his approval rating is low.
If Canadians are to support the Afghan mission, they must have all the facts at their disposal. That includes full parliamentary debate at critical junctures, a clear sense of what Ottawa hopes to accomplish, informative media reports from the field and an honest account of the costs.
Harper was initially reluctant to hold a parliamentary debate and is now curbing media coverage. That does Canadian troops a disservice as they put their lives on the line.
Garth – I have a few questions:
-how much is the Federal National Debt?
-how much do we pay each year on interest payments for the Federal National Debt
-how much has the national debt increased since 1993?
-how much has been paid on the principal of the national debt since 1993?
Thanks.
Another perspective on allowing the media to be voyeurs on family grief. From a soldier’s widow.
http://www.smalldeadanimals.com/archives/003897.html
Kudo’s Garth! for capitulating on your previous admiration for McCallum.
Is it my imagination that you are starting to actually realize the CPC already has enough unfair challenges (media) without you adding to them?
It’s tough to be a Conservative in this country…..the opposition and media can’t wait to pounce…I like your new tone Garth…keep it up….
“Kudo’s Garth! for capitulating on your previous admiration for McCallum.”
Sigh, why does everything have to be partisan? Garth has a long history of calling out stupidity, and criticizing the budget before you’ve even seen it is as dumb as the englishwoman wanting the Harry Potter novels banned from schools without having even read them. Even if Garth were a liberal I could see him mocking this one.
“the CPC already has enough unfair challenges (media)”
Personally I don’t think the media is an unfair challenge. In fact, I think you’d find Mr. Harper thinking it’s an absolute windfall for him. Not because the media isn’t biased, but because the general populace themselves are becoming disillusioned with the media. Not only are circulation figures/ratings down almost across the board, but the lack of respect shown pushes others away. Whether you agree with the ban during the arrival or disagree with it (and personally, I feel I should have no say at all, leave it to the families/military to make those decisions), having CTV drive outside the base with a crane and zoom lens, and then having them focus on the grieving faces, shows the media for the vultures they are.
Garth – I guess the media, McCaullum to be precise, are attributing leaks about the budget to you. At least twice today in question period he said “according to the member from Halton” and then went on to berate the Finance Minister and in fact ask him to resign for being incompetant and ripping off the poor. This was all in the context of what “the member from Halton” had leaker about the budget.
More than 100 Conservative members have been able not to “leak” the budget which is also illegal as government budgets can and do affect investors and the stock market. That is why people are embargoed to review the document prior to the announcement. That is also why the announcements are made after the markets close. So let us hope that “the member from Halton’s leaks to the Liberals” was just you throwing a red herring. Let us hope for the credibility of our new government and the entire caucus.
I have no documents to leak!!! I merely blogged here about what I expect the minister of finance to do, based on thelection platform and his comments to date. McCallum desperately needs a new speech-writer. Or a conscience. — Garth
Garth, to be fair, when you say “I merely blogged here about what I expect the minister of finance to do, based on the election platform and his comments to date.” that is definately not how it is presented in the blog entry, in fact, the title “It will contain actions to do the following:” sure says to me these are definite, 100% sure things because I view you as a credible information source, being an MP. If you meant to say “I am pretty sure it will have” or “I suspect it will have” then you should be careful to say so.
The finance minister shares his budget within noone prior to its delivery – that is just a fact of life. But because I trust he will deliver on his major election promises, I am confident in predicting what I did. For the Liberals to try and portray this as insider information is typical partisan bullshit. — Garth
Dear Mr. Turner,
I was sad to see your last article in the real estate news. But than I can understand your workload ! I am a senior and have followed your articles for many years, used your advise on many occasions.Your riding is very lucky to have you as their spokesperson.(We have a former hockey goalie ) It is very rare that a polititian puts the concers of the people ahead of the party line. Seniors have many concerns which are hardly addressed and even less acted upon.
I would like to thank you ahead of time for bringing forward all the issues you mentioned.
Sincerly yours ,
Frank Wimmer
I am a resident in your riding and have to admit that I did not vote for you and I will tell you why. I have no doubt that you are a good MP and I do think you are speaking for the people of Halton in Ottawa, I didn’t vote for you because of the issues that Stephen Harper brings.
One issue I am concerned about is the $1,200 a year credit for children. From the first time I heard this, I felt that it was silly. I live a pretty average lifestyle, have two children under the age of 4 and would much rather have my portion go to a family who is in need of it because they cannot afford daycare. I spend about as much on daycare as I do for my mortgage, but this money is not going to make much of a difference to my finances, where it could make a huge difference in someone else’s. Then I heard on the news this morning that someone who makes $30,000 a year, after taxes is only going to receive about $200 a year, where someone who makes $200,000 is going to receive about $1,000 a year. Now I don’t know much about taxes, but this seems absolutely ridiculous. Can we not base how much is received by the income a family generates? If the money isn’t going to make a big difference in my finances, I don’t see how a family making $200K is going to benefit.
I am also disgusted that the flags are not being put at half mast for our most recent heroes and their unfortunate return. The media coverage issue has been blown out of proportion a bit by who else, but the media, but how ironic is it that the father of one of these men wrote to the government about the issue days before his son was killed. Lets show a little respect for people who gave their lives for Canada.
On a more positive note, lets get the GST reduced which might help people cope with the increasing pricese at the pumps!
In closing I would like to say that you have probably mentioned some of these issues on your website that I have not had a chance to look at yet. This is the first time I have ever written to a politician, only because you always seem to be encouraging people to contact you, so here it is.
R. David
1. To maintain credibility, immediately implement a reduction in GST, but by THREE (3) percentage points now and FOUR (4) percentage points next year. The proposed one percentage point change is simply not worth the administrative hassle and the benefits almost negligible for seniors such as us whose major annual capital expenditures are very low. The Conservative party long wanted the GST abolished; now is the time.
2. Revise the Income Tax Act. Three items in particular.
a) Bring in filing a joint return for married couples. This would eliminate much paper work and the need for married couples who, particularly in later life, hold their investments in joint names, from having to attribute the income from such investments to one spouse or the other or the correct and supportable allocation of such income to each spouse. The record keeping to trace such cash flow is most time consuming, difficult and subject to interpretation particularly for those couples who have lived and worked at times in “community property” jurisdictions.Adjust the tax rates accordingly (brackets). Also would eliminate the current splitting of medical and donations deductions between spouses.
b) There must be an easier way of fairly treating dividends from taxable Cdn corporations than the current nonsense of adding 25% and then later deductions s tax credit. It looks like a “make work” project for those at CRA as well as having a major impact on the OAS via claw back. The changes proposed to increase the 25% and credit would only seem to increase my overall tax burden. Get rid of it.
c) Do not even think about implementing the proposed capital gains deferment nonsense. What a nightmare that would be for both CRA and the taxpayer, his/her heirs and successors! It would cost more administratively than the gun registry.Instead lower the tax rate on capital gains by making the taxable gains 25% of the short term gain (property held less than 1 year) and eliminate the tax altogether for long term gains (held over 1 year).
3. Reduce the income tax rate. Swallow pride and adopt the Liberal line or better still improve upon it.
4. Revise the Passport issuance/renewal system in two ways: a) double life from 5 years to 10 years with no change in cost of issuance. As traveler’s know, the current passport is effectively only good the 4 1/2 years.b) Make the renewal just what it says a renewal and not the same administrative chore as a new application. Reduce its cost to less than 50% of a new filing.
5. While not a Budget item, we would like to see a detailed analysis by the Auditor General of the capital and operating funds that all taxpayers are giving, not voluntarily I emphasize, to all those claiming to be natives/Aborigines. Surely they must be the highest paid group of people per capita in Canada and are holding taxpaying Canadians at ransom with endless court battles, uprisings not to mention their impact on the cost of law enforcement across the land. Total money given to them per year divided by their total population. Where does it all go and what good does it do?
Thanks for “listening”
Don, Sidney,BC
Garth:
As my representative in Halton, please review the following article in the
Globe & Mail and resolve to do your part in stopping (and reducing) the
insanity of increased taxes. Every where I turn I face a mounting tax bill,
be it in the form of income taxes, excise taxes, consumption & sales taxes,
property taxes (so much for Rob MacIssac’s 3% increase, more like 16% when
higher property assessments are incorporated into the equation).
A 1% GST reduction is nice, however it is mere window dressing with a broad
public appeal, and won’t dramatically affect disposable income. And with
these higher taxes, I am certainly not seeing any offsetting increase value
in the services I receive and have been paying for. I am effectively paying
more and getting the same or less in some cases….that’s a 1600% increase
in the Government’s margin.
Finally, what is with all these budget surpluses??????????? That tells me,
that the Government is overtaxing the Canadian public, taking money that
they don’t need. A Government’s fiscal responsibilities do not include
operating at a profit (surplus).
You have been appointed to the prestigious Finance Committee, and I implore
you to use your past experience, intelligence, and the feedback of your
constituents, to effect drastic changes and overhaul to the taxation
mechanisms in this country, as soon as is humanly possible.
Stop the taxation insanity or my next letter will be to my new member of
Parliament……….in Parkdale, because I could not afford the tax burden
living in Burlington!.
Sincerely,
Paul H.
TERRY WEBER
Globe and Mail Update
The total tax bill for Canadian families has risen 1,600 per cent over the
past 45 years so that taxes now account for more of the family budget than
food, shelter and clothing combined, the Fraser Institute said Wednesday.
According a report released by the public policy centre, that increase
translates into an additional $26,792 in taxes for the average Canadian
family.
Over the same period, the average family’s expenditures on shelter rose
1,006 per cent, while food costs climbed 481 per cent and spending on
clothing climbed 439 per cent.
In 1961, the average Canadian family had an income of $5,000 and paid $1,675
- 33.5 per cent – of that in taxes. In 2005, the average family income was
$60,903, of which 46.7 per cent or $28,467 went to the federal, provincial
and municipal coffers.
The report comes just days before Prime Minister Stephen Harper’s minority
Conservatives deliver their first federal budget. Tax issues are likely to
be front and centre in the financial blueprint, with the Tories promising to
make good on a campaign vow to cut the GST by 1 per cent.
The government has heralded the cut as the best way to deliver broad tax
relief to all Canadians. Critics, however, have argued that the move is
likely come at the expense of personal income-tax reductions planned by the
previous Liberal government.
Wednesdays report said income taxes – while the biggest single tax paid by
Canadians – account for less than half of their total tax bill.
In 2005, income taxes made up 32 per cent of the total paid by an average
Canadian family.
“All those other, not so obvious, taxes accounted for the other two-thirds
of the bill,” the Fraser Institute said.
Other taxes paid by Canadians include sales and property taxes, motor
vehicle fees, Employment Insurance premiums and Canada Pension Plan
contributions.
The report also said that the top 30 per cent of families earned 60.3 per
cent of all income in Canada and paid 66.3 per cent of taxes.
The bottom 30 per cent earned 7.8 per cent of all income and paid 4.3 per
cent of all taxes.
By province, Alberta had the lowest tax rate, coming in at 44.5 per cent.
New Brunswick and Prince Edward Island followed at 44.9 per cent. At the
other end of the spectrum, Quebec had the highest tax rate at 51 per cent,
followed by British Columbia at 49.1 per cent. Ontario stood at 46.6 per
cent.
Please honour your election promise to eliminate tax on tax .
Unless the Conservative budget of May 2 includes the elimination of GST in its entirety (not just 1%) on the purchase of gas, I WILL NOT VOTE CONSERVATIVE IN THE NEXT ELECTION.
The citizens of Canada are counting on you to keep your word and give them a break.
Yours truly,
R.Shaw
Oakville
“For the Liberals to try and portray this as insider information is typical partisan bullshit. — Garth ”
I’m starting to like you Turner!
Steve Heath..just curious…lately you have been repeating the phrase “what Garth is saying” “what Garth means” …..have you been appointed GT’s official spokesman? or are you doing your impression of Kreskin?
PS are you old enough to remember Kreskin?
Who?? — Garth
“I WILL NOT VOTE CONSERVATIVE IN THE NEXT ELECTION.”
and then you’ll vote for the NDP. If you’re that concerned with taxes…who else are you going to vote for?
Hello Garth Turner, Maybe i should be sending these comments directly to Mr. Harper. I’m concerned at Mr. Harper’s reference to Iran and Hamas being targets for our watch on terrorism.I think he was referring to the 2 groups in relation to their behavior towards Israel.the statement sounds very much like Mr. Bush speaking.why aren’t we also concerned about Israel’s aggression towards the Palestinians- eg building the wall.
Also, I am shocked at the softwood lumber framework proposal outlined today.I hope Canada will decide against it. Why should US return only 80% of the tarriffs owed to us?Actually we should be asking for interest on the 100%.Also the export tax and cap on trade of lumber with US- sounds like a proposal designed to benefit US, not a fair negociated deal.
Tish, Milton
[...] vious government. But, I am not holding my breath for any “surprise income tax cut I am sure Jim has up his Irish sleeve“. Note: If you have [...]
Garth – I have a few questions:
**** im not garth but here goes
*** these questions may be rhetorical but here goes
check out http://www.fin.gc.ca/fin-eng.html and
http://www.fin.gc.ca/frt/2005/frt05_1e.html#Table1
this is where i pulled my answers
-how much is the Federal National Debt?
**** Accumulated Deficit= Federal National Debt =$500 billion, 2004-05
-how much do we pay each year on interest payments for the Federal National Debt
**** =gross public debt charges, 2004-05, 34.1 billion
-how much has the national debt increased since 1993?
****1992-03 accumulated deficit=$449 billion
2004-05=500 billion
increase of $51 billion
(editorial aside:1996-97 accumulated deficit was $562 billion. annual deficits were running in a $27-39 billion range from 1982-83 through 1995-96. It wasn’t until 1996-97 fiscal year that the deficit was materially reduced)
****-how much has been paid on the principal of the national debt since 1993?
since the accumulated deficit (debt)is higher now than in 1992-93 $0
Thanks.
***** no problem
Hey! Thank you! — Garth
John, I went back and reread my posts to see what you are talking about… I have not been trying to interpret his comments nor put words in his mouth, when I say “Garth says”, that is because I am quoting a post from Garth. And the only place I can find myself saying “Garth means” is when I am trying to figure out what he means, and suggesting different alternatives.
Now, if you’re implying that I have become more supportive of his actions in general? Well, yes, I will agree to that, a lot of things he has done I have approved of, and as you said, how do you not grow to like a politician that calls bullshit when he sees it?
Steve, that’s fair….I just noticed it had become a pattern over the last couple of weeks….as for Garth I too am happy to see the change in his tone….reality can often piss on your parade…..this is what I have been attempting to say to Garth on this blog since Feb….for the good of the party, the PM and Garth….
BTW… almost forgot, yes I remember Kreskin, although to be honest, I remembered him being a deceased celebrity. Just for nostalgia’s sake, I decided to google him, and was surprised to find that not only is he still alive but right on the front page of his official website, “On January 30, 2006, on CFRB Radio, The Amazing Kreskin announced his fourth prediction surrounding the political scene in Canada: “The newly elected Harper and his Conservative Party now in office, will last, at least for two years.”"
So there you go Garth, you’ve got at least two years job security