The Conservative Budget

[LonelyGhost]

at one time the canadian refiners approached ottawa regarding producing more and better gasoline (less sulpher) and they said they needed a Billion dollars to up-grade the refineries ... the Liberals said No!

so they set up the gun registry instead and blew a billion dollars and didn't accomplish anything nor did they save one more life.

typical politics.

the Con's budget is a bunch of BS ... helps no one and does so at a huge cost.

would have liked to have seen some real balls on those guys with some meaningful income/business tax cuts and leave the blippin GST where it is ... now biz has to spend money again FOR the govt to COLLECT more and consumers don't save enough to offset the income taxes.

i hope they do better on 'law and order' legislation...

 

[Chingada]

socialism is just plain evil*

Does that mean you're in favouring of ending our socialized medical system and reverting to the capitalist system in the U.S. which has the highest drug and medical prices in the world?

If socialism is so bad then does that mean Enron is good?

Don't misunderstand me, I'm not advocating a socialist state and would never want on, but what I am trying to point out is that most political systems have their good points and bad points and condemning an entire system as "just plain evil" is a rather short-sighted view.

 

[Maury Beniowski]

As least a couple of you consider subscribing to the Economist as I doubt there's a better magazine with respect to discussions on these type of issues.

Snob!

OK, I confess; I subscribed to it for about twenty years ending in 2001, and am thinking of renewing it shortly... I still order the great stats publications they put out, and regularly glance at their excellent website. So, I'm a sucker for good reading. Conde Nast is another excellent Brit mag written in a similar form, but that's another story.

...leave the blippin GST where it is ... now biz has to spend money again FOR the govt to COLLECT more and consumers don't save enough to offset the income taxes...

Cutting the GST is a good way to motivate spenders of big ticket items, especially in anticipation of further rises in Bank of Canada's interest rate. However, I see my line of credit has jumped two and half points in the last four months, so I'll be shifting that load into credit cards that carry balances of this sort indefinitely at 3.9%.

 

[Sonny]

So I'll bite, what's so unreasonable about this budget?

The absolutely worst aspect of the budget is the racism towards Canadian aborginals.

I am no fan of Gordon Campbell, but the guy made a positive impression on me by getting all the premiers of this nation and the federal government (Liberal at the time) to finally address the horrific poverty of first nations people. The Kelowna accord was historic, and the money going to solve the problem was meaningful for the first time .... $5 billion over five years.

Harper's Conservatives gutted the accord and are providing only $400 million over two years, which will accomplish exactly what?

The so-called tax cuts are being financed at least in part by screwing Canada's native peoples.... again.

 

[therealrex]

That piece of shit Harper also raised the tax on alcohol to cover his GST cut. The only thing he did right was cut the money to Aboriginals. That system is so hopelessly broken it needs to be completely overhauled otherwise 60% of the funding we put in is wasted or stolen.

 

[David in Van]

Solve the problem.

The absolutely worst aspect of the budget is the racism towards Canadian aborginals.

I am no fan of Gordon Campbell, but the guy made a positive impression on me by getting all the premiers of this nation and the federal government (Liberal at the time) to finally address the horrific poverty of first nations people. The Kelowna accord was historic, and the money going to solve the problem was meaningful for the first time .... $5 billion over five years.

Harper's Conservatives gutted the accord and are providing only $400 million over two years, which will accomplish exactly what?

The so-called tax cuts are being financed at least in part by screwing Canada's native peoples.... again.

What problems were the $5 billion going to solve?

 

[curmudgeon]

The $5 billion (over 5 years) Kelowna Accord was meant to address housing, health, education, civil infrastructure and economic development on native reserves across the country.

http://www.cbc.ca/story/canada/national/2005/11/25/aboriginals051125.html

 

[LonelyGhost]

Cutting the GST is a good way to motivate spenders of big ticket items, especially in anticipation of further rises in Bank of Canada's interest rate. However, I see my line of credit has jumped two and half points in the last four months, so I'll be shifting that load into credit cards that carry balances of this sort indefinitely at 3.9%.

i don't think people are motivated to spend on big ticket items by a measly 1% cut in the GST ...

i would rather have seen meaningful income tax cuts and leave the GST ... people who take home more money are more likely to spend than people who have nothing after taxes and a 1% cut in gst.

the Cons could have simply said "anyone earning 35K or less pays zero income tax" ... this would have been better than the gst cut AND the daycare money AND a cut in gas prices AND the sports fund AND the working deduction combined!

i really believe people should be able to keep what they earn and tax them when they spend it ...

and moreso believe that 'social programs' are a waste of money because they are typically too bureaucratic and duplicate other efforts ... there should be one office to help the poor, disabled, single moms, aboriginals, unemployed, welfare, old age, etc etc etc ... you could cut lots of 'management' out of the public service and hire more 'front line' workers ... but they all work in the same department and provide the same services.

but we can agree to disagree!

 

[dexi]

Stephen Constipate Harper is trying to buy a majority government next time around. All of the perks were to middle class (ie. people who vote) and it was paid for by cancelling programs the liberals had earmarked for the lowest classes (ie. those who don't vote).

Small businesses are going to eat it because the money they'll have to spend to administer the GST adjustment will more than compensate for any additional revenues, and in another year or two, they'll have to do it again if he keeps his promise to drop it another 1%. Um, why exactly didn't he drop it to 5% in one swoop and collectively save Canadian businesses (large and small) millions and millions of dollars? Maybe because it doesn't give voters a nice 1-2 warm fuzzy punch?

What a tool.

 

[Sonny]

The fact is income taxes are regressive and therefore worse than a consumption tax

You appear to be not familiar with terminology used in economics. Income taxes are progressive in that the more one makes the more one pays... one pays progressively more as one's income increases. Here the taxation process is based on the benefit one has derived from the economy and therefore one's ability to pay. Consumption taxes are classed as regressive in that the same rate of tax is applied to everyone regardless of income and ability to pay.

 

[Sonny]

So now answer the question were are the cuts coming from and was the $5B amount the best answer in the first place. Remember what the gun registration program was suppose to cost and what it's intended benefits were suppose to be.

The two political issues of the gun registry and aboriginals are remarkably different from one another, but one assumes you are raising the first as a concern of proper financial management of the latter.

The native peoples situation in Canada has been an international disgrace for several generations, and never addressed properly in all that time. If you check up on the news articles dealing with the Kelowna accord, you will find that the program embraced therein, and its financing, found intelligent, thoughtful and responsible support of every provincial premier and the federal government. If one is simply cynical of every program that is going to consume admittedly very substantial funds, then nothing happens, nothing moves forward, we are paralyzed. The failure of financial management in one unrelated area such as the gun registry is a wake-up call to ensure that procedures, controls and measurements are in place within the administration of funds that are intended to deliver the results defined in program objectives.

As for where the cuts to the Kelowna program are coming from, you need to ask Mr. Harper. To go from $5 billion to $850 million in total funding, the latter number being a mere 17 percent of the former, you have to ask more about what sliver of the initiative survived rather than what was cut.

 

[Sonny]

Taxes are the funding mechanism by which societal objectives can be achieved, whether they be paved roads, education, military defence, social security, etc., etc. What form taxes take is a socio-political decision, frequently based on economic ideology with the far right and the far left representing the two extremes of the scale. Mostly in Canada the process has found the middle ground, with a leaning slightly left or slightly right.

It is interesting to observe that previous conservative Mulroney government in Canada was responsible for nearly bankrupting this country, leaving the Chretien government to bring it back from the brink, eliminating deficits and reducing the national debt to a reasonable level that is the envy of the world... and, yes, it took a lot of taxes and very painful cuts to get there. Was there waste and scandal as well... any idiot knows that there was. I am no fan of 'le petit garcon' Chretien, but one cannot argue with the economic accomplishment.

Besides meeting everyday requirements, Canada, from its fiscal strength, has a unique opportunity now to balance three objectives of (1) continuing to reduce the national debt, (2) fund important social programs such as education, health, social security, Kelowna accord, etc. and (3) provide an equitable taxation system that does not place an undue burden on the taxpayer.

 

[Sonny]

And as far as the provinces go, the premiers aren't exactly up in arms over the budget because they know this fiscal imbalance issue is essentially going to amount to a huge winfall heading their way.

The newspapers and news websites have reported the B.C. government's concern about the cancellation of the Kelowna accord.

As for the fiscal imbalance, actually there was nothing about how it is to be addressed. This is going to be more of a headache that Harper bargained for.

 

[JustAGuy]

I'm no economist but if I have to spend 1.13 to save one cent (or in the case of Albertans, spend 1.06 to save one cent), I'm not sure I'd define that as a "tax cut". Reducing the taxes I pay on the money I earn is an actual tax cut. Perhaps someone can explain that subtle distinction to Mr Harper, the man with a Master's in Economics from the University of Calgary (motto: okay we're not as good as the U of A, but we're better than Cape Breton).

 

[JustAGuy]

I guess it depends on your definition of taxes. You seem to think taxes means only income taxes. Others might be inclinded to call the GST a tax as well. Then of course one could get into user fees etc. and on it goes. AFAIK they still have a deficit reduction tax embedded into gas prices, and of course the GST is often added on top of PST effectively making it a situation where we're being taxed on our taxes.

Of course the GST is a tax. I'm not calling it anything else. My point is that I have to consume goods/services in order to save money with a GST rate reduction. Such is not the case if I suddenly receive a larger paycheque because the amount of income tax being deducted is reduced. And don't even get me started on paying tax on tax (as in paying GST on top of all the taxes already built into the price of gas).

 

[Sonny]

Let's put it this way, the Bloc is going to vote for the budget, not because they particularly like it, but because of what they were told was going to unfold regarding this fiscal imbalance.

The Bloc is voting for the budget because they do not want the government to fall. According to polling, if an election were called today, the Bloc would get their asses kicked in Quebec by the Conservatives (and even by a few Liberals) and be reduced to a insignificant little pimple in the House.

 

[Sonny]

BC wants Harper to make good on Kelowna Accord

Make good on promise, Campbell urges PM
The honour of the Crown is at stake, premier says

Miro Cernetig
Vancouver Sun

Friday, May 05, 2006

Premier Gordon Campbell challenged Prime Minister Stephen Harper Thursday to make good on the last federal government's promise to spend $5.1 billion to improve the lives of Canada's aboriginal peoples.

Just two days after the unveiling of the new Conservative government's budget, which made no mention of the billions former prime minister Paul Martin had promised at a first ministers' meeting in Kelowna, Campbell stood in the legislature to warn that the "honour of the Crown is at stake" with Canada's one million natives.

"Today, I want there to be no doubt where this premier and this government stand," said Campbell, who stressed the symbolism of the moment by inviting B.C.'s aboriginal leaders into the legislature to witness his affirmation. "We stand behind our word."

In a sign of the political pressure Harper will be facing to make good on the five-year, $5.1-billion promise, provincial New Democratic Party MLAs also stood and applauded the Liberal premier's declaration.

Campbell, who assiduously avoids open fights with the federal government, did his best to find a ray of hope in Harper's budget and left the door open for more talks.

He praised the new Conservative government for putting a few hundred million dollars into improving some conditions in first nations communities and said he was glad the budget promised to close the gap between the lives of natives and other Canadians.

But the premier left no doubt he will be aggressively lobbying for the Kelowna Accord, the agreement signed last November in the resort town. Campbell, who has vowed to create a "new relationship" with "the third solitude" of first nations, had spent more than 18 months building support for the first ministers' summit in Kelowna.

"The Crown, represented by its federal, provincial and territorial governments, must uphold that trust and act honourably," said Campbell. "It must respect the letter, spirit and content of the undertaking of all 14 of Canada's first ministers only five short months ago."

"We cannot stand passively by and let this product of unprecedented consensus and collaboration wither and die for lack of Crown commitment," he said.

"I characterized that agreement as Canada's 'moment of truth,' " the premier said. "It was our time to do something that has eluded our nation for 138 years. It was our chance to end the disparities in health, education, housing and economic opportunity. All first ministers rose to that moment of truth alongside Canada's aboriginal leaders to undertake that challenge .... any unilateral reversal will invite consequences that only make us poorer as a nation."

B.C.'s aboriginal leaders said they were heartened by Campbell's promise to stand up for the Kelowna accord, which many believe may now be dead.

"We very much appreciate his comments," Grand Chief Ed John, spokesman for the First Nations Summit, the largest aboriginal organization in B.C., told the Canadian Press.

The summit, B.C. Assembly of First Nations and the Union of B.C. Indian Chiefs, representing B.C.'s 203 first nations and about one-third of all aboriginal people in Canada, have sent a letter to Harper expressing disappointment with the budget.

"Your government has reneged on this historic multi-government agreement, and has proceeded to unilaterally implement its own plan to address our issues without any consultations with us," said the letter, also addressed to Finance Minister Jim Flaherty and Indian Affairs Minister Jim Prentice.

But there will be a battle ahead. In Parliament Wednesday, Prentice said the budget had plenty of money for first nations.

"I have no intention of apologizing . . . about promises to aboriginal Canadians," he said.

"This government has provided $300 million in northern housing, $300 million in off-reserve housing, an additional $475 million, $500 million for the Mackenzie Valley pipeline, $2.2 billion in relation to residential schools. We have nothing to apologize for. It is a good budget for aboriginal Canadians."

mcernetig@png.canwest.com
© The Vancouver Sun 2006

Note that a good chunk of the money Prentice is referring to is past money, not new money. The $2.2B in relation to residential schools is a setllement for human abuse, it is scandalous for him to include it as an economic measure. What an idiot. Of course, the pipeline is to bring oil from the MacKenzie Valley to more southern located refineries, and then likely eventually to the USA. And, if it was a good budget for aboriginals, why are they not cheering?

And I think Campbell's 18 months work on the Accord and the agreement of ALL first ministers dispenses with the Conservatives' notion that the deal was done in a minute on the back of an napkin. The Conservatives are showing their standard response to challenges to be deflection via irrational dirty disdain.

 

[David in Van]

Consumption Taxes

Of course the GST is a tax. I'm not calling it anything else. My point is that I have to consume goods/services in order to save money with a GST rate reduction. Such is not the case if I suddenly receive a larger paycheque because the amount of income tax being deducted is reduced. And don't even get me started on paying tax on tax (as in paying GST on top of all the taxes already built into the price of gas).

Unless you are a hermit on a reserve somewhere, you are consuming items with GST on it. This is a tax cut which will result in more money in your pocket.

I am sure if they raised it 1% you would call it a tax increase.

 

[Sonny]

With a tax break in income taxes, the taxpayer has more money in the hand WITHOUT doing anything to get it. The government can put money into the hands of different levels of income earners disportionately via differing tax rates on income brackets, perhaps favouring the lower and middle income earners.

Putting cash directly in the hands of the taxpayer is also achieved with cash tax credits or subsidy payments with income level cutoffs which reduce or eliminate the credit/subsidy for those earning more. With respect to the Conservative daycare cash subsidy, $100 per month per eligible child is to be doled out. However, there is a clawback, as this cash is taxable in the hands of the lower earning parent.

Curiously, the family that does NOT use daycare will benefit most, as the stay-at-home non-working parent has little or no income and will receive the full benefit. This stay-at-home non-working parent could be someone in a high income home or someone on welfare - interesting coupling isn't it? A middle class family with two working spouses requiring daycare may not get that much, depending on what the lower income is. Now, I wonder exactly what benefit does a single working parent receive where he/she has a reasonable income as far as one person goes but low as far as a family goes?

The primary beneficiaries of a cut in GST are the middle and upper income earners who spend money consuming stuff. Without increasing his/her spending pattern, the larger consumer will spend less buying the same stuff. Lower income earners necessarily spend less and therefore will benefit less.

 

[Sonny]

ISeems to me you're basically trying to re-fight the election all over again.

Actually not. The Conservatives won, and I am happy it was only a minority. I think it's fair to discuss the outcome of budget measures. We don't know yet what the final budget will look like as there are sure to be some amendments the the government will make from its own reasoning and from suggestions from the opposition parties.