That’s why it is so interesting, and not a little odd, that the federal finance minister has just come up with something conservatives should hate — a tax-and-spend budget.
A tax-and-spend budget with an eye to the next election.
Forget the fuss over Flaherty’s proposed job $300-million training scheme. At best, this so-called Canada job grant won’t come on line until next year.
More important, the ambitious training plan — which would provide eligible businesses with a grant of up to $10,000 per worker in government subsidies — is dependent on the provinces’ signing on.
At the best of times, this would be a recipe for stalemate. Provincial governments are jealous of their constitutional prerogatives, including jurisdiction over education. They’ve spent much of the last two decades wresting control of training from Ottawa.
They won’t be anxious to give this control back simply in order to give Harper a boost in the polls before the expected 2015 federal election.
So what is this budget about?
First, it’s about cutting back the federal civil service. The Harper Conservatives have been on this track since 2006 and this budget quietly continues the trend.
There aren’t many details. But Flaherty has served notice to federal workers that sick leave and pension benefits are to be targeted.
Buried deep in the document is also a pledge to “propose changes to the labour relations regime.”
Exactly what this means is never spelled out. But some Conservative backbenchers are already calling for so-called right-to-work laws that would make it illegal for unions to require dues from all the workers they represent.
Second, it is about making a pitch to voters in the hard-hit industrial heartland of southern Ontario.
To that end Flaherty has extended some manufacturing tax breaks and agreed to continue funding a federal development agency in southern Ontario that hands out industrial grants.
More important, he has extended for another 10 years a multibillion dollar program designed to rebuild infrastructure like bridges and sewers.
Spending at a time of economic weakness isn’t a bad idea. In fact, it is rather a good one.
But spending also makes it harder for the government to deliver on Harper’s promise to balance the books by the election of 2015.
Which brings us to the third part of this budget — taxes.
The only possible way that Flaherty can spend more money and still meet his deficit targets is by pulling in more tax revenue.
Raising taxes in anathema to Conservatives. So Flaherty says he is “closing tax loopholes” and making the system fairer.
In some instances that is exactly what his budget proposes to do, by for instance cracking down on dodgy charities.
But he’s also scaling back breaks that some voters might think are reasonable. He’s insisting that hospitals add HST to the already stiff parking fees most charge patients and visitors.
He is scaling back the tax deduction claimed for certain kinds of corporate dividends.
And he’s counting on auditors from the Canada Revenue Agency to collect an additional $550 million a year in penalties from those deemed tax deadbeats.
Adding all of this together produces an interesting result.
Over the period leading up to the 2015 election, the Conservatives promise to raise an extra $1.9 billion in taxes and tariffs.
Over the same period, they say they will spend, in net terms, an extra $1.7 billion of that new revenue.
Tax and spend. It’s a strategy that used to work politically for the Liberals. Flaherty is betting it will work equally well for the Conservatives.
Original Article
Source: thestar.com
Author: Thomas Walkom
No comments:
Post a Comment