The Harper/CPC government introduced it's first budget yesterday and it's a very conservative document. That is, it's about conserving dollars in the pockets of the privileged. It is not about conservative values such as building a stronger nation.
First the disclaimers. I am not an economist - indeed I never took and economics course - so I have to rely on the various experts who have analysed the economic implications of the budget. Persoanally, I come out ahead on the budget. While the basic personal income tax rate has increased by 0.5%, the amount of pension income sheltered from tax is doubled to $2000; net cost to me $30. But that is more than offset by the 1% reduction in the GST. So I should come out ahead.
The 2006 budget is an election budget. It's puts money directly back in the pockets of the middle and upper classes while investing little or nothing in social infrastructure (day care, health services, aboriginals, education and technology and the arts). The GST cut will be noticed by everyone on July 1st. The cheques for $100 a month for every child under 6 years of age will be noticed by everyone who is eligible and the tax-back impact will only be obvious next March when families are completing their tax returns. One might think the $500 credit for children under 16 years enrolled in athletic programs was aimed at suburban hockey families like the Harpers and Flaherties (Finance minister Jim Flaherty played university hockey in the USA); it won't buy sports equipment for families whose children are not enrolled in organised (jock) sports so don't count on it to keep your young runner or inner city basket-ball player in shoes.
There is a credit for people who buy monthly transit passes (1 in 5 riders in Toronto, according to TTC chairman Howard Moscoe) but nothing for the vast majority of riders. How much better it would have been to increase the transit subsidy by the same amount so that municipalities could expand their systems or reduce fares and benefit everyone. But the daily commuter-train riders from the GTA and similar zones around Montreal and Vancouver will be delighted.
There is nothing for the environment in the budget. The commitments to aboriginals that were part of the Kelwona accord are gone. There is a small tax break for students with good jobs (i.e. make enough money to pay income taxes) for their book purchases but this doesn't help the students who can't afford to even consider pursuing post secondary education. Defence spending, which was a high priority for the CPC during the election campaign, is now deferred until after 2007 and the probable next election.
But it is the child care grant that is most odious and which exemplifies the government's shameless catering to its extreme right wing constituency. Overlook the fact that $100 a month won't buy much day care; this grant is not aimed at working mothers with children in day care. In fact, working mothers who earn taxable income will see the $100 grant taxed back so it is $84.50 or less. Non-working mothers, many of whom will be found among the religious groups who have so ardently supported the CPC, will benefit. So will non-working mothers who don't have to work because their spouses make enough money to support the family comfortably. Forget the quips about spending the grant on beer; they will be spending it at Starbucks while their children are in private day care. Meanwhile, the Liberal government's public day care program will be terminated next March and their will be fewer low-cost public spaces for mothers who need to work to support their families.
The 2006 budget strongly recalls the sense I had of the CPC supporters I encountered at the last two local constituency meetings I attended in Thornhill. Even trying to overlook the fact that the meetings were held at the very toney Bayview Golf and Country Club, the party members were almost all looking at politics as a means to ensure they could make and keep more money. The "Red Tories" had been beaten back, so there was no discussion of nation building or social programs or the common good. "More money in my pocket" was all that mattered.
As an election budget, it may be a winner. But as national fiscal policy it is a disgrace and I am a proud Liberal leader Bill Graham instantly dismissed it as unacceptable. I hope that it will provide a benchmark against which the candidates for the Liberal Party leadership can measure their policy objectives for a different kind of Canada.
First the disclaimers. I am not an economist - indeed I never took and economics course - so I have to rely on the various experts who have analysed the economic implications of the budget. Persoanally, I come out ahead on the budget. While the basic personal income tax rate has increased by 0.5%, the amount of pension income sheltered from tax is doubled to $2000; net cost to me $30. But that is more than offset by the 1% reduction in the GST. So I should come out ahead.
The 2006 budget is an election budget. It's puts money directly back in the pockets of the middle and upper classes while investing little or nothing in social infrastructure (day care, health services, aboriginals, education and technology and the arts). The GST cut will be noticed by everyone on July 1st. The cheques for $100 a month for every child under 6 years of age will be noticed by everyone who is eligible and the tax-back impact will only be obvious next March when families are completing their tax returns. One might think the $500 credit for children under 16 years enrolled in athletic programs was aimed at suburban hockey families like the Harpers and Flaherties (Finance minister Jim Flaherty played university hockey in the USA); it won't buy sports equipment for families whose children are not enrolled in organised (jock) sports so don't count on it to keep your young runner or inner city basket-ball player in shoes.
There is a credit for people who buy monthly transit passes (1 in 5 riders in Toronto, according to TTC chairman Howard Moscoe) but nothing for the vast majority of riders. How much better it would have been to increase the transit subsidy by the same amount so that municipalities could expand their systems or reduce fares and benefit everyone. But the daily commuter-train riders from the GTA and similar zones around Montreal and Vancouver will be delighted.
There is nothing for the environment in the budget. The commitments to aboriginals that were part of the Kelwona accord are gone. There is a small tax break for students with good jobs (i.e. make enough money to pay income taxes) for their book purchases but this doesn't help the students who can't afford to even consider pursuing post secondary education. Defence spending, which was a high priority for the CPC during the election campaign, is now deferred until after 2007 and the probable next election.
But it is the child care grant that is most odious and which exemplifies the government's shameless catering to its extreme right wing constituency. Overlook the fact that $100 a month won't buy much day care; this grant is not aimed at working mothers with children in day care. In fact, working mothers who earn taxable income will see the $100 grant taxed back so it is $84.50 or less. Non-working mothers, many of whom will be found among the religious groups who have so ardently supported the CPC, will benefit. So will non-working mothers who don't have to work because their spouses make enough money to support the family comfortably. Forget the quips about spending the grant on beer; they will be spending it at Starbucks while their children are in private day care. Meanwhile, the Liberal government's public day care program will be terminated next March and their will be fewer low-cost public spaces for mothers who need to work to support their families.
The 2006 budget strongly recalls the sense I had of the CPC supporters I encountered at the last two local constituency meetings I attended in Thornhill. Even trying to overlook the fact that the meetings were held at the very toney Bayview Golf and Country Club, the party members were almost all looking at politics as a means to ensure they could make and keep more money. The "Red Tories" had been beaten back, so there was no discussion of nation building or social programs or the common good. "More money in my pocket" was all that mattered.
As an election budget, it may be a winner. But as national fiscal policy it is a disgrace and I am a proud Liberal leader Bill Graham instantly dismissed it as unacceptable. I hope that it will provide a benchmark against which the candidates for the Liberal Party leadership can measure their policy objectives for a different kind of Canada.
