Thursday, March 04, 2010

No Dragon Slayer in the House

The federal government's budget was read to the House of Commons today and will be debated tomorrow, and perhaps on other days during this session of parliament. The enormous, vicious fire-breathing deficit dragon was not attacked with any efficient weapons. Instead, the finance minister waved a white flag at it from a distance and assured us that it would shrink to the size of a grasshopper in three or four or five years, or thereabouts. He believes this will happen because: - the economy will keep on improving (I liken this to a faith in financial miracle healing) and because - there won't be any "new" stimulus spending (so the economy will have a good time stimulating itself when the current stimulus money runs out, I assume) - and - some government salaries will be frozen and no new staff will be added. Also, taxes will not be increased and some will be decreased.

I am in favour of controlling the number of people who work in government and ensuring that tax money is used wisely ( the government should listen to Kevin Page). Bureaucracies have a natural tendency to grow into huge fiefdoms given the slightest opportunity. However, I suspect that the areas most affected will be the ones that mean the least to the supporters of socially regressive Conservative party. I believe funding for the arts will decrease more than funding for other sectors since creative people are considered effete and useless. The contribution the artistic community makes to the economy will be downplayed again. Little money will be given to environmental issues because the Conservatives are sure that only wing-nut lefties care about those things and the government wants to encourage more foreign investment and more free trade. (Free trade is not 'free' but that's a subject for another post.)

Unfortunately, the Goods and Services Tax will not be increased although that would be the fairest way to begin to tackle the dragon. And yes, I think we should increase the GST. Even one percentage point would do more to decrease the deficit than anything else that has been proposed and it wouldn't be all that painful.

The government says we are - open for business. Oh goody! I guess we were closed before due to our propensity to tax corporations at a rate that some people think is unacceptable. I would argue that we can never decrease taxes to the levels that some countries offer because a) we are a huge country, b) we have a small population, and c) we need to fund the programs that make us unique. We cannot do this unless we tax adequately. So what does attract business to Canada? Our health and social support programs are a big draw. Do we really need more huge corporations that make demands on local provincial and federal governments in return for possible future success (think of the auto industry bail outs)? Or, are more small and mid-sized businesses a better bet in the long haul? In spite of the recession, new small businesses start-up every day. I'd rather offer a modicum of support to them than to larger enterprises.

All is not lost though, for we will save 1.8 billion each year by decreasing foreign aid. But hey! - it's only those people, so never mind about them and remember - no visible new taxes. So, get out there and buy something.


mcinnesp said...

Good post, Diane.

But I have to disagree with the suggestion to increase the GST, since on July 1st we will be hit with HST. Paying 13% on services that would normally be charged 5% is more than enough.

Angela Addams said...

I agree...the HST is going to hurt, a lot.

And what about changing the national anthem? Oh wait, Harper backed down on that one today, didn't he.

mcinnesp said...

Yeah - he changed his mind on that one. Like there's nothing more important to think about? Nothing else that needs addressing, especially after his little extra break? Yeesh :(

jenn said...

Well, I see we are in very nearly complete agreement, Diane. I, too, think the GST should be raised that one point (and yes, the HST is going to hurt, but how come that was okay for the maritime provinces? We are a have-not now, and we'd better start getting used to it).

And I cannot believe the short-sightedness that allows a government to reduce the corporate tax rates while raising payroll taxes (due to be unfrozen in 2011). Talk about getting it backwards.

But I'm fascinated by how many same pages we are on (can't compare Canada's taxes to other countries--especially US, for example) without ever having talked about this stuff.

Falcata Times said...

Perhaps it might be a worthy exercise to look at the taxes that creative people pay as an average and then compare it to other jobs.

Diane Girard said...

I don't think the HST is going to hurt as much as some people anticipate. By the way, Duceppe raised a good point when he said Quebec introduced it many years ago and received no compensation from the federal government.

As for our national anthem, there is a huge sentimental attachment to it. But, I notice that the volume is loudest on the Oh Canada part and people are not sure of the other words, execept for - glorious and free - and we stand on guard for thee. The issue was a red herring and since no action will be taken it will fade.

Michelle said...

Ugh! Don't even get me started on the government, taxes, and stimulus money. I'm in the U.S.