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The Salon is ONW's weekly gathering place where three of Canada's brightest and most respected political strategists - John Capobianco, Marit Stiles and Bernie Farber - come together to analyze national issues affecting Ontario.





With its numerous tax breaks for families, including income-splitting, critics say the economic update brought down Wednesday by the Tories reads more like a CPC election budget than a comprehensive plan for prosperity for all Canadians. It predicts a $1.9 billion surplus next year.

 

John Capobianco:

Wednesday was a significant day for this government since it was an opportunity for Finance Minister Joe Oliver to deliver the traditional fall economic and fiscal forecast/update. The significance wasn't that it was time for the update, but what was in the update.

Oliver confirmed that the government remains on track for a balanced budget next year.

Having gone through the deepest economic and financial crisis since the Great Depression on a global scale, it was this government led by the Prime Minister and the late Jim Flaherty who competently steered this country clear of financial disaster, as other G-7 countries were experiencing significant job losses and crumbling financial markets.

The government in 2009-10 initiated an economic jobs and growth strategy which saw significant spending in communities across Canada for "shovel-ready" infrastructure projects and more, that both saved and created jobs in a time when unemployment threatened to skyrocket. 

However, this infrastructure spending was always meant to be a short-term remedy and the government vowed to ensure our books were balanced by 2015.

Not only will they be balanced, but also we will have a $1.9 billion surplus.

 

Marit Stiles:

I agree with John that Wednesday was a significant day but perhaps not for the same reasons.

I think the backdrop to the economic statement was pretty telling: Minister Oliver and the Conservatives chose to present it in front of their Bay Street friends rather than in the House of Commons. And that's a significant choice because, well, this is a story about choices.

The Conservatives have chosen tax giveaways that benefit a wealthy few over serious measures that would give the majority of Canadians a real hand up.

Furthermore, the figures released Wednesday make it clear that the Conservatives plan to use Employment Insurance (EI) revenues – funds paid by workers and employers that are meant to exclusively fund the EI program – to pay for their income splitting scheme … a scheme they chose to put in place and that will only help wealthy Canadians.

As I read it, the Conservatives are booking a projected overall surplus of $2.9 billion for 2015-16 - but $3.9-billion will be taken out of the EI fund to get them there.

And guess what? That is on top of the Conservative plan to use EI funds to pay for their new business tax handout that's going to create just 800 jobs.


Bernie Farber:

It’s a confusing mess for so many of us. I consider myself middle income and certainly much better off than many. Yet I am the beneficiary of tax breaks that should go for those most in need.

This seems to me to be an election financial statement, despite John's rhetoric - a smaller than expected surplus with no new incentives.  

 

John Capobianco:

You can't win for trying... you are complaining of getting a tax break? Really?

After years of holding the line, the government wanted to ensure Canadian families received some tax relief - in fact, the overall tax burden is at the lowest level in 50 years.

The update focused on some major tax relief for families which included tax cuts and benefits to the tune of $27 billion back in Canadians' pockets.

The policies are specifically focused on families with children under the age of 18: expanding the Universal Child Care Benefit, introducing the Family Tax Cut, increasing the Child Care Expense Deduction limits, as well as doubling the Children's Fitness Tax credit.

This is good for Canada and for Canadian families.  

 

Marit Stiles:

Bernie is, I expect, feeling some of the discomfort that a lot of Canadians are feeling with respect to this income splitting arrangement, John.

Why should those who are already doing so well be rewarded while the majority of Canadians continue to struggle? Why not put in place measures that would benefit families across the board, like the childcare proposal that the NDP has put forward?

The Conservative scheme increases financial barriers to married or common law women working outside the home, particularly when their spouse has above-average earnings.

Why not do something that working women have been calling for for 40 years: more affordable childcare, a national childcare plan?

The Conservatives' approach is a slap-dash gathering of 'benefits' that assume childcare spaces exist -- where they don't -- and are completely out of touch with the reality of working families, indeed most Canadians.

But I want to end on another point. By spending the surplus before their budget has even been tabled, the Conservatives are effectively boxing in the opposition parties in the lead-up to an election. Any new spending announcements by the NDP or Liberals will be met with questions about how much they'll raise taxes or where they will cut to pay for it.

That's probably 'smart' politics, but not very healthy for democracy and not very good for Canadians.  


Bernie Farber:

And lets also remember that former Liberal Prime Minister Paul Martin left Stephen Harper a $13 billion surplus in 2006, yet the national debt still stands at about $200 billion.

Meanwhile Harper has cut benefits - targeted veterans, the poor and the most needy, such as destitute refugees, while ensuring that the highest tax cuts benefit big business.

There are a lot of camouflage words in the Economic Statement, but in the end, the majority simply do not benefit.

About The Salon

John Capobianco is a former CPC candidate and long-time party activist in both the federal and Ontario Conservative parties; Marit Stiles is a federal and Ontario NDP strategist; Bernie Farber is a former Ontario Liberal candidate and one of Canada's leading human rights experts.
Posted date : November 13, 2014

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