Thursday, December 15, 2005

GST anyone? No thanks.

It's hard to imagine being Stephen Harper and having to come up with good policy. No matter what you propose, pundits will always look for your so-called hidden agenda, especially given that so much of Harper's policies to date have been in the vein of "we're not the Liberals."

For a lot of people, myself included, that will pretty much suffice.

But unfortunately for Harper and his Conservative band of mostly men, there are other options that are not the Liberals too, though one of them looks suspiciously like the federal Grits when the need suits it.

Thus it was a welcome sigh of relief to policy wonkers like myself to see the writ dropped and lo, the Conservatives for a change actually have policy to proffer. And in this election, if they can keep themselves on message and not get drawn into the dark void of social conservatism, they may just stand a chance of forming government by offering something Canadians can actually consider, chew on and elect to support.

Thus in the first week out of the gate we have Mr. Harper proposing an immediate one percent trim (it seems to me a misuse of language to describe one percent as a 'slash' in taxes) in the much maligned federal Goods and Services Tax, followed by a further one percent reduction within the next five years.

Now I know, I know, it was the last Tory government that introduced the tax in the first place and it was that same Tory government that left Canada with its most serious deficit crisis that prompted the creation of that value added tax.

And I know that it was a Liberal campaign promise in the 1993 Red Book against which the present day Conservatives are speaking. And I also know that it is a commonly misstated fact that in that Red Book the federal Liberals promised to abolish the hated GST and have kept it around throughout their twelve years in office (in actual fact the Liberals vowed to harmonize a federal sales tax with provincial taxes in order to eliminate duplication and hopefully reduce the overall amount of the tax, if they could get the provinces to agree).

And I further know that many economists argue the single best way to stimulate economic growth is to reduce corporate and personal income taxes as opposed to value added taxes like the GST.

Having acknowledged all of that here's what else I know: politically and even economically, reducing the GST is a good idea.

First, the GST was originally designed as a means to reduce then eliminate the federal government's year over year deficit. Whether through the GST or in combination with some of then Finance Minister Martin's drastic spending cuts in the early to mid 1990's, the federal deficit is a thing of the past - the distant past. Indeed, the Liberal election platform boasts of eight straight years of surplus budgets as an example of its fiscal prudence.

You say potato and I say po-taw-to but it does not take a mathematical genius to call a multi-year, multi-billion dollar budgetary surplus not fiscal prudence but by its more accurate name: over taxation.

The federal budget is not supposed to act as a savings account. The government doesn't have surplus funds; it has more of my money than it is currently utilizing. And before we launch into a debate on priorities for spending those excess funds let me reiterate that the government is in its eighth straight year of surpluses it has not invested in carefully managed, efficient, improved services for Canadians. It has simply kept more of our money than it has spent.

Secondly, oh how those pundits change their tunes. Whenever a government proposes an increase in a consumption tax because, in theory, it spreads the pain equally over all income levels, opponents always argue that it is the lowest income earners who suffer most from a consumption tax: as a proportion of their income the lower classes feel the pinch of seven percent on that new refrigerator much more so than the wealthier classes. Would not the opposite also hold true, then, that the lowest, struggling class of earner would see a greater, immediate impact on their purchasing power through a cut in consumption taxes?

Mr. Martin et al argue a reduction in income taxes at the lower end of the economic scale benefits taxpayers more than a reduction in the GST, which may be true if the tax cuts were of any significant value. As an earner squarely in the middle of Canadian incomes, I'll see an overall federal tax bill drop of around $ 2009.

In the interim, I'll take the $84 immediate savings on my new refrigerator, please, and maybe buy a few extra Christmas presents.

Furthermore, the Conservatives haven't argued for only a cut to the GST (admittedly an immediate two percent cut as opposed to a phased in approach certainly would have made for a more dramatic political statement); it's part of a program that would include cuts to personal income taxes not unlike those proposed by the federal Liberals.

If nothing else, introducing clear tax policy proposals will finally allow Canadians to have a serious, frank discussion not just about on what we wish to spend but how much we're willing to pay to get there.

As the saying goes, more isn't always better.

Thursday, December 08, 2005

Vote Conservative - that's right...Conservative

Didn't expect to see this coming, did ya?

The time has come, or it will on January 23, 2006, to elect Stephen Harper's Conservatives to lead the government of Canada.

I'll be frank: no one is as surprised as I that these words are being typed out by my fingers. I'm not a member of the Conservative party (though I confess for the first time publicly that I once was, briefly, a member of one of its predecessors, the Progressive Conservatives, the former descriptor in the moniker being the more important of the two terms and a prerequisite to my membership).

But mark my words and mark your ballot: the Conservative party needs to be elected in January, preferably as a majority rather than a minority government.

Let's be clear, here: policy wise the Conservatives don't have that much going for them, though there's promise in the Conservative Party's proposed "Accountability Act" and Paul Martin's protestations notwithstanding, there is merit to decreasing the Goods and Services Tax (which I'll examine in detail in a forthcoming piece).

And certainly, for those who think personality matters, it's hard to argue with Harper's detractors who claim he has less charm and presence than the recorded phone company voice that declares "all circuits are busy now." He's hardly the guy we'd invite over to party-hearty.

That said, Paul Martin isn't exactly Howie Mandel himself.

There are, however, two very important reasons to mark an X next to your local big 'C' candidate.

First, though democracy is probably not best served by choosing a government based on the principle that it's not the previous one, the fact remains the biggest thing the Conservatives have going for them is they're not the Liberals.

Canada's so-called natural governing party has held office for the past twelve years and for a significantly large chunk of Canada's history. And it shows. If ever a party has demonstrated a concerted arrogance in its approach to governance it's the federal Liberals. And no, it isn't necessarily Paul Martin, just like it wasn't really Jean Chretien, though he exemplified the characteristic better than most. The arrogance is structural in the party. It's hard-wired into its organizational DNA. Like a spoiled teenager, the federal Liberal party has developed and long cultivated a culture of expectation. "We deserve to be in power," the culture preaches. "The country should be happy to have us."

And if that means all our friends get great jobs and lucrative contracts so be it. That's a small price to pay for getting to have the Liberals at the helm.

Secondly, and most importantly, a democracy is not meant to be continuously ruled by a single party, regardless of how often they are legitimately elected (a questionable notion at best) by the public. Democracy needs to breathe, which doesn't necessarily require the incumbent be defeated in every election but too many terms in office allows a party to begin to believe its own press that it is the de facto natural ruling party.

The Americans have partially addressed this issue with the 25th amendment to their constitution, which while not prohibiting continuous rule by the same party limits the number of terms a president can serve to two, a rule that's never seemed so golden as it does now.

Canadians don't have those restrictions: as long as we want them we can continue to elect them, certainly a purer form of democracy. All the more reason it's incumbent upon the electorate to make sure governments don't come to take their power for granted; good governance matters and corrupt and arrogant governance ought not to be tolerated.

The simple fact is that even though the we may not agree with everything the Conservatives aim to accomplish, even one term of government not so in line with our own political creeds has the potential to be much more beneficial to the country and to democracy than a government that feels it has the inalienable right to rule.