The Liberals have unveiled the details of their proposed carbon tax. To Dion's credit it appears he has noted the lesson from Kim Campbell, John Tory and others that elections are not the time to discuss major shifts in public policy. He has the summer to educate Canadians on his Green Shift program.
It will take time to review the policy outside of the standard headlines. There is one aspect of the revenue neutral claim that needs further examination. The carbon tax will start at $10/megaton and over 4 years rise to $40/megaton. The Liberals are boasting that as the price of carbon increases the more Canadian families save through tax cuts.
Last summer in Ontario, Hydro launched a number of inititives to decrease electricity consumption. They were successful. As a result the Hydro is experiencing a revenue shortfall and has applied for a rate increase.
The purpose of the carbon tax is to reduce carbon emittions. What happens when the cost of carbon is maxed out and pollution continues to decrease? The overall revenue of the carbon fund will begin to fall. Will families have to give back their tax cuts or will the government continue to increase the cost of carbon in order to keep the tax cuts in place? Either way if this plan is successful Canadians will once again be in a position where reducing energy consumption will have a negative effect on their disposable income.
Showing posts with label taxes. Show all posts
Showing posts with label taxes. Show all posts
Friday, June 20, 2008
Thursday, May 22, 2008
Tory calls to help tourism too late
On Wednesday, John Tory called on the provincial government to eliminate taxes on hotels and tourist attractions for the summer. The idea is in response to the drop in tourism. It is similar to the gas tax vacation proposal in the US that has been endorsed by John McCain and Hillary Clinton.
The plan does have some appeal. Locals would be able to partake in more of the many activities Toronto and the rest of the province has to offer. These activities get expensive very quickly. It would also help to offset the pricing advantage that has been lost due to the strong dollar.
The timing of the announcement is based purely on politicking and nothing to do with helping the economy. A strong dollar, tanking US economy and soaring oil prices are a recipe for a decline in tourism. If Tory was concerned he should have brought his idea to the table when the budget was tabled.
If McGuinty woke up this morning and decided he liked the idea, there would not be sufficient time to implement it. The legislation would need to be drawn up reviewed and passed. Businesses would need time to adjust their prices and bookkeeping. Various theme parks offer a reduced rate for early season pass purchases. These tourist attractions have started or are about to raise their pricing to the standard summer rate. The season for them to benefit from a tax cut has already been mostly lost.
Proposing solutions to problems without proper time for implementation is irresponsible politics.
Practical solutions from government need to be practical or they will not work.
The plan does have some appeal. Locals would be able to partake in more of the many activities Toronto and the rest of the province has to offer. These activities get expensive very quickly. It would also help to offset the pricing advantage that has been lost due to the strong dollar.
The timing of the announcement is based purely on politicking and nothing to do with helping the economy. A strong dollar, tanking US economy and soaring oil prices are a recipe for a decline in tourism. If Tory was concerned he should have brought his idea to the table when the budget was tabled.
If McGuinty woke up this morning and decided he liked the idea, there would not be sufficient time to implement it. The legislation would need to be drawn up reviewed and passed. Businesses would need time to adjust their prices and bookkeeping. Various theme parks offer a reduced rate for early season pass purchases. These tourist attractions have started or are about to raise their pricing to the standard summer rate. The season for them to benefit from a tax cut has already been mostly lost.
Proposing solutions to problems without proper time for implementation is irresponsible politics.
Practical solutions from government need to be practical or they will not work.
Monday, March 10, 2008
Widdling the budget surplus cushion
On Wednesday, parliament passed Liberal Dan McTeague private member bill C-253 158-122. Should the bill pass through the Senate it would allow RESP contributions to be tax deductible the same way as RRSP. The passage of this bill causes a number of problems for both the Conservatives and the Liberals.
When the Liberals were in power they created a $3 billion contingency fund that would go towards the deficit. This money was not counted as part of the budget surplus. The Conservatives have abandoned this practise and the only left a $2.3 billion surplus for this year. Latest estimates put the cost of the change to the RESP at $900 million.
When this bill was first introduced the government was still working with double digit surpluses. One of the Liberals complaints about the current budget was that it didn't contain enough of a buffer for the pending economic downturn. Cutting the buffer even more doesn't seem fiscally prudent. A deficit under the Conservatives watch will be a plus for the Liberals. If this legislation causes the the deficit the public backlash may be directed at the Liberal party. The plus side for the Liberals is that they now will have fiscal legislation they can take credit for from the opposition benches. This legislation will likely be popular.
There is great conflict of how the Senate should handle this legislation. Harper has asked the Senate to kill it because it could be harmful to the government finances. The Conservatives have also been attacking the Senate for ignoring the will of parliament by holding up legislation. If the Senate passes the legislation quickly it will be open to criticism that they show partisanship by prioritzing legislation that benefits the Liberal party. The only choice the Senate has is to ignore party politics, do their job of evaluating the legislation on it's own merits. Under those criteria it is impossible to guess if the legislation will recieve Royal Asscent.
The bottom line is this is a piece of legislation that addresses the long standing complaint that the federal government is ignoring the financial burden of post secondary education. The timing of passing private member bills is completly unpredicatable. This legislation was passed at the worst possible time. It would be better suited as a plank in the platform for the next federal election.
When the Liberals were in power they created a $3 billion contingency fund that would go towards the deficit. This money was not counted as part of the budget surplus. The Conservatives have abandoned this practise and the only left a $2.3 billion surplus for this year. Latest estimates put the cost of the change to the RESP at $900 million.
When this bill was first introduced the government was still working with double digit surpluses. One of the Liberals complaints about the current budget was that it didn't contain enough of a buffer for the pending economic downturn. Cutting the buffer even more doesn't seem fiscally prudent. A deficit under the Conservatives watch will be a plus for the Liberals. If this legislation causes the the deficit the public backlash may be directed at the Liberal party. The plus side for the Liberals is that they now will have fiscal legislation they can take credit for from the opposition benches. This legislation will likely be popular.
There is great conflict of how the Senate should handle this legislation. Harper has asked the Senate to kill it because it could be harmful to the government finances. The Conservatives have also been attacking the Senate for ignoring the will of parliament by holding up legislation. If the Senate passes the legislation quickly it will be open to criticism that they show partisanship by prioritzing legislation that benefits the Liberal party. The only choice the Senate has is to ignore party politics, do their job of evaluating the legislation on it's own merits. Under those criteria it is impossible to guess if the legislation will recieve Royal Asscent.
The bottom line is this is a piece of legislation that addresses the long standing complaint that the federal government is ignoring the financial burden of post secondary education. The timing of passing private member bills is completly unpredicatable. This legislation was passed at the worst possible time. It would be better suited as a plank in the platform for the next federal election.
Thursday, November 1, 2007
Who is afraid of voters?
Earlier this summer Stephan Dion taunted Prime Minister Harper that he was waiting to call by elections because he was afraid to face voters. Losing all the by elections in one night would hurt the Conservatives with the possibility an election looming. Instead it was the Liberals who lost 3 Quebec by elections including (Outremont) the safest Liberal riding in the country.
Today the Liberals had the opportunity to topple the government attempting to cut the GST. They have been vocal that they are against this move and would consider rescinding it as part of their election platform. Once again Dion ordered his caucus to remain seated and abstain from voting. If the Liberals are not going to try to influence the government they should move their seats to the viewing gallery until the next election.
In 2006 Paul Martin refused to go anywhere near Dalton McGuinty due to his unpopularity from creating the health tax. Martin lost the election and McGuinty was given a second term as premier.
After the the Ontario Liberal victory Toronto David Miller stated that it was a green light to impose his new taxes because people are willing to pay for services they want. There was even a pro tax rally before the meeting where the taxes were approved. Miller has been leading the charge that 1% GST should go to municipalities.
The next by election needs to be called by January 2 for the riding of Toronto Centre. Willowdale and Vancouver Quadra need to be called by the end of January. We may see the Liberals agreeing to support the Miller initiative to raise the GST 1% and give the money to the cities.
Today the Liberals had the opportunity to topple the government attempting to cut the GST. They have been vocal that they are against this move and would consider rescinding it as part of their election platform. Once again Dion ordered his caucus to remain seated and abstain from voting. If the Liberals are not going to try to influence the government they should move their seats to the viewing gallery until the next election.
In 2006 Paul Martin refused to go anywhere near Dalton McGuinty due to his unpopularity from creating the health tax. Martin lost the election and McGuinty was given a second term as premier.
After the the Ontario Liberal victory Toronto David Miller stated that it was a green light to impose his new taxes because people are willing to pay for services they want. There was even a pro tax rally before the meeting where the taxes were approved. Miller has been leading the charge that 1% GST should go to municipalities.
The next by election needs to be called by January 2 for the riding of Toronto Centre. Willowdale and Vancouver Quadra need to be called by the end of January. We may see the Liberals agreeing to support the Miller initiative to raise the GST 1% and give the money to the cities.
Wednesday, October 31, 2007
GST Cut
The government provided their economic update today. It called for a 1% GST cut on January first as well as some retroactive income tax cuts to the beginning of this year. There are also plans for future income and corporate tax cuts that will be included in the budget next year.
The plan will come to a confidence vote in the house of commons tommorrow. The NDP and Bloc will be voting against the cuts because they are looking for more government spending. The Liberals who oppose the GST cut are not stupid enough to topple the government on a tax cut. They are in favour of the income and corporate tax cuts so they will be able to vote with the government. In the last few days it has been hinted that we may see the Liberals propose undoing the GST cut in their election campaign.
There are many people making the argument that cutting the GST over personal tax cuts is bad because it rewards the rich more than the poor. The GST is a regressive tax and by it's very nature takes a higher percentage from the poor than the rich.
There are seniors that are retired on fixed income that pay no or minimal income tax but they do pay GST. There are working Canadians who's income either is less than the minimum for paying income taxes or are only partway into the lowest tax bracket. There are Canadians who are students or unemployed that are not paying income tax. These groups are most in need of a tax cut and benefit more from a GST cut than an income tax cut.
On the flip side the wealthy are able to save more because they spend more. Some of the members of the first group in theory could be paying GST on 100% of their earnings. The wealthy are able to generate savings and will only pay GST on a fraction on their income. The wealthy are also able to get the maximum benefit from any income tax cuts. This is why regressive consumption taxes hit the poor at a higher rate than they hit the rich.
In the long run eliminating the GST is a sound policy that benefits all Canadians. Combined with other types of tax cuts proposed today will help reduce tax burden on all Canadians and provide a healthy economic future.
The plan will come to a confidence vote in the house of commons tommorrow. The NDP and Bloc will be voting against the cuts because they are looking for more government spending. The Liberals who oppose the GST cut are not stupid enough to topple the government on a tax cut. They are in favour of the income and corporate tax cuts so they will be able to vote with the government. In the last few days it has been hinted that we may see the Liberals propose undoing the GST cut in their election campaign.
There are many people making the argument that cutting the GST over personal tax cuts is bad because it rewards the rich more than the poor. The GST is a regressive tax and by it's very nature takes a higher percentage from the poor than the rich.
There are seniors that are retired on fixed income that pay no or minimal income tax but they do pay GST. There are working Canadians who's income either is less than the minimum for paying income taxes or are only partway into the lowest tax bracket. There are Canadians who are students or unemployed that are not paying income tax. These groups are most in need of a tax cut and benefit more from a GST cut than an income tax cut.
On the flip side the wealthy are able to save more because they spend more. Some of the members of the first group in theory could be paying GST on 100% of their earnings. The wealthy are able to generate savings and will only pay GST on a fraction on their income. The wealthy are also able to get the maximum benefit from any income tax cuts. This is why regressive consumption taxes hit the poor at a higher rate than they hit the rich.
In the long run eliminating the GST is a sound policy that benefits all Canadians. Combined with other types of tax cuts proposed today will help reduce tax burden on all Canadians and provide a healthy economic future.
Making a difference
In July after the City of Toronto voted to postpone bringing in new taxes (that were approved last week) I sent an e-mail to everyone on city council criticizing their response to the tax revolt and what would need to happen for citizens to accept these new taxes.
Today I received a thank you from councillor Minnan-Wong. He stated that my e-mail along with thousands of others were instrumental in opening the public debate on how the city should be run. These included compromises on the taxes and the independent review board looking into the cities spending.
It is nice to think that expressing my opinions helped to make a difference at least in a small way.
Today I received a thank you from councillor Minnan-Wong. He stated that my e-mail along with thousands of others were instrumental in opening the public debate on how the city should be run. These included compromises on the taxes and the independent review board looking into the cities spending.
It is nice to think that expressing my opinions helped to make a difference at least in a small way.
Tuesday, October 23, 2007
Only in Toronto
This morning there was a rally in front of city hall before the debate on the cities new taxes. They wore yellow scarves to show their support. Mayor Miller took the time to address the crowd and their concerns. They proceeded to council chambers to visually encourage city council to take up their plight. When Mayor Miller addressed council they had to be silenced when they broke out in applause (which is not permitted in chambers). They were there to support the new taxes.
Taxes are a fundamental aspect of supporting the welfare state. I can understand why some people would (especially with the new concessions) be in favour of the taxes. What other city in the western world would have a rally that their taxes are not high enough?
It is no wonder that the Conservatives are unable to win any seats in Toronto. It is no wonder we keep reelecting politicians that got us into this mess in the first place. There were 8 other taxes that were taken under consideration. Imagine when they start working on next years budget. We will have rallies from different groups in support of their favourite new taxes.
Taxes are a fundamental aspect of supporting the welfare state. I can understand why some people would (especially with the new concessions) be in favour of the taxes. What other city in the western world would have a rally that their taxes are not high enough?
It is no wonder that the Conservatives are unable to win any seats in Toronto. It is no wonder we keep reelecting politicians that got us into this mess in the first place. There were 8 other taxes that were taken under consideration. Imagine when they start working on next years budget. We will have rallies from different groups in support of their favourite new taxes.
Monday, October 22, 2007
More taxes please
City of Toronto City Council is well known for their making sure the cost of city projects is the least important factor when handling bids for city contracts. Untendered contracts and fair wage rules help the city differ from the normal processes followed in the private sector. Councillors make sure they are rewarded for their job and will not sacrifice any perks when times are tough. This attitude combined with downloading costs of Provincial programing to cities has left Toronto in a financial crisis. Reserve accounts have been raided. At one point in desperation all of the hydro poles were sold to the province for extra funds. The reserve funds are now almost empty and drastic action has to be taken.
Last year David Miller won reelection while campaigning on a platform that included keeping property tax increases to 3%. The Province had so generously passed the City of Toronto Act which gave new taxing powers to the city. While not discussed during the election campaign his plan was to use these new powers to balance the budget.
Early this summer two new taxes were introduced. There was a 1% land transfer tax on property sales to be added on to the 1% already charged by the Province. There would be a $60 annual vehicle registration fee to be added on to the $74 already charged by the Province. There was a huge backlash from residents. While planning the budget councillors failed to give up a single one of their many perks. Council decided to push off the issue until after the provincial election to put pressure on the provincial parties.
Mayor Miller responded by claiming immediate cost cutting measures needed to be introduced. The measures introduced seemed to be designed to hurt as many people as possible than to provide real savings. There was talk about shutting down the Sheppard Subway line to save $5 million dollars. This seemed particularly petty considering the TTC wants $2.6 Billion for LRT all over the city. They also have secured funding to extend the subway to York University and other infrastructure projects. The TTC settled for a fare hike to avoid budget cuts which seemed to be the poison of choice for riders.
The city closed community centres on Mondays. The buildings were still operating with all full time employees reporting to work. The only cost savings was from part time workers laid off. The savings were offset by loss in revenue from denying the public access to programs they normally pay for. Some libraries were closed on Sundays. The union just won a grievance that their staff still have to be paid eliminating the savings from that scheme. Outdoor rinks were going to be delayed opening until January. This included the Nathan Phillip Square a popular tourist attraction during the holiday season. Master Card came up with a $130,000 donation to keep the rinks open.
During the provincial election the financial crunch faced by the city was virtually ignored. Miller expressed support for all 3 parties, although he seemed to express a little more support for the Liberals. When McGuinty was reelected Miller said that it was a green light for his taxes to go through. Citizens are willing to pay more to have services they want. McGuinty raised taxes after he promised not to and was reelected. This ignored the fact that McGuinty promised not to raise taxes this time and the major campaign issue was faith based school funding.
Miller has seemed to have learned from his embarrassing summer. Last week he introduced a panel of elite citizens who have experience running multi million dollar organizations. They are to examine the cities books and provide a report before work starts on next year's budget. It appears he has listened to people concerns and has made amendments to the taxes to make them a little more fair. We will find out tomorrow what they are. He has hinted there may be an exemption on the land transfer tax for first time home buyers.
Tomorrow, the taxes should be approved by council. Hopefully the mayor has learned his lessons and we can expect better leadership in the future. Hopefully next year's budget will include measures with councillor willing to make sacrifices for the greater good as they once again ask residents to do the same. I have my doubts. We will have to wait and see.
Last year David Miller won reelection while campaigning on a platform that included keeping property tax increases to 3%. The Province had so generously passed the City of Toronto Act which gave new taxing powers to the city. While not discussed during the election campaign his plan was to use these new powers to balance the budget.
Early this summer two new taxes were introduced. There was a 1% land transfer tax on property sales to be added on to the 1% already charged by the Province. There would be a $60 annual vehicle registration fee to be added on to the $74 already charged by the Province. There was a huge backlash from residents. While planning the budget councillors failed to give up a single one of their many perks. Council decided to push off the issue until after the provincial election to put pressure on the provincial parties.
Mayor Miller responded by claiming immediate cost cutting measures needed to be introduced. The measures introduced seemed to be designed to hurt as many people as possible than to provide real savings. There was talk about shutting down the Sheppard Subway line to save $5 million dollars. This seemed particularly petty considering the TTC wants $2.6 Billion for LRT all over the city. They also have secured funding to extend the subway to York University and other infrastructure projects. The TTC settled for a fare hike to avoid budget cuts which seemed to be the poison of choice for riders.
The city closed community centres on Mondays. The buildings were still operating with all full time employees reporting to work. The only cost savings was from part time workers laid off. The savings were offset by loss in revenue from denying the public access to programs they normally pay for. Some libraries were closed on Sundays. The union just won a grievance that their staff still have to be paid eliminating the savings from that scheme. Outdoor rinks were going to be delayed opening until January. This included the Nathan Phillip Square a popular tourist attraction during the holiday season. Master Card came up with a $130,000 donation to keep the rinks open.
During the provincial election the financial crunch faced by the city was virtually ignored. Miller expressed support for all 3 parties, although he seemed to express a little more support for the Liberals. When McGuinty was reelected Miller said that it was a green light for his taxes to go through. Citizens are willing to pay more to have services they want. McGuinty raised taxes after he promised not to and was reelected. This ignored the fact that McGuinty promised not to raise taxes this time and the major campaign issue was faith based school funding.
Miller has seemed to have learned from his embarrassing summer. Last week he introduced a panel of elite citizens who have experience running multi million dollar organizations. They are to examine the cities books and provide a report before work starts on next year's budget. It appears he has listened to people concerns and has made amendments to the taxes to make them a little more fair. We will find out tomorrow what they are. He has hinted there may be an exemption on the land transfer tax for first time home buyers.
Tomorrow, the taxes should be approved by council. Hopefully the mayor has learned his lessons and we can expect better leadership in the future. Hopefully next year's budget will include measures with councillor willing to make sacrifices for the greater good as they once again ask residents to do the same. I have my doubts. We will have to wait and see.
Tuesday, September 18, 2007
A Crazy Day in Politics
Today was one of those rare day in politics where something has been going on at every level of government.
Municipal --
Provincial --
Federal --
Municipal --
When Mayor Miller failed to get his new taxes approved by city council, his followers retaliated by suggesting a whole bunch of cost cutting measures to help balance the books. The proposal to close the Sheppard subway line was replaced by a $0.15/fare increase and $4 metro pass increase to preserve service.
Another cut was to close all 150 community centres on Mondays. In the past week or so there have been attempts to block this plan by various city councillors because it has not been approved by council. Today the plan went into effect and residents learned how this idea seems to be more vengeful for not getting the tax increases, then a practical cost cutting measure.
The buildings are closed. The lights are on and all full time workers are still reporting to work. Only the part time staff are being cut on days when the centres are closed. These savings are off set by the loss of revenue from the programs that are unable to run. I really hope city council can stop acting like children and get the budget under control in a fair and reasonable manor. I have my doubts.
Another cut was to close all 150 community centres on Mondays. In the past week or so there have been attempts to block this plan by various city councillors because it has not been approved by council. Today the plan went into effect and residents learned how this idea seems to be more vengeful for not getting the tax increases, then a practical cost cutting measure.
The buildings are closed. The lights are on and all full time workers are still reporting to work. Only the part time staff are being cut on days when the centres are closed. These savings are off set by the loss of revenue from the programs that are unable to run. I really hope city council can stop acting like children and get the budget under control in a fair and reasonable manor. I have my doubts.
Provincial --
Faith based school funding remained a hot issue in the election. In the early days of the election McGuinty was criticized for attacking faith based schools in a public elementary school down the block from the Catholic high school he attended. Today he went to a Catholic High School and once again declared the 'threat' that funding faith based schools posed. In response to being a hypocrite he said that as Premier he has supported policies (gay marriage, stem cell research, abortion) that goes against Catholic teachings. Once again the Premier demonstrated that he feels Catholics have some special ability to integrate into society that other religious groups don't have.
Federal --
Stephan Dion had been complaining that Stephen Harper waited the full 6 months he was allowed to call by elections in Quebec. He accused the Conservatives of being afraid to face the voters. It appears that the voters are afraid of him.
Two of the ridings are BQ strong holds. The Conservatives have successfully taken one riding while the Bloc has maintained control in the other riding. This is a major victory for the Conservatives.
The most important riding is Outremont. This is considered the safest Liberal riding in the entire country. The Liberals have lost it only once since 1935 prior to tonight. The Liberals ran a high profile star candidate hand picked by Stephane Dion and condemned by B'nai Brith. The NDP have taken this riding rather convincingly. It is only the second time ever the NDP have ever one a seat in Quebec.
This may only be a by election which does not necessarily reflect the outcome if there were to be a general election. The implications are huge. The NDP have now established an outpost where they can try to legitimately win seats in Quebec. It is another stinging blow to Stephane Dion's leadership. There is no way that he will be able to bring down the government in the fall. I am sure Harper will use this to rub some more salt into his wounds as the Liberals will be forced to accept a thrown speech they don't like. It also creates more doubts for the Liberals of their leader's ability to ever win an election. Dion may become only the 3rd Liberal leader since confederation not to become Prime Minister.
Two of the ridings are BQ strong holds. The Conservatives have successfully taken one riding while the Bloc has maintained control in the other riding. This is a major victory for the Conservatives.
The most important riding is Outremont. This is considered the safest Liberal riding in the entire country. The Liberals have lost it only once since 1935 prior to tonight. The Liberals ran a high profile star candidate hand picked by Stephane Dion and condemned by B'nai Brith. The NDP have taken this riding rather convincingly. It is only the second time ever the NDP have ever one a seat in Quebec.
This may only be a by election which does not necessarily reflect the outcome if there were to be a general election. The implications are huge. The NDP have now established an outpost where they can try to legitimately win seats in Quebec. It is another stinging blow to Stephane Dion's leadership. There is no way that he will be able to bring down the government in the fall. I am sure Harper will use this to rub some more salt into his wounds as the Liberals will be forced to accept a thrown speech they don't like. It also creates more doubts for the Liberals of their leader's ability to ever win an election. Dion may become only the 3rd Liberal leader since confederation not to become Prime Minister.
Monday, June 4, 2007
Joke of the week!!!
Dalton McGuinty and the provincial Liberals unofficially launched their re-election campaign this weekend. They promised that they will not raise taxes.
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