Tag Archives: Budget 2016

Roundup: Boutique tax credits for everyone!

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The very first Private Members’ Bill up on the docket to be debated is one that give me a real headache, and it’s one that should be disallowed from being voteable, all because of a wee little loophole in the rules. The bill, from Conservative MP Ted Falk, aims to increase the tax rebate which charities receive to match the same level that one gets for political donations. The problem? That this is really an expenditure, and private members’ bills are forbidden to spend money without a royal recommendation (though MPs have gone to increasingly ridiculous lengths in recent years to try and contort logic to pretend that those bills don’t spend money when in fact they do). The even bigger problem? That a loophole currently exists in the rules that makes it technically possible for these bills asking for a tax credit to bypass the spending rules because technically (and under the way that procedure is interpreted) the bill seeks to reduce tax paid, not increase or expend taxes. That’s not actually true, mind you – ask the Auditor General or any decent economist and they’ll tell you in no uncertain terms that tax credits are actually expenditures, and unfortunately there is precedent on Falk’s side, particularly with a certain PMB from Dan McTeague several parliaments ago where he got a tax deduction in under that technicality and it was deemed to be in order. The government repealed the measure in their next budget, but the bill got though when really it shouldn’t have. Unfortunately it opened the door to these kinds of bills that are looking to create new boutique tax credits, and that’s a problem. Our tax code is already thousands of pages, and far too complex. Boutique tax credits are actually terrible policy, but governments have decided that they’re good politics because they feel like they’re rewarding certain groups for certain behaviours, and damn the consequences. The Auditor General has sounded the alarm that these measures aren’t being properly tracked because they’re not deemed expenditures (even though they are), which means that they’re not being given proper parliamentary oversight to ensure that it’s money that’s being well spent – and he found many cases where it’s not. But as Falk is demonstrating, the floodgates are opening, and it won’t be long before the Order Paper is replete with these PMBs demanding new boutique tax credits for everything under the sun, to encourage all manner of behaviour that they deem a social good, under the rubric that they’re not spending any money and thus within the rules. It’s a loophole that Parliament needs to set upon itself to close for the sake of the tax code and parliament’s ability to hold these kinds of spending measures to account. Sadly, one suspects that in their self-interest, MPs won’t make the needed rule change and we can expect this situation to get worse with every passing parliamentary session.

https://twitter.com/avelshi/status/704465684797915136

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QP: Haze and incoherence

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A slushy and wet day in Ottawa, and the PM was headed off to Montreal instead of being in QP. Rona Ambrose led off, mini-lectern again on Andrew Scheer’s desk instead of her own, and complained about the incoherence of the current government’s messaging. Navdeep Bains got up to respond, pointing out that the previous government turned a surplus into a deficit and touted their own plan for creating jobs. Ambrose complained about the size of the deficit, to which Bains insisted that they have a plan to grow the economy and make it more productive. Ambrose then insisted that Trudeau was imposing a national carbon tax, and this time Catherine McKenna got up and quoted Suncor’s CEO and Preston Manning as fans of carbon pricing. Maxime Bernier was up next, and he complained of the broken promise around the size of the deficit. Marc Garneau responded to this question, stating that Conservative cuts in the current economic situation could push the country into recession. Bernier insisted that deeper debt would not create wealth, and Garneau read some talking points about the importance of their own plan. Charlie Angus led off for the NDP, who noted a suicide in Moose Factory in his riding, and wanted a plan to end the discrimination in funding. Jean-Yves Duclos responded to this one, and he said that federal and provincial partners were working together on the complex issues. Angus listed the health problems on reserves, demanding action yesterday, for which Duclos reiterate that they were working with First Nations on a nation-to-nation basis to provide inclusive and sustainable circumstances. Marjolaine Boutin-Sweet asked the same again in French, got the same answer from Duclos in French, and for her final question, demanded action on proportional representation. Maryam Monsef stated that she looked forward to meaningful consultations.

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Roundup: Giorno joins the brigade

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Proponents of proportional representation are getting a bit of a boost across party lines as former Harper advisor Guy Giorno is adding his name to the so-called “Every Voter Counts Alliance” to push the government to adopt such a measure. (Note that the name of this group is hugely problematic because every vote already counts, and suggesting otherwise is tantamount to voter suppression). Giorno says the Conservatives shouldn’t be afraid that changing the system will mean that they will be permanently shut out of power (as is one of the arguments that proponents tout as a feature of the change), before launching into the usual talking points of “fairer” and “more democratic” which are a) complete bunk, and b) at a direct cost to the system of accountability that the existing First-Past-The-Post system is really good at achieving. Also, it’s a bit rich to hear the hyper-partisan Giorno talk about how wonderful it would be for PR-elected legislatures to require more co-operation, collegiality, working together” – all of which is ridiculous, since it simply changes the power calculus in order to keep coalitions cobbled together and giving smaller and more radical parties outsized influence to keep those coalitions together, while parties at the centre of governments can go for decades without being tossed out as they shuffle coalition partners around instead (again, a feature of our current system being the ability to throw the bums out, which PR does not do very well). Suffice to say, Giorno’s voice in the debate doesn’t actually change that the arguments are based on emotion and logical fallacies, and while he has different partisan credentials, it’s still a system that that nobody should be rushing into on the basis of emotion. Meanwhile, here’s Colby Cosh to demolish some of the arguments.

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QP: Sad to see them go

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On a snowy day in Ottawa, the parties were riled up after their caucus meetings, and ready to go for QP. Rona Ambrose led off, this time putting her mini-lectern on Andrew Scheer’s desk in order to get a different camera angle, and she wondered if the government was making up their deficit plans and they go along. Justin Trudeau chided the Conservatives for their decade of low growth, and noted their commitment to growth. Ambrose asked the same question in French, and Trudeau responded that they were creating jobs. Ambrose then moved to the issue of the CF-18s and noted an American General was “sad to see them go.” Trudeau retorted that our allies were glad that we stepped up our role in the fight against ISIS. Jason Kenney asked a meandering question about deficits and taxes, for which Trudeau praised investment in infrastructure, jobs and the middle class. Kenney wondered which taxes they would increase to pay for their deficits, to which Trudeau noted that the Conservatives had no idea about how to create growth in the economy. Thomas Mulcair was up next, and mentioned a First Nations community that was declaring a state of emergency for their everyday existence, and Trudeau thanked him for raising the issue and noted their promise to reset the relationship with First Nations. Mulcair moved to the question of a commitment to build a maintenance centre for Bombardier C-Series jets, for which Trudeau praised the agreement with Air Canada and Bombardier. Mulcair asked again in French, got the same answer, and for his final question, Mulcair demanded the stock option tax loophole, but Trudeau told him to wait for the budget.

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Roundup: Mindless populism leading the way

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As Saskatchewan premier Brad Wall has made his voice heard in recent weeks in the lead-up to his re-election campaign, and the Conservatives in Ottawa have taken up his banner on all manner of topics, it is the issue of carbon pricing that is driving home a few truths about both Wall and the Conservative Party. While there is talk about setting a baseline $15/tonne carbon price nationally, which can be implemented either by carbon tax (per BC) or cap-and-trade (per Ontario and Quebec), Wall is adamant that he doesn’t want it imposed on his province, and is going so far as to suggest that any “national carbon tax” (which, let’s be clear, it is not what is being discussed) would be exempt from SaskPower because it’s a provincial Crown corporation. And in the House of Commons, former Speaker Andrew Scheer gave a ridiculous and gobsmackingly boneheaded Members’ Statement on Monday which mocked the notion of a “carbon tax” (which, again, not on the table) as a market mechanism, and tried to apply it to other forms of taxation, generally making a fool out of himself in the process. But if you listen to what both Wall and Conservatives like Scheer are saying, it becomes obvious that intelligent, principled conservatism in this country has pretty much gone the way of the Dodo, and that we are left with right-flavoured populism in its wake. Because seriously, an actual conservative thinker would look at a carbon price, and using whichever mechanism (but likely an actual carbon tax), use that in order to encourage the market to find their own ways to reduce their carbon emissions. In fact, it’s what the oil sector has been demanding for years now, and they’ve even built carbon pricing into their books while they waited for some kind of direction as to just how much it would be and by what mechanism it would be applied. But rather than having an actual conservative government that would take this tool to and use the market to innovate and achieve the desired end (being lower carbon emissions), you have a bunch of populists in both Saskatchewan and Ottawa who howled instead about a fictional “job-killing carbon tax” and who held their breath and stamped their feet rather than dealing with the problem of carbon emissions for an entire decade. So while the Conservative Party starts to re-examine itself in advance of its leadership contest, perhaps this is something that they should consider – a return to actual conservative principles rather than this populist noise, which resulted in a decade of poor economic decisions (like lowering the GST), incoherent policy decisions, and as we can see here, childish tantrums to what should be an actual conservative approach to solving problems.

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QP: Flailing about the deficit

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Fallout from the financial update was still front and centre, and Rona Ambrose was off the mark to insist that deficits meant higher taxes in the long run. Trudeau immediately went into his talking points about investment and growth. Ambrose tried to burnish her previous government’s fiscal record, and claimed that our world leadership was in jeopardy (if it even existed). Trudeau hit back that Canadians didn’t believe in the Conservative record. Ambrose demanded immediate action on pipelines to create jobs, but Trudeau insisted that the only way to get projects off the ground was to do it in an environmentally responsible way. Maxime Bernier was up next, and railed about the size of deficits, to which Bill Morneau, without notes and in French, responded with points about investing in the economy. When Bernier pressed, Morneau insisted that the Conservatives left them in a hole that meant they had to start further behind. Thomas Mulcair got up next, and insisted that there was no firm commitment for Bombardier to do maintenance in Canada. Trudeau praised the agreement and everything it offered. Mulcair asked again in English, bringing in the Aveos contract, but Trudeau insisted that they were supporting the aerospace industry. Mulcair turned to EI benefits, and demanded immediate reforms to hours and eligibility, and Trudeau agreed that they were making changes. Mulcair asked again in French, and got the same answer.

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Roundup: The expanded deficit

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The big news yesterday was of course Bill Morneau’s fiscal update, in which he said that the deficit was slated to rise to $18.4 billion – and then everyone freaked out. But if you take a breath, you’ll see that in there is about $6 billion of wiggle room (or “fudge” as Andrew Coyne called it) when they adjusted down the growth projections of private sector economists – which have been particularly optimistic. As well, much of the current-year deficit is driven by lower revenues rather than new spending, despite what the Conservatives say, which is why the Liberals thought it clever to remark in QP yesterday in response to questions about the deficit that the Conservatives and NDP would be cutting all over the place in order to keep a balanced budget (to which Lisa Raitt, on the evening politics shows, rather indignantly replied “You don’t know that.”)

https://twitter.com/stephen_tapp/status/701799653826813952

As part of the changed fiscal picture, the “savings” the previous government booked for changing public service sick leave is now back in books (not that it would have actually achieved savings in the first place). Stephen Gordon wonders if spending to spur growth is the right policy when this period of low growth may not actually be temporary, but rather might be the new normal. Kevin Milligan on the other hand notes that because it’s so cheap to borrow right now that going into deficit won’t really cost as much in the future, as we are not in the same situation as we were 25 years ago. Maclean’s charts the worsening fiscal situation. Kevin Page has questions about the “holes” in the fiscal update. Morneau also hired Dominic Barton as a growth consultant, which likely means a focus on Asia.

https://twitter.com/MikePMoffatt/status/701796830795931648

https://twitter.com/MikePMoffatt/status/701797622537986049

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QP: Scattering instead of pressing

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Bill Morneau’s fiscal update a couple of hours previous before touched off a partisan storm over social media, which was bound to carry over into QP. Rona Ambrose, mini-lectern on desk, led off by reading a question about the size of the deficit. Justin Trudeau reminded her that they ran a campaign on investing to promote growth. Ambrose demanded to know who would pay for it all, at which Trudeau retorted that that they were already paying for the previous ten years of poor growth. Ambrose tried to burnish the previous government’s record, but Trudeau accused them of creative accounting. Gerard Deltell demanded controlled public spending, for which Trudeau reiterated his response about fudged numbers. Deltell gave it one last kick, and got the same answer. Thomas Mulcair was up next, and demanded the government respect the rights of Aveos workers rather than amend Air Canada’s legislation. Trudeau responded that they were proud that the agreement with Bombardier would encourage investment in aerospace. Mulcair asked again in English, got largely the same answer, and then demanded reforms to the EI system. Trudeau reminded him that they promised to strengthen the system, and they were going to. Mulcair demanded a universal eligibility threshold as part of that reform, and Trudeau reiterated that they were making needed changes.

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Roundup: Cullen pens a hot mess

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NDP MP Nathan Cullen penned an op-ed for National Newswatch over the weekend, and it’s a total hot mess. Hot. Mess. Where to begin, where to begin? Let’s start with the opening paragraph:

One of the recurring conversations I’ve had over the years, with folks of all political leanings, is the condition of our democracy and how our voting system doesn’t reflect their voices at the national level.

Demonstrably false, since what we vote for are who to fill individual seats. People who are elected to those seats are the reflection of the wishes of that riding. Ergo, our voting system actually is reflective of voices at the national level. The entire second paragraph is a gong show:

It’s not a new charge that the first-past-the-post (FPTP) voting system too often produces false majorities. Our current voting system is broken. Too many Canadians simply feel their vote does not count. Something is deeply wrong if our very voting system encourages people to tune out of our democratic process.

Nope, nope, nope, and nope. There is no such thing as a “false majority” because the popular vote is a logical fallacy. You can’t extend 338 separate and simultaneous elections, mash them together and come up with a figure when you don’t have the same number of parties running in all ridings, nor does it reflect the fact that we elect individual seats, not parties. The voting system is not broken – it accurately reflects that we elect individual seats in individual ridings. Canadians feel their vote doesn’t count because of sore loserism, and apparently votes only count when the person you voted for wins, which is childish and wrong. Our voting system does not encourage people to tune out of our democratic process – our appalling lack of civic literacy does. From there, Cullen goes on to defend his idea of a “proportional” Commons committee to consult on electoral reform, except it’s a) not proportional, b) it’s designed to play up his desire for proportional representation (if the committee can be proportional…) and c) it’s designed to game the process, while he professes new ways of doing things. From there, Cullen meanders into a defence of the NDP as “progressive opposition,” which sounds more defensive by the day as the Liberals continue to outflank the party on the left, and finally, the piece moves into a defence of Thomas Mulcair as party leader, with Cullen professing support – you know, to look like he’s not angling to replace him should Mulcair happen to fall well short of expectations at the upcoming leadership review vote. After all, the federal NDP have a culture of it being unseemly to not be in complete and total lockstep at all times when the cameras are on. So there you have it – a complete hot mess. What is that old journalistic expression? Get me rewrite.

https://twitter.com/jameslhsprague/status/699297692837666816

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QP: Overwrought and obfuscating 

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After some of the soaring (well, overwrought in any case) rhetoric of today’s supply day motion on condemning the BDS movement, everyone was on-hand for QP, which one hoped would not be nearly so melodramatic. Rona Ambrose led off, mini-lectern on desk, and lamented that the CF-18s have ended their bombing mission before the debate and vote — as though it was a vote on authorization and not supporting the government’s plan. Justin Trudeau reminded her that Canadians voted for his plan. Ambrose then noted the job losses at Bombardier and wondered why aid was being considered for that company but no support was being offered for Energy East. Trudeau reminded her that he supported getting resources to market, but they needed a different process than the failed one that the Conservatives followed. Ambrose asked a muddled question about getting people back to work, to which Trudeau reminded her that his party was committed to EI reform, not hers. Gerard Deltell demanded aid for the families affected by the Bombardier layoffs, at which point Trudeau noted a decade of neglect by the previous government while his was working with the provinces. Deltell insisted that the Toronto Island Airport was the key to reversing these job cuts (as opposed to Bombardier’s poor management), but Trudeau reminded him of the contract signed with Air Canada. Leading off for the NDP was Irene Mathyssen who read some tired outrage about the TPP, for which Trudeau reminded her that the trade minister was engaged in consultations and that it would be brought up for debate in the Commons. Mathyssen asked the same thing again, got the same answer, and then Alexandre Boulerice demanded help for Bombardier. Trudeau reminded him that they were working for with the provinces. Boulerice closed the round with thundering denunciation of the job losses from the previous Air Canada maintenance contract dispute, but Trudeau reminded him that overheated rhetoric helped nobody.

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