Tuesday, May 02, 2006

Budget Day

Unless you want to go the route of feigned surprise (either in the form of outrage or delight), there's not a lot to say about a budget like this which was oh so predictable. Even though we didn't get any major leaks (aside from the fictional ones on Garth Turner's blog), the entire election campaign was about this budget so it's hard to be genuinely surprised about anything (gasp! tax cuts!).

A lot of commentators are calling it a pre-election budget but it's very much a post-election budget. The Tories absolutely needed to follow through on their election promises since next election they'll be running on their record, rather than against Adscam or the "time for a change" wave of momentum. If Harper can develop a reputation as someone who follows through on his promises, he'll be unbeatable in the next election campaign. In that respect, he did a good job following through on a lot of his major promises today. And the targeted tax breaks for things like textbooks and transit are certainly aimed at winning seats in the cities where the Tories are still weak (pretty much all cities besides Calgary and Edmonton).

The most interesting thing to come out of the day is the promise for a meeting with the Premiers in the fall to deal with the "fiscal imbalance". That meeting could very well prove to be the make it or break it event of this minority government's life which will decide how long the government survives and how Harper does comes next election.

34 Comments:

  • A quick look at the 2 year numbers indicates that they divided the 1% reduction in income tax ($6B) into 3 parts:

    * retained half of it
    * $1000 credit to the employed
    * $1000 credit to the retired

    (Progressivity increases slightly due to credits wiping out 100% of tax at the bottom.)

    Bottom line:

    * Contrast to the Liberal tax reduction is sharpened.
    * GST reductions contrast to the new program spending from Liberal budgets and pre-elections campaigns.
    * Tax reduction is double the new program spending.

    By Blogger anonymous, at 7:03 PM  

  • Crap! The Cons are polling ahead of the Bloc in Quebec.

    I'm going to go drown my sorrows in some maple liqueur now.

    By Blogger Political Geek, at 7:19 PM  

  • Well, all cities except Edmonton, Calgary, Prince George, Kelowna, Kamloops, Saskatoon, Regina, Winnipeg, Ottawa, Quebec City and St.John's...so basically, Tor-Mtl-Van.

    By Blogger ALW, at 7:31 PM  

  • PS - geek, why is that bad? Shouldn't we be happy that the Bloc is fading? Or are you a partisan before you are a federalist?

    By Blogger ALW, at 7:33 PM  

  • alw:

    At CPC 34 Liberal 15 I would not assume the Liberals are ahead of the Tories in Montreal anymore.

    By Blogger anonymous, at 7:47 PM  

  • If the transit credit pushes more riders onto buses, where is the infrastructure money to enable cities to get more buses/subways? 5.5b is not enough.

    Hiring more RCMP officers is going to solve crime? What about the poverty in aboriginal communities that are now w/o the Kelowna(spelling?) agreement?

    Students get tax breaks when most dont pay taxes at all. Mr Harper must think students are dumb.

    Why does a single income family earning over $200K get the most benefit out of the $1200 childcare allowance? This is almost absurd.

    Mr. Harper gives peanuts with the GST cut, and takes away chunks by raising income taxes. And then he calls it a tax relief budget.

    To be fair, he did keep his promises.

    By Blogger mezba, at 8:31 PM  

  • anonymous,

    where exactly would that 15% come from??

    West Island, Central Anglo Montreal.

    Toronto East, you could call it.

    By Blogger Chuckercanuck, at 8:49 PM  

  • I don't think there's anyone out there who thinks the transit breaks will push for users onto the bus.

    It might mean more expensive bus passes though...

    By Blogger calgarygrit, at 8:49 PM  

  • Shouldn't we be happy that the Bloc is fading?Or are you a partisan before you are a federalist?

    I personally like having the Bloc around. With separation on the wane that particular threat is presently negligible. It's the BQs voice on the left I feel make them a valuable commodity in helping stem the ever increasing right-wing course that is being set for the country.

    By Blogger Lord Omar, at 9:00 PM  

  • "If Harper can develop a reputation as someone who follows through on his promises, he'll be unbeatable in the next election campaign."

    Sadly, that is probably true.

    By Blogger Steve V, at 10:42 PM  

  • Go Hurricanes Go

    By Blogger iloveLaP, at 10:46 PM  

  • Screw the hurricanes!! In a perfect world there would be a reserved spot for Justin Williams in one of Harper's soon to be built mega-prisons!

    jk

    Nothing surprising with the budget.....the tax breaks for metropass users would have made more sense if there was a larger chunk of money allocated to improving public transit.

    By Blogger senai, at 7:57 AM  

  • A lot of commentators are calling it a pre-election budget but it's very much a post-election budget.

    That is by far the best description of the budget.

    If the transit credit pushes more riders onto buses, where is the infrastructure money to enable cities to get more buses/subways? 5.5b is not enough.

    Is is 5.5 billion of FEDERAL money not enough? Don't provinces have a role in this as well? What are your thoughts on C-3?

    By Blogger eastern capitalist, at 8:26 AM  

  • "If Harper can develop a reputation as someone who follows through on his promises, he'll be unbeatable in the next election campaign."

    Do what you say you are going to do - What a novel concept! It seems to me we haven't encountered that type of philosophy for let's see here, maybe 12 or 13 years?

    By Blogger Joanne (True Blue), at 8:30 AM  

  • This is just another Liberal budget in a long line of Liberal budgets.

    With health care waiting lists.

    Huge infrastucture back logs.

    Education increasingly only for the select few who can afford it.

    Almost unheard of levels of wealth concentration.

    And what do we get?

    Negligable tax cuts partially funded by a tax increase on the poor.

    The only thing that differentiates this budget from a Liberal budget is that the Conservatives promised this right wing crap in the first place, the Liberals just gave the same result but they would lie about planning to do it in the first place.

    Its a breath of fresh air to see honest Liberals (conservatives) rather than dishonest Liberals (Liberals.)

    By Blogger davidt, at 8:51 AM  

  • Omar,

    Federal spending is up again - and this is supposedly a radical, right-wing budget? If only!

    You can disagree with particular initiatives in this budget, but it's hardly a blueprint for some radical conservative agenda of a minimalist state. Sometimes it seems that critics confuse "I don't agree with this" with "these guys are radical right wingers"

    By Blogger ALW, at 9:00 AM  

  • EC: I would rather see the money the government loses in the bus pass tax credit (its small change to individuals but big to government coffers) go to buying new buses and subways for the transit systems.

    By Blogger mezba, at 9:15 AM  

  • The most interesting thing for me in the budget was it seems to outline Harper's approach to solving the fiscal imbalance. He is basically going to reduce the surpluses and give the money back to the Canadian people.

    End result, provinces stop whining if the federal government doesn't have loads of cash. Maybe then they'll be forced to come up with their own money

    By Blogger Justin, at 9:39 AM  

  • alw,

    Federal spending is up again - and this is supposedly a radical, right-wing budget? If only!

    And you feel that a budget brought down by a minority government 3months into it's mandate and a need to fulfil campaign promises is somehow indictative of what Harper would have in store if he had a majority of seats in the House?
    If only!

    By Blogger Lord Omar, at 10:15 AM  

  • "The Tories absolutely needed to follow through on their election promises since next election they'll be running on their record, rather than against Adscam or the "time for a change" wave of momentum."

    I would be very surprised if the Tories are not able to take advantage of the Liberal record/Adscam next time around.

    In the UK the eloctorate are STILL punishing the Tories for their sins of nine plus years ago despite the wreck that the Blair ministry has turned into.

    By Blogger colin, at 10:15 AM  

  • True, Colin, but to be blunt, Martin isn't Thatcher.

    By Blogger Demosthenes, at 10:33 AM  

  • This is far from a right-wing budget. When is someone in Ottawa going to come to grips with the fact that government spending has to be cut before the next recession hits?

    By Blogger nuna d. above, at 11:45 AM  

  • Well balanced budget.

    When I watch CPAC and see every special interest group say "it's a start but it is no where near what we need to solve the problem." I figure the numbers are just about right.

    I loved the CBC last night where people were complaining they were only receiving $2000/year or $1100/year in savings. I guess it just goes to show eveyone how overtaxed everyone feels they are.

    For the fella who likes the Bloc because they are communist (no hyperbole intended) shake your head. The majority of those that support the bloc are not communists, they are simply separatists and to support that party does nothing to further socialist change only separation. (they are supporting the budget because of transfer payment issues, in other words, tax relief, how drole.)

    By Blogger NorthBayTrapper, at 11:59 AM  

  • For the fella who likes the Bloc because they are communist (no hyperbole intended) shake your head.

    I like the Bloc because they are neither communist nor socialist. They are a left of centre workers party who reflect my progressive values more than Harper and his gang ever will. If people actually took the time to be educate themselves as to what the actual philosophies of communism and socialism are, then they wouldn't need to be shaking their heads about perceived Canadian Stalinism.

    By Blogger Lord Omar, at 12:30 PM  

  • >When I watch CPAC and see every special interest group say "it's a start but it is no where near what we need to solve the problem."

    The whine goes more like this: "it's no where near what we need to solve _our_ problem."

    When the complaints come mostly from the people with their hands out, and people who just want more tax cuts, you know you're doing well.

    By Blogger AwaWiYe, at 4:12 PM  

  • A fellow I know, who is the most virulently anti-Harper person in my acquaintance, had no comments at all on the budget - he was pleasantly surprised.

    Personally, I don't feel Harper is any sort of lurking 'right-wing werewolf' biding his time til a 'majority full moon' peeks out the clouds. He's a conservative, and that doesn't equate with evil, darlings, not any more than being liberal does.

    By Blogger Lois, at 7:08 PM  

  • Please Read the Fine Print

    Well, I was writing this note on the budget which I wanted share with you and I wanted to provide the link to the Finance Department and guess what, someone pulled the plug. Go figure how can they (Government) expect us who live away from government access facilities expect to get our information. Does any one know what happen to the Finance Department Web Site?

    The Conservatives mentioned yesterday that this budget will give you tax breaks however the way I read it the only way you can get a break is by spending more. I have just one question: where will the money come from? Tax Credits are reimbursed only when Personal Tax Returns are filed. Meanwhile what do I do, will I have to borrow money to get my kids in sports or buy a buss pass?

    Last November’s Liberal Economic Statement gave everyone a reduction of 1% on their basic tax rate (from 16% to 15%) money in our pockets. Now the Conservatives will increase this rate to 15.5% July 1st by the way, this translates to 15.25% for 2006 but wait, that’s not all, basic personal exemptions increased to $9,039 January 1st 2006 (again more money in our pockets) unfortunately as of July 1st this is rolled back.

    But, how about those famous tax credits you say?

    If you’re a worker, you’ll get a tax credit of $1,000 (or) at 15.25% for 2006 that’s $152.50 but first you got to pay the bills.

    If you’re a pensioner you’ll see your pension exemption increased from $1,000 to $2,000 again a saving or $152.50.

    But wait, that’s not all, there’s more!

    If you’re a student you get a $520 tax credit for text books. At 15.25% that’s $79.20 for 2006. I don’t know about you but the last time I purchased a University text book I paid a lot more than $80.00 for a single book. Oh yea, you’ll be able to borrow more through student loans.

    And, that’s not all; there’s more!

    If you have kids age17 and under registered in organized sports, you get yet one more tax credit; $500 each child. That sounds good, right? There’s only one catch, you first got to pay the bills. Have you read the fine print on this one too? The administration proposed by the Government for this is going to be through the roof. We all know that most sport organizations are run by volunteers now do you know what these hard working volunteers will have to do extra? They’ll have to issue official tax receipts, maintain official records and notify Canada Revenue Agency with all this information, and all that for a savings of up to $76.25 per child for 2006. Do you think it’s going to be easy for parents to get this tax credit? You should read all the restrictions, parents are going to have to jump through loops in order to qualify. Oh, and they better jump with their kids!

    How about this $100 per month allowance for each child under 6? (At last, money in our pockets you say) But wait, this money will be taxed as income to the spouse in the lower tax bracket, normally the stay at home mom. Now if this is her only income she want pay tax but now, because of this income she’ll find her personal exemption reduced by $1,200 and you know what, her husband will see her tax exemption on his tax return reduced by amount. Now, do you think he’ll be happy paying more taxes? I don’t think so.

    To some of you it may sound like I’m just complaining about the budget tabled by the Conservatives yesterday and yes you’re right. Big deal, we get to see our GST reduced by 1%. Now unless you’re a big spender and buy big ticket items who will notice a penny less on a candy bar? Do you honestly think Convenience Stores will reduce their candy bars and chips by a penny? I don’t think so. If you currently pay $1.25 for a candy bar it will stay the same, where’s the big saving? Yea I know, the Liberals with their popcorn and beer fiasco during the last election but you know what they weren’t that far out, only the timing was wrong and it made for bad press.

    Now, this brings me back to my opening comments. Who pulled the plug on the Finance Department Web Site? Is someone trying to control what the general public has access to? You know, these Conservatives are getting to be “Masters” in controlling information going out. And, this I didn’t make that up!

    Oh, one last thing, I’m a Tax Accountant and since yesterday I’m smiling. I can’t hardly wait until next year when I’ll get to file all these tax returns for my clients and how much more I’ll be able to charge them because of the extra work with all these receipts for buss passes, sport registrations, tools etc…but what the heck, they’ll save 1% on their GST!

    And to think that people voted for changes! Ah well, until the next time.

    By Blogger Marcel, at 7:56 PM  

  • Please Read the Fine Print

    Well, I was writing this note on the budget which I wanted share with you and I wanted to provide the link to the Finance Department and guess what, someone pulled the plug. Go figure how can they (Government) expect us who live away from government access facilities expect to get our information. Does any one know what happen to the Finance Department Web Site?

    The Conservatives mentioned yesterday that this budget will give you tax breaks however the way I read it the only way you can get a break is by spending more. I have just one question: where will the money come from? Tax Credits are reimbursed only when Personal Tax Returns are filed. Meanwhile what do I do, will I have to borrow money to get my kids in sports or buy a buss pass?

    Last November’s Liberal Economic Statement gave everyone a reduction of 1% on their basic tax rate (from 16% to 15%) money in our pockets. Now the Conservatives will increase this rate to 15.5% July 1st by the way, this translates to 15.25% for 2006 but wait, that’s not all, basic personal exemptions increased to $9,039 January 1st 2006 (again more money in our pockets) unfortunately as of July 1st this is rolled back.

    But, how about those famous tax credits you say?

    If you’re a worker, you’ll get a tax credit of $1,000 (or) at 15.25% for 2006 that’s $152.50 but first you got to pay the bills.

    If you’re a pensioner you’ll see your pension exemption increased from $1,000 to $2,000 again a saving or $152.50.

    But wait, that’s not all, there’s more!

    If you’re a student you get a $520 tax credit for text books. At 15.25% that’s $79.20 for 2006. I don’t know about you but the last time I purchased a University text book I paid a lot more than $80.00 for a single book. Oh yea, you’ll be able to borrow more through student loans.

    And, that’s not all; there’s more!

    If you have kids age17 and under registered in organized sports, you get yet one more tax credit; $500 each child. That sounds good, right? There’s only one catch, you first got to pay the bills. Have you read the fine print on this one too? The administration proposed by the Government for this is going to be through the roof. We all know that most sport organizations are run by volunteers now do you know what these hard working volunteers will have to do extra? They’ll have to issue official tax receipts, maintain official records and notify Canada Revenue Agency with all this information, and all that for a savings of up to $76.25 per child for 2006. Do you think it’s going to be easy for parents to get this tax credit? You should read all the restrictions, parents are going to have to jump through loops in order to qualify. Oh, and they better jump with their kids!

    How about this $100 per month allowance for each child under 6? (At last, money in our pockets you say) But wait, this money will be taxed as income to the spouse in the lower tax bracket, normally the stay at home mom. Now if this is her only income she want pay tax but now, because of this income she’ll find her personal exemption reduced by $1,200 and you know what, her husband will see her tax exemption on his tax return reduced by amount. Now, do you think he’ll be happy paying more taxes? I don’t think so.

    To some of you it may sound like I’m just complaining about the budget tabled by the Conservatives yesterday and yes you’re right. Big deal, we get to see our GST reduced by 1%. Now unless you’re a big spender and buy big ticket items who will notice a penny less on a candy bar? Do you honestly think Convenience Stores will reduce their candy bars and chips by a penny? I don’t think so. If you currently pay $1.25 for a candy bar it will stay the same, where’s the big saving? Yea I know, the Liberals with their popcorn and beer fiasco during the last election but you know what they weren’t that far out, only the timing was wrong and it made for bad press.

    Now, this brings me back to my opening comments. Who pulled the plug on the Finance Department Web Site? Is someone trying to control what the general public has access to? You know, these Conservatives are getting to be “Masters” in controlling information going out. And, this I didn’t make that up!

    Oh, one last thing, I’m a Tax Accountant and since yesterday I’m smiling. I can’t hardly wait until next year when I’ll get to file all these tax returns for my clients and how much more I’ll be able to charge them because of the extra work with all these receipts for buss passes, sport registrations, tools etc…but what the heck, they’ll save 1% on their GST!

    And to think that people voted for changes! Ah well, until the next time.

    By Blogger Marcel, at 7:56 PM  

  • Please Read the Fine Print

    Well, I was writing this note on the budget which I wanted share with you and I wanted to provide the link to the Finance Department and guess what, someone pulled the plug. Go figure how can they (Government) expect us who live away from government access facilities expect to get our information. Does any one know what happen to the Finance Department Web Site?

    The Conservatives mentioned yesterday that this budget will give you tax breaks however the way I read it the only way you can get a break is by spending more. I have just one question: where will the money come from? Tax Credits are reimbursed only when Personal Tax Returns are filed. Meanwhile what do I do, will I have to borrow money to get my kids in sports or buy a buss pass?

    Last November’s Liberal Economic Statement gave everyone a reduction of 1% on their basic tax rate (from 16% to 15%) money in our pockets. Now the Conservatives will increase this rate to 15.5% July 1st by the way, this translates to 15.25% for 2006 but wait, that’s not all, basic personal exemptions increased to $9,039 January 1st 2006 (again more money in our pockets) unfortunately as of July 1st this is rolled back.

    But, how about those famous tax credits you say?

    If you’re a worker, you’ll get a tax credit of $1,000 (or) at 15.25% for 2006 that’s $152.50 but first you got to pay the bills.

    If you’re a pensioner you’ll see your pension exemption increased from $1,000 to $2,000 again a saving or $152.50.

    But wait, that’s not all, there’s more!

    If you’re a student you get a $520 tax credit for text books. At 15.25% that’s $79.20 for 2006. I don’t know about you but the last time I purchased a University text book I paid a lot more than $80.00 for a single book. Oh yea, you’ll be able to borrow more through student loans.

    And, that’s not all; there’s more!

    If you have kids age17 and under registered in organized sports, you get yet one more tax credit; $500 each child. That sounds good, right? There’s only one catch, you first got to pay the bills. Have you read the fine print on this one too? The administration proposed by the Government for this is going to be through the roof. We all know that most sport organizations are run by volunteers now do you know what these hard working volunteers will have to do extra? They’ll have to issue official tax receipts, maintain official records and notify Canada Revenue Agency with all this information, and all that for a savings of up to $76.25 per child for 2006. Do you think it’s going to be easy for parents to get this tax credit? You should read all the restrictions, parents are going to have to jump through loops in order to qualify. Oh, and they better jump with their kids!

    How about this $100 per month allowance for each child under 6? (At last, money in our pockets you say) But wait, this money will be taxed as income to the spouse in the lower tax bracket, normally the stay at home mom. Now if this is her only income she want pay tax but now, because of this income she’ll find her personal exemption reduced by $1,200 and you know what, her husband will see her tax exemption on his tax return reduced by amount. Now, do you think he’ll be happy paying more taxes? I don’t think so.

    To some of you it may sound like I’m just complaining about the budget tabled by the Conservatives yesterday and yes you’re right. Big deal, we get to see our GST reduced by 1%. Now unless you’re a big spender and buy big ticket items who will notice a penny less on a candy bar? Do you honestly think Convenience Stores will reduce their candy bars and chips by a penny? I don’t think so. If you currently pay $1.25 for a candy bar it will stay the same, where’s the big saving? Yea I know, the Liberals with their popcorn and beer fiasco during the last election but you know what they weren’t that far out, only the timing was wrong and it made for bad press.

    Now, this brings me back to my opening comments. Who pulled the plug on the Finance Department Web Site? Is someone trying to control what the general public has access to? You know, these Conservatives are getting to be “Masters” in controlling information going out. And, this I didn’t make that up!

    Oh, one last thing, I’m a Tax Accountant and since yesterday I’m smiling. I can’t hardly wait until next year when I’ll get to file all these tax returns for my clients and how much more I’ll be able to charge them because of the extra work with all these receipts for buss passes, sport registrations, tools etc…but what the heck, they’ll save 1% on their GST!

    And to think that people voted for changes! Ah well, until the next time.

    By Blogger Marcel, at 7:57 PM  

  • Great post by Marcel. Now let's wait for the right to come and vilify him for critizing PM Pie Wagaon.

    By Blogger Don, at 9:53 AM  

  • Mezba said:
    "Students get tax breaks when most dont pay taxes at all. Mr Harper must think students are dumb."


    95% of my friends all through university (undergraduate and now graduate) have had income of some sort throughout the course of the year. Whether it's part-time/full-time work, scholarships, or TA positions, there's money rolling in, and that means taxes. The elimination of scholarship taxation will be of enormous benefit to me, as will the textbook credit, the transit credit, and since I'm a TA, the $1000 employment credit.

    I realize I'm not "most students," by your calculation, but I don't think Harper is dumb. I think he's nice.

    By Blogger RGM, at 5:18 PM  

  • How about it we vilify him for spamming that big post in numerous unrelated comment threads all over the place?

    By Blogger The Invisible Hand, at 5:56 PM  

  • As promised, The Fine Print!

    Sorry I didn’t follow up on my comments from yesterday earlier but here are three links to the Finance Department

    First, the Liberals Economic and Fiscal Update of November 2005
    http://www.fin.gc.ca/budtoce/2005/ec05_e.html
    Go to Annex 4 under the heading
    “Acceleration of Budget 2005 Increases to the Basic Personal Amounts” do the math, the basic personal exemption for 2006 increased to $9,039
    Then further down, under
    “Reducing Personal Income Taxes Through Tax Rate and Threshold Changes” the basic rate effective January 1 2005 was reduced from 16% to 15%
    Second, here is the Conservatives Budget of May 2, 2006 link
    http://www.fin.gc.ca/budget06/bp/bptoce.htm
    Go to Annex 3 under “Tax Measures: Supplementary Information” and scroll about half way down the text under “Personal Income Tax Measures” and read the “fine print” about what is being tabled with regards to basic personal exemption and personal income tax rate.
    To make matters even worst is the statement made in the budget pamphlet available to the public. See the following link http://www.fin.gc.ca/budget06/pamph/pahelpe.htm it states, that the lowest tax rate was being reduced from 16% to 15.5% July 1 2006 and furthermore, nothing is mentioned of the personal exemptions.
    No wonder the Liberals are pissed off and rightfully said that this budget was in fact a tax increase for lower bracket taxpayers.
    Are all the extra goodies and 1% reduction on GST worth it? I don’t think so.

    By Blogger marcel, at 12:16 AM  

  • I believe what you are saying. But could it be a more productive way to get information on cheap advertising.Without all the Hype that come's with it.
    http://www.mybusinessmarketingcenter.com

    By Blogger Robert, at 6:46 AM  

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