Friday, March 07, 2008

Praise for Dan McTeague: The first post in a one part series

I’m not sure how this made it through the house; I’d be very curious to hear if there’s a precedence for a money bill of this magnitude originating from an opposition MP’s private members bill becoming law. Either way, it’s off to the Senate now:

OTTAWA — The Harper government vowed Thursday to kill legislation introduced by a Liberal MP and quietly passed by the House of Commons that would allow parents to contribute up to $5,000 a year to their children's education and deduct it
from their income tax.

As a very politically astute friend of mine commented – it’s a sad state of affairs for the Liberals when Dan McTeague is the ideas guy in the party. At the same time, it doesn’t say much for Jim Flaherty that McTeague may have come up with something more attractive than anything found in his budget. Regardless, this isn’t a bad idea, assuming the money is there to pay for it (which is debatable).

It probably would make a bit more political sense to offer this in the context of an election campaign, when you could complement it with some support for students from low income families but, by itself, this is a pretty attractive policy for the middle income families that Harper has been targeting over the past few years. Because of that, it's going to cause a ton of headaches for both the Liberals and Conservatives. The Tories are going to have to oppose a popular policy they probably wish they’d thought up, while the Liberals will be on the hot seat if Harper finds a way to turn it into a confidence motion.

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  • Im confused. How is this not a money bill and therefore out of order? Anyone know?

    By Blogger KC, at 6:12 p.m.  

  • actually the opposition passing a money bill against the wishes of the government is a lack of confidence in the government...

    By Blogger Anthony, at 6:16 p.m.  

  • Money bills concern cash being raised through taxes and then spent on specific items - this proposal calls for no spending, but, in effect, lower revenue. While the government needs to be able to secure motions of supply to fund its activities, this is nothing of the sort. Thus, not a money bill or even a matter of confidence.

    Anyhow, if the government retroactively declared this a bill a matter of confidence, the fact that it's already passed third reading would mean that the government had already fallen. While it's true that governments often declare bill or motion X to be a matter of confidence, that's nothing more than a self-fulfilling prophecy - it's like issuing an ultimatum. On the other hand, the only strict matters of confidence are those which authorize the government to levy taxes and spend money. This bill has nothing to do with either.

    By Blogger JG, at 6:55 p.m.  

  • The speaker ruled, in essence, that cutting tax revenues isn't spending money, and so the bill was in order.

    As for confidence, he could pull something similar to what he did with the crime bill in the Senate. Would they really want killing a tax cut to be the motion they fall on though? It might be an election issue even the reluctant Liberal caucus members (and future caucus member/s) could get behind.

    By Blogger Jeff, at 6:57 p.m.  

  • Show your support:

    By Anonymous Anonymous, at 7:20 p.m.  

  • If it was such a brilliant idea, then why not save it for an election campaign?

    It's a nuisance, nothing more.

    By Blogger Möbius, at 7:34 p.m.  

  • Good for Dan!

    Harper and the Conservatives were probably not the only ones who were surprised by this vote.

    I'm sure if Dion or Rae were aware of it, they would have had the Liberals abstain.

    Can someone confirm that Dion actually did vote in favour of something that made sense?

    By Anonymous Anonymous, at 9:12 p.m.  

  • Maybe it's a politically savvy idea, but in terms of access to PSE it is kind of a joke.

    Imagine if Dan had stood up in the HoC and said this in support of his bill: "We need to improve access to PSE. The way we will do this is to give money to the parents of students in inverse proportion to how much they need it. Just to be clear, the richer you are, the more money we'll give you."

    The higher the tax bracket you're in, the more your income tax deduction is worth. Combine that with the fact that people who can afford RESPs tend to be higher income as well, and you can start to understand what a waste this plan is if the goal is access to PSE.

    By Blogger Justin Socie, at 2:42 a.m.  

  • This one will be very easy for the Cons to campaign against. This is clearly a transfer from the less well off to the more well off.
    It is a fact that the more well off take advantage of the RESP program. Since they are in a higher marginal tax bracket, they will get the majority of the benefit from the $900M / year it will cost the Canadian treasury.

    John L.

    By Anonymous Anonymous, at 10:34 a.m.  

  • Cost of the program comes in at $2b , not 900 m as first estimated.

    Now Libs, Dippers and Bloc must give PMSH majority support to run a deficit,
    PMSH will have to cut program spending to pay for it.
    It's not like the Cons wouldn't dearly love to trim some of that special interest fat.

    I suggest we start with cutting taxpayer funds to the CBC.
    Maybe the Senate could be abolished, to pay for it.

    By Blogger wilson, at 10:50 a.m.  

  • McTeague's bill is extremely fiscally irresponsible, will be incredibly costly, and favors the wealthy, and harms the poor and lower middle class.

    The poor and lower middle class pay a much lower marginal tax rate than the upper middle class and wealthy, and thus, this bill constitutes a tax giveaway to the upper middle class and wealthy at the expense of the poor and lower middle class.

    The poor and lower middle class will be further hurt, because provinces will be able to use this bill as a further excuse to raise tuition.

    The country desparately needs an adequate student funding system that works. This proposal though is an abomination.

    RESP's were already a sop to the upper middle class and the wealthy. This makes it immeasurably worse, and busts the budget. And will make it even harder to get a real student funding system in the future.

    By Blogger whyshouldIsellyourwheat, at 11:43 a.m.  

  • I trust those who are arguing this bill is fiscally irresponsible are also arguing that both the TSFA measure the conservatives introduced as well as the extention of the RESP timeline in this most recent budget are also fiscally irresponsible.

    It's not going to be easy for the conservatives to argue against this because they've done the same thing multiple times themselves.

    Besides, as pointed out in various other places, fiscal responsibility is actually against what the conservatives want, that is, the hamstringing of the government to provide any decent services to Canadians in order to be able to claim that the government doesn't provide any decent services, and thus should be reduced further.

    By Anonymous Anonymous, at 1:57 p.m.  

  • //I trust those who are arguing this bill is fiscally irresponsible are also arguing that both the TSFA measure the conservatives introduced as well as the extention of the RESP timeline in this most recent budget are also fiscally irresponsible.//

    TFSP are much better for the poor and lower middle class for anyone who studies the issue, because like with the RRSP (and MacT's RESP), they pay low marginal tax rates whereas the upper middle class and wealthy pay higher marginal tax rates. Most of the poor and lower middle class don't have the pre-tax dollars to put in an RRSP, and because of their lower marginal rates, derive much less benefit from them. Thus, the TFSP benefit the poor and lower middle class much more than RRSP and MacT's RESP.

    If fairness to the poor, the TFSP is much better than RRSP's and MacT's RRSP, by far.

    By Blogger whyshouldIsellyourwheat, at 2:58 p.m.  

  • Maybe Rae/Dion can schedule a re-vote so the Libs can abstain this time?

    By Anonymous Anonymous, at 3:15 p.m.  

  • This would be a very inefficient and inequitable use of public money. If the plan is to increase access, this would be a waste. Like universal tuition fee subsidies it's good for pandering but hardly progressive.

    By Blogger Dale Kirby, at 4:48 p.m.  

  • Dear Canadians,

    We want you to pay $1.05 on your coffee. The Liberals want to make it easier for you to save for your child's post-secondary education. Stephane Dion is not a leader.

    Yours Truly,

    The Tories

    By Blogger Glen, at 6:41 p.m.  

  • //The Liberals want to make it easier for you to save for your child's post-secondary education.//

    The Liberals want to make it easier for the upper middle class and wealthy to save for their child's post-secondary education.

    The tax deduction is a regressive step because wealthier people get more of an advantage than poorer people because of the marginal tax rates they pay. That's why the RESP was designed with a government match in the first place, so rich and poor got the same amount from the government. With the McTeague proposal, the rich get more than the poor.

    By Blogger whyshouldIsellyourwheat, at 6:52 p.m.  

  • seems to me that if a parent pays any income tax, they will be able to make full use of the deduction for their child's tuition. given the high cost of college and university, its a brilliant stroke.the previous post by whyshouldisellyourwheatthat this would benefit the rich, is just plain wrong.Thats why there is a cap of 5k per year.

    Anyone want to guess the estimated cost of a 4 year program in 10 years ? Try 100k

    No the only RESP that works for the rich is the status quo.

    McTeague is bang on.

    By Anonymous Anonymous, at 9:17 p.m.  

  • Good Comments.


    By Blogger Tomm, at 11:52 p.m.  

  • Comments from Don Drummond who used to work in Paul Martin's Finance Department:

    Don Drummond, now chief economist at the TD Bank, also said the plan is "bizarre" because it will do more to help students from high-income families than those from low-income families access a post-secondary education.

    "Obviously tax deductions are more valuable the higher your taxes are," Mr. Drummond said in an interview Friday, adding that RESPs already tend to benefit upper-income families who can afford to make the contributions.

    "This is not promoting access to university for low-income students," he said.

    "It's probably not that far-fetched a statement to say that on the tax side, our financing of post-secondary eduction is now a transfer away from the less well-off to the better off," he said. "And this just exacerbates it, which is really bizarre."

    Mr. Drummond added that "this is not an education savings plan ... it's a very powerful income-splitting tool."

    By Blogger whyshouldIsellyourwheat, at 3:12 a.m.  

  • "Obviously tax deductions are more valuable the higher your taxes are,"

    Obviously! I think that Wheat misses the point, or chooses to be obtuse.

    This is a Private Member’s bill. It is meant to encourage thrift. Naturally, all progressive governments will heavily fund education. That benefits the lower income citizens.

    The Right should welcome this bill. It provides some balance against dependency on the State. Why would harper oppose this bill?

    By Blogger JimTan, at 1:42 p.m.  

  • If the senate amends the bill and sends it back to the house, then we make it a confidence motion and bring down the government over an Education bill... right after sweeping 4 by-elections. Sounds like a good strategy.

    By Anonymous Anonymous, at 2:12 p.m.  

  • //This is a Private Member’s bill. It is meant to encourage thrift.//

    This bill doesn't encourage thrift anywhere close to fairly or equitably. And it is extremely costly, thus, it is bad policy. Just like cutting the GST, instead of income taxes was extremely costly, and bad policy.

    String enough bad policies together, and pretty soon the country will be headed down the wrong path.

    By Blogger whyshouldIsellyourwheat, at 2:14 p.m.  

  • "This bill doesn't encourage thrift anywhere close to fairly or equitably. And it is extremely costly, thus, it is bad policy."

    That's debatable.

    The point is that harper's government has passed the GST cut and allowed the Private bill to pass.

    You should get onto harper and ask him what's up. Don't blame the opposition.

    By Blogger JimTan, at 2:57 p.m.  

  • There is no possible interpretation of an Act which reduces taxation not being a Money Bill. If the Bill were to declare a change to the rate of taxation, nobody would question that fact. That it affects a tax credit makes no real difference.

    For this Act to become law without the approval of the Government and against the advice of the Prime Minister is explicit non-confidence in that Government.

    But the Speaker erred in allowing the Bill to proceed, as Money Bills can only be introduced by the Government in Westminster Democracies (and amendments introduced by the opposition).

    If the Liberals wanted to enact this, they would have voted non-confidence in the Budget just a few days ago (with this as an amendment).

    As it is, they're saying one thing then doing the exact opposite.

    By Blogger Paul, at 3:53 p.m.  

  • I don't know what's sadder.

    On the one hand we have a Conservative Government that is so asleep at the switch that they let a priavte member's bill get past third reading and are now reduced to begging a Senate they claim is dysfunctional do the job they were too stupid to do themselves.

    On the other hand we have an official "opposition" that is crowing about an education savings plan that will mostly help the well-off and - more importantly - is certain to die because the Conservatives have already said they plan to kill it in an amended Budget bill which the Liberals have already said they'll pass because they're scared of an election because they know they'll lose because they're a collection of backstabbing rats helmed by a charmless accident.

    By Blogger Rudy, at 4:14 p.m.  

  • "... because they're a collection of backstabbing rats helmed by a charmless accident."

    Sheer poetry. Have you tried writing fiction?

    By Blogger JimTan, at 3:23 a.m.  

  • The truth is too interesting.

    ( :

    By Blogger Rudy, at 4:50 p.m.  

  • I'm not surprised that the Liberals would stoop to something so devoid of any merit. First, this is just a massive shift in resources away from working towards upper-income people. Second, this is a horrible way, if not unconstitutional, way to make policy.

    But what I'm most ashamed of is that the NDP was stupid enough to vote for it. It's a sad day when the Conservative Party is the only party standing up for sensible policy.

    By Blogger Simon, at 12:24 a.m.  

  • What a tragedy for the fans of stephan harper? Their icon, PMSH, has feet of clay. He’s going to be investigated like Brian Mulroney. Blow after blow!

    Trying to buy Quebec, NAFTA-gate, the Private Member’s Bill, the GST cut, the Paille report, the casualties in Afghanistan, the loss of management in Afghanistan, the torture to Afghan prisoners, etc etc.

    How do they stand it?

    By Blogger JimTan, at 2:16 a.m.  

  • P.S. Not to mention the Liberal hypocrisy of letting the budget go through and then changing it by surreptitious means. I hate Liberals.

    By Blogger Simon, at 9:22 a.m.  

  • "I hate Liberals."

    Why? Chretien/Martin erased the Mulroney deficit and brought Canada to the present state of prosperity.

    You don't like prosperity?

    Chretien kept us out of Iraq despite immense pressure.

    We don't have blood on our hands. Be grateful for the big things.

    By Blogger JimTan, at 12:00 p.m.  

  • To all ther bright lights who think McTeague's RESP Bill benefits the rich, ask yourself a simple question - If the Bill is modelled on the RRSP regime, is that too for the rich ?

    The Don Drummonds of the world argue the current top up RESP regime,using after tax income benefits the wealthy and doesnt. He's as confused as those who those the Bill was procedurally incorrect. Read the former Procedural Clerk of the House of Commons'take from this week's Hill Times."McTeague's Private Memeber's Bill is constitutional and procedurally correct, says former house procedure clerk B.Thomas Hall.........Kudos to McTeague for presenting a private member's bill that is designed to help the middle class save for their children's education .....

    Safe to say that with 56% support in the latest Ipsos Reid survey, McTeague's proposal is exactly 25% above his own Party support.

    None of this is surprising given McTeague has passed more PMB's into law than any MP and redefined Foreign Affairs to help Canadians Abroad.

    Not Bad for a guy Calgary Grit says is not known for ideas.

    How well do you know the Liberal Party ?

    By Anonymous Anonymous, at 12:46 p.m.  

  • Quite worthwhile information, thanks so much for the post.

    By Anonymous, at 2:29 a.m.  

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