Taxes and tax cuts
For a politician, the only thing worse than having to use up political points cleaning up someone else’s mess, is cleaning up when the mess was created by tax cuts -- that you originally supported in opposition -- turned out to be a bad idea.
That’s the unenviable prospect faced by Conservative Finance Minister Jim Flaherty when BCE and Telus finally forced the government’s hand on the income trust file.
Suffering from fiscal whiplash? First the Harper government tells us the 2005/06 surplus is $13.2 billion. Then on the same day, it announces large spending cuts.
Doesn't it seem a bit gratuitous to cut spending if Ottawa is flush with cash? For a government focused on getting a majority in the next election, cutting programs popular with potential voters seems a funny way to do it.
But if you take another look at the numbers, you will see why Finance Minister Jim Flaherty must cut spending.
Next week, the 13 premiers and territorial leaders will meet in
St. John's, N.L., with fiscal issues dominating the agenda. It is not going to be pretty.
Studies and background work over the past few months have drawn the fault lines between the provinces with stark clarity. Every provincial and territorial leader knows down to the last dollar which combination of options is of greatest benefit to his province or territory.
OTTAWA – Selon une étude rendue publique aujourd’hui par le Centre canadien de politiques alternatives (CCPA), la concurrence interprovinciale au titre des réductions d’impôt serait le plus important facteur responsable du prétendu déséquilibre fiscal – et non les coupures fédérales dans les paiements de transfert.
OTTAWA—The largest contributor to the so-called fiscal imbalance, is interprovincial tax cut competition—not federal cuts in transfer payments, says a study released today by the Canadian Centre for Policy Alternatives.
The study, by CCPA Research Associate Hugh Mackenzie, shows that federal cuts in transfers to the provinces had little real impact on provincial finances as most of the cuts were simply passed on to local governments.
Most Canadians, if asked, would probably view the issue of the “fiscal imbalance” as a good cure for insomnia. That’s too bad because it is an issue that could fundamentally reshape what it means to be Canadian.The term “fiscal imbalance” is a loaded one, a pejorative used to imply that balance must be restored to Canadian federalism.
OTTAWA—A new study from the Canadian Centre for Policy Alternatives warns that solving the alleged “fiscal imbalance” runs the risk of becoming a downsizing exercise for the federal government.
The study, authored by CCPA Senior Economist Marc Lee, breaks the “fiscal imbalance” code. Different definitions of the term “fiscal imbalance,” in a context of federal-provincial fights over cash and partisan politics, have muddied the waters of the debate.