Like it or not, higher taxes will clearly be needed
And that’s why Canada’s Conservatives have been taking a note from the U.S. Republicans’ play book, every chance they get, to blast anyone who even hints he or she sees higher taxation as a necessity.
At Ottawa last week, the Harper Conservatives sent out e-mails to their MPs (still at home, thanks to the latest prorogation) and supporters blasting the chief executive officer of TD Bank and reminding them that he once was known as “Red Ed” as a proponent, if not creator, of the Trudeau government’s National Energy Program.
At a conference in Florida, TD Bank CEO Ed Clark said Prime Minister Stephen Harper wasn’t listening to the overwhelming view of Canadian CEOs that tax increases are the best way to reduce his government’s record deficit.
He told the conference that almost every person at a recent meeting of the Canadian Council of Chief Executives said “raise my taxes” to erase it.
The Conservatives’ e-mail, titled “Millionaire Ignatieff Economic Czar Calls for Higher Taxes,” suggested that because Mr. Clark was among senior economic thinkers who met with Michael Ignatieff last May, the Liberal Opposition Leader must secretly share the banker’s view.
“We can be pretty sure that in the coming months he will use the statements from his well-heeled economic advisers to justify his plans for massive new tax hikes on working- and middleclass Canadians,” the e-mail said, adding that since Mr. Clark earned $11 million in 2009, he can afford higher taxes. “Can you?”
Mr. Ignatieff responded that he was “shocked to read that Prime Minister Harper has again attacked a private citizen for expressing views on public policy that are perceived to be at odds with his government’s agenda.” He said the PM should apologize to the senior banker, and described the e-mail as the latest Conservative attack on non-partisan citizens who challenge the government’s direction, citing former deputy finance minister Scott Clark, former Nuclear Safety Commission president Linda Keen, Peter Tinsley, former Military Police Complaints Commission chair, and former RCMP complaints commissioner Paul Kennedy.
But while terming Mr. Harper’s behaviour as “beneath the office he holds,” the Liberal leader was notably silent on the issue of higher taxes.
The debate over whether tax increases are needed to balance the government’s books is shaping up as a central question heading into the March 4 budget, which is likely to include a “road map” and timeline for erasing the deficit without either tax increases or cut in programs deer to voters.
Clearly, with a federal election possible sometime this year and almost inevitable within the next two years, no party is going to have a platform that includes a promise to raise taxes.
And a similar situation is shaping up provincially, with the Progressive Conservatives attacking the McGuinty Liberals as making the planned harmonization of federal and provincial sales tax a massive “tax grab.”
Tax grab it may me, and unpopular it certainly is and will be, but the 13 per cent HST clearly won’t provide enough revenue to pull the Province out of its own record high deficit.
If anything, McGuinty & Co. should be honest enough to admit that even more taxation is necessary, in the form of a rollback of the cuts in provincial income tax rates the Conservatives provided during the regimes of Mike Harris and Ernie Eves.
Although our current federal and provincial deficits are small by comparison with the $1.6 trillion federal deficit currently projected by the Obama administration, governments in Canada as well as the U.S. face a clear need for more revenue, if only to meet the higher health-care costs for an aging population.
In the circumstances, we hope against hope that some politicians, whether Conservative, Liberal, NDP or Green, will start campaigning for truly “responsible” government, by having their party commit to a royal commission with a mandate to recommend program of tax reform that will assure taxpayers not only that we have an end to mounting deficits but the fairest possible means of collecting the revenue needed to provide adequate social services and infrastructure.
Certainly, a lot has changed since the last such exercise, the Royal Commission on Taxation headed by Kenneth Carter, which resulted in imposition of Canada’s Capital Gains Tax back in 1972.
Interestingly, Tom Kent, who was in the Prime Minister’s Office at the time, wrote recently in The Globe and Mail recalling that the Carter commission was appointed by a Conservative government, came up with excellent recommendations, but received only token response by the Trudeau government.
Mr. Kent’s advice: “The time is not yet, but it will come. Taxes will have to be raised. It is not too early to think hard about how.”
We heartily agree. But don’t count on it happening anytime soon.THE











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