Budget promises will be kept, Flaherty vows
Last Updated Tue, 02 May 2006 04:51:36 EDT
Federal Finance Minister Jim Flaherty will present his government's first budget on Tuesday afternoon in Ottawa – one that is set to cut the GST, as well as taxes for corporations and small business.
As I look forward to this budget I am worried that the government will actually keep its promises, promises that are not (IMHO) based on sound economic theory. THis government promises to scrap a national child-care program that had serious potential to create hundreds of affordable, quality child-care spaces. IN exchange they will pay parents $1200 a year (likely taxable, likely to be clawed back from those on welfare) for each child under 6 and trust that this flow of money will lead to more child-care spaces being developed.
ALso they will cut the GST by 1%, claiming that this will benefit all Canadians equally. BUt of course it won't. Richer Canadians spend more, therefore they save more when a consumption tax is cut. If the government were serious about helping the bottom 25% of Canadian earners they would raise basic tax exemptions, cut tax rates for those earners, and transfer the tax burden on to those who can best afford to pay.
ALso this government has already taken steps (in the name of savng money) to cut spending around the Kyoto accord. And is expected to renege (at least in part) on an agreeement the former government signed with Aboriginal peoples.
Well, we shall see, we shall see.