If tax cuts are Stephen Harper’s re-election Plan A, he may need a Plan B

Posted on October 3, 2014 in Governance Debates

NationalPost.com – Full Comment
October 3, 2014.   Kelly McParland

Stephen Harper is banking heavily on the expectation that a glittering package of tax cuts will get his government re-elected, countering the sentiment among many Canadians that they’ve had just about enough of his way of doing government.

The Conservative campaign plan appears to rest on two pillars: balancing the budget and using the surplus to buy votes, and hoping Justin Trudeau defeats himself. They may have better luck with the second than the first.

Elements of the Big Buyoff are already being dangled. Mr. Harper indicated Thursday that Ottawa is close enough to eliminating the deficit that it can begin spending again. The first priority will be to keep promises made in previous campaigns, including limited tax-splitting for young families, a doubling of the contribution limit to tax-free savings accounts, and more of the targeted credits Mr. Harper so loves, particularly fitness credits for young and old.

No doubt the Tories have test-marketed these plans, but voter resistance to the government has grown to extent that a few hundred bucks thrown here and there may prove inadequate to the cause. The cuts Mr. Harper have in mind seem more suited to fulfilling ideological agendas than winning back straying Conservatives.

The tax-splitting scheme stands out in this respect. It’s just a guess, but I bet most Canadians don’t realize yet how limited the benefits will be, and how small a population will make gains. Splitting will apply only to families with children under 18, and the benefits will accrue mainly to those with one working spouse, and one who stays at home. That’s not a huge group, and the biggest savings will go to those in which the single earner already has a healthy income, i.e. those already predisposed to vote Conservative. Steely-eyed, grey-haired Mr. Harper doesn’t do well among women voters to begin with, especially not against that pleasant young Justin Trudeau. Many Moms of young kids may be more attracted by the NDP’s pledge of a low-cost national daycare scheme, or whatever juicy family-friendly giveaway the Liberals are busy cooking up.

Tax-free accounts have proven popular since being introduced by former finance minister Jim Flaherty, but doubling the maximum to $10,000 presumes voters have an extra $5,000 a year to take advantage of it. Yes, those with healthy incomes and excess cash will love it, but, again, most probably already vote Tory anyway.

If you’re going to buy votes, it would make sense to spread the bribe as widely as possible. Instead the Conservatives continue to focus on pockets of voters with narrowly-defined offers that may attract the few at the expense of the many. While the Liberals have yet to unveil their platform, their most recent policy conference was rich with ambitious plans for national “strategies” on energy, transportation, mental health, dementia, autism, housing, early childhood development, disabilities, homelessness and every other cause they’ve saved up during nine years of Conservative rule. When Mr. Harper argues Canada can’t even begin to afford any of it, they will happily point to his expenditures on prisons, jet fighters and the war against ISIS as prime areas for savings.

The Conservatives’ best chance for scuppering Liberal dreams may lie elsewhere. As reported by Postmedia Friday, the anticipated return to surplus owes much to the quiet beaverings of Treasury Board President Tony Clement, who has been slicing and dicing the size and abilities of the civil service to the point that grand new national spending programs may be beyond their capability. Meanwhile Employment Minister Jason Kenney – having overseen a complete rebuild of immigration policies – is doing the same for employment programs, shifting emphasis to workplace training and away from flashy government “make-work” schemes. Once Mr. Harper pushes through his tax cuts, there may not be a lot left for a new government to spend.

That’s the point, of course, but it’s hardly the stuff to make disaffected voters rally back to the Tory banner. The Conservatives may still have to rely on Mr. Trudeau to defeat himself. It’s an area of real promise: this week’s dramatics in the House of Commons over the government’s ISIS plans demonstrated once again how poorly Mr. Trudeau compares against NDP leader Thomas Mulcair, lacking both Mr. Mulcair’s skill and substance. He diminishes on exposure; when he gets fired up he tends to look like an angry hall monitor. It’s not much to go on as a re-election plan, but if tax-splitting is the best the Tories can offer, they may not have much alternative.

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Jason Kenney heads to enemy territory and touts plans to wed job creation programs to the private sector

Jason Kenney — one of the Harper cabinet’s truest true believers — went deep into enemy territory on Thursday, speaking to a hundred-odd ‘‘progressives’’ at the Canada 2020 conference.

The conference bills itself as “Canada’s leading, independent, progressive think-tank working to redefine the role of the federal government for a modern Canada.” The conference’s speakers list includes big liberal names like Justin Trudeau and Hillary Clinton.

When Mr. Kenney took the stage and cracked “hello, fellow Conservatives,” there was a knowing round of laughter.
The Employment Minister’s recitation of the Harper government’s job-creation game plan hit the right notes for the assortment of academics, bankers, executives and party loyalists in the room. But the gaggle of Liberal Party advisors huddled in the back of the room must have picked up the undercurrent in the minister’s remarks.

Mr. Kenney was promising to handcuff his government — and, more precisely, any future governments — to a job creation program led by the private sector, not the federal government. It was as direct a challenge to the big-government think tank as you could imagine.

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Harper government to hand voters spring tax cuts aided by shrinking federal deficit

The Harper government is gearing up for a bonanza tax-cut giveaway in its fall fiscal update that would see cheques landing on voters’ doorsteps next spring.

Stephen Harper said Thursday that his government is about to implement major promises from the last election campaign, likely to include income-splitting for families with children and increased annual contributions for tax-free savings accounts to $10,000.

In addition, the Prime Minister revealed the federal government’s deficit in the year ended March 31, 2014, was $5.2-billion – dramatically lower than the $16.6-billion projected in the budget. He said the government expects a small shortfall in 2014-15.

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