Caledon Submission… on National Finance [Tax Credits]

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CaledonInst.org – What’sNew/Abstract
December 12, 2011.    Sherri Torjman and Ken Battle

This paper was submitted to the Standing Senate Committee on National Finance in response to Part 1: Amendments to the Income Tax Act and Related Regulations of Bill C-13 Keeping Canada’s Economy and Jobs Growing Act.  The submission focuses on three main measures in the Bill: the Family Caregiver Tax Credit, Children’s Arts Tax Credit and Gas Tax Fund.

We were pleased to see recognition of caregiver needs in Bill C-13.  But we do not support the design of the new measure, which will deny assistance to lower-income families and provide tax assistance to non-poor families, including the well-off.  Similarly, the Children’s Arts Tax Credit, while important acknowledgement of the value of arts and cultural activities, will do nothing for lower-income families but will help the rest, including the relatively well-off.  We also raise general concerns regarding tax expenditures as a means of financing social needs.

The announcement of a permanent Gas Tax Fund for municipalities is welcome news.  But at $2 billion, it barely scratches the surface of the estimated infrastructure deficit, pegged at $123 billion by the Federation of Canadian Municipalities.  A longer-term solution is required that involves structural changes in the financing arrangements for municipal governments.

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