Archive for the ‘Politics’ category

We need to restore the GST

February 2nd, 2010

The public finances of the federal government are in a sorry state of affairs. While the financial crisis originating in the United States is partly to blame, policy choices made by the government are also a major factor. Looking to the future, the federal government will have to confront the deficit and make some important decisions about how to deal with it.

The federal government is expected to run a $54.2 billion deficit in 2009-2010. The Parliamentary Budget Office projects near-term future deficits to be $43.1 (10-11), $27.9 (11-12), $23.2 (12-13), $19.0 (13-14), for a total accumulated deficit over the period of $167.2 billion. This represents a 36% increase on the $463.7 billion net federal debt outstanding at the end of 2008-2009.

Consider the demographic challenge facing Canada over the same period. At the end of the period (2014), the leading edge of the boomer cohort will be in its mid-to-late-sixties. Over the following two decades from 2014-2033, our increasingly aged population will provide the cruel combination of both a smaller income tax base and a higher demand for government services, especially health care.

Statistics Canada, 2007, Canadian Demographics at a Glance, Catalogue number 91-003-XWE.

Statistics Canada, 2007, Canadian Demographics at a Glance, Catalogue number 91-003-XWE.

I suppose it is good news that the PBO's projections take demographics into account. However, its projections only extend to 2014, and the picture doesn't get any brighter thereafter. Once we've cranked up the net debt to $631 billion in 2014, we will not only have to balance the budget but also run significant operating surpluses to pay back the debt to a reasonable level. We will have to do so with a smaller income tax base (see demographics, above), higher demand for many government services, and higher interest payments on the debt.

In light of this rosy scenario, we must consider what to do now to mitigate these looming budgetary problems. Clearly, some combination of revenue increases and expenditure reductions will be necessary to balance the budget and run operating surpluses to offset the debt incurred over the next few years.

The simplest and most effective change we can make immediately would be to restore the GST to its previous level of seven per cent. The Conservative government slashed this tax by 28.5% over two years. The PBO estimates that each percentage point decrease in the GST costs the government $5.4 billion in revenue. Restoring the GST to 7% would provide $10.8 billion in revenue annually, or $52.4 billion over five years. We would still have to deal with a projected $114 billion deficit over the period, but it would be a good start. Considering that the GST cut was poor tax policy to begin with, let's start putting our fiscal house in order -- again! -- by reversing the ill-advised and short-sighted tax cut that the Conservatives brought in.

Update: The GST credit system provides relief to low income Canadians who pay sales taxes.

a few nuts short of a snickers bar

February 6th, 2007

Paul Wells on Garth Turner's defection. Ha!

kinsella v. levant

August 30th, 2006

I wonder how the pending showdown between Warren Kinsella and Ezra Levant will turn out?

coyne on the press gallery

May 27th, 2006

It is the independence of the junkie from his pusher.

learning about the US military, from the ground up

May 5th, 2006

Just finished reading Robert Kaplan's excellent book on the American Empire and its global military operations. In Imperial Grunts: the American Military on the Ground, Kaplan reports on his experiences embedded in various American military units throughout the world: with Marines in Iraq, with an Army Foreign Area Officer in Mongolia, with Special Forces in Afghanistan, the Phillipines and Columbia.

Kaplan approaches his subject -- the American Empire -- through the lens of its front-line troops. Interestingly, with the exception of Afghanistan and Iraq, it is the non-violent roles of the military that are dominant. Students of international development will benefit from reading the book because it examines the civil affairs function of the military through military eyes.

Every reference to the Canadian military -- there are only a few -- is very positive and usually paraphrased or quoted from a soldier.

It's well worth the time.

brison should resign

March 19th, 2006

Kerr doesn't mince words while dissecting Brison's "defence" of his conduct:

Ignorance of any law is no excuse, but Brison's coy BlackBerry winking is especially baffling. As an ex-investment banker, he couldn't possibly be unaware of selective disclosure laws. One can't imagine what prompted him to send such messages. Perhaps the thrill of having a secret was too much for him.

Brison maintains that he didn't know anything. But he's made terrible decisions--the first one, when he sent the e-mail. His subsequent attempts to avoid blame are worse than his initial mistake. And to think I supported this guy for leader of the PC Party of Canada.

Kinsella v. Bourrie, update

February 21st, 2006

That didn't take too long. Bourrie made the right call. Interesting that it took a libel suit to prompt the clarification and apology.

Emerson defection: Canada needs someone who knows what’s going on

February 7th, 2006

There is no shortage of outrage over David Emerson's defection to the Tories. Aaron is one of a few who hold out the possibility that there's more to this move than meets the eye. Perhaps the fact that the current round of WTO negotiations will likely end with the expiration of President Bush's Trade Promotion Authority in 2007 motivated Harper to recruit an intelligent, knowledgeable Minister of International Trade? Harper tapped Chuck Strahl for Agriculture & Agri-Food. He needs just as good or better for International Trade, and he found it.

I don't like how Emerson became a Tory cabinet minister, but there are plenty of reasons to justify it.

observations on the election

January 24th, 2006
  1. Stephen Harper isn't making any friends in Ontario waiting so long to speak. It's 1:00 am EST!
  2. Turnout was pretty good: 64 per cent so far with more polls to report.
  3. The conservatives were shut out of Montreal, Toronto and Vancouver.
  4. Stephen Harper received 41,549 votes -- did anyone else come close to that?
  5. Wow, the conservatives picked up ten seats in Quebec. Cool.
  6. Michael Ignatieff will be foreign affairs critic and the worst nightmare of whichever conservative MP becomes Minister of Foreign Affairs.
  7. Liam McHugh-Russell garnered more than 8,000 votes. Good work Liam.
  8. I hope Andy Mitchell wins in a recount.
  9. Stephen Harper's speech is really good so far (1:33).

War Plan Red

December 31st, 2005

I'm not surprised but I am amused. I give you War Plan Red, the not-so-secret US plan to invade Canada. (hat tip: bourque)