July 2008 Archives

Quebec Tax Calculators

The Quebec government provides several tax calculators for its citizens to calculate and compare tax savings.

The Disposable Income Calculator allows you to compare your tax savings from 2003 to 2008. Use the calculator to see what your disposable income might be after taxes, taking your family situation into account.

A recent change announced in the 2008 budget was to the refundable tax credit for child-care expenses. Use this calculator to see the net cost of daycare expenses depending on your situation and family

The Calculators can be found at:
http://www.budget.finances.gouv.qc.ca/budget/2008-2009/en/calcul2.asp

So much for spending restraint

The lazy, hazy days of summer are here and Conservative MPs are crisscrossing the country and showering it with money. According to news stories, the federal government has announced some $3-billion in spending priorities since Parliament recessed for the summer less than a month ago. That is roughly $100-million a day or more than $4-million every hour. Weren't the Conservatives elected to root out waste in government and spend tax dollars judiciously?

Conservative partisans will insist these funding announcements were made adhering to all the proper rules and guidelines. Of course, these would be the very same oversight measures they loudly protested in opposition when the then-governing Liberals of Jean Chrétien and Paul Martin spent wildly, hoping to buy votes. Another favourite Conservative talking point is Canadians are getting more value for their tax dollars because Ottawa is better managed today. Taxpayers therefore shouldn't fret over a few billion dollars in spending. But there is little evidence of this improved management. In fact, it is no contest between the Harper government's spending and that of Mr. Chrétien's government. The Grits exercised greater fiscal discipline.

Perhaps this judgment is unfair since Mr. Chrétien governed with a House of Commons majority and Stephen Harper does not. So how does the Prime Minister match up with Mr. Martin, another minority leader? Mr. Martin's fiscal recklessness grew the size of government by 14% over two years. This certainly qualifies him as a big spending Liberal. The Conservatives have controlled the government purse strings since early 2006. After their first two years, Ottawa had grown another 14.8%. This is higher than Mr. Martin's appalling record, making Mr. Harper a bigger spending Conservative.

Many Canadians were encouraged by the Conservative's apparent new direction shown in their third budget that limited spending growth to 3.4% this fiscal year. So much for that. It now appears bribing taxpayers with their own money remains a higher calling for them.

Of the $245-billion Ottawa collects annually in taxes an astounding $26-billion is allocated to grants, contributions and subsidy programs. According to the finance department, the government's total grant/subsidy budget accounts for just over 11 cents of each tax dollar spent. Even if government MPs argue this level of spending is necessary, it is not credible to assert politics does not influence who gets the cash. Canwest News Service discovered many of the recent announcements were targeted to regions where the Conservatives hope to pick up seats to gain a majority. Meanwhile, little money flows to ridings that loyally vote Tory or are reliable Liberal seats. For example, Ottawa confirmed that Quebec-based Bombardier will receive $350-million to build a plane with no confirmed buyers. (According to the Wall Street Journal, air carrier Lufthansa's letter of intent to purchase 60 of the small planes is nonbinding.) Nova Scotia, the lone Maritime battleground province, will receive an additional $867-million in energy royalties. Meanwhile, the Calgary Stampede was handed $432,300 to help Alberta visitors celebrate Quebec City's 400th anniversary.

Fuelling these expenditures is Ottawa's surplus, which comes from the taxes paid by Canadians. Some might believe the high taxes that generate budget surpluses are acceptable so long as lawmakers use those dollars to reduce debt. Yet, Canadians are more likely to witness horses flying than a government capable of exercising restraint while sitting atop a mountain of excess tax revenue. As a surplus increases during a fiscal year so do expenditures because politicians cannot resist spending irresponsibility in an attempt to win votes. Canadians do not yet know the size of this year's surplus, but it is a safe bet that tax receipts are running ahead of the budget's projections.

Unhappily, there is nowhere for voters to turn for reform. Opposition Liberals might decry today's spending levels but these protests cannot be given serious weight. The Liberals in government behave the same.

This summer's spending spree is another reason why taxes need to be cut. It is more evidence governments don't tax to collect the money it needs, instead politicians always find a way to spend revenue that is collected. Cut off the money and government officials will find it necessary to prioritize spending and make decisions about how best to use scarce tax dollars. This would be a laudable project for a government committed to taxpayers.

END

Please note that after six good years with the Canadian Taxpayers Federation, I will be resigning as federal director on Sept. 12, 2008, to undertake graduate studies in economics.

John Williamson
Federal Director
Canadian Taxpayers Federation

Canada Day Brickbats & Laurels

While Canadians celebrated Canada Day on July 1, it was business as usual for government. Taxes were paid, regulations enforced and lawmakers handed out awards. Indeed, the holiday was an unusually active one on public policy issues of concern to the Canadian Taxpayers Federation, which is dedicated to lower taxes, less wasteful spending and government that is accountable to voters.

On Taxes – Brickbat to Higher Energy Taxes

British Columbia taxpayers are paying more for gasoline and most other energy sources as a result of Liberal Premier Gordon Campbell’s introduction of a carbon tax. The levy went into effect on July 1 and gasoline taxes increased by 2.34 cents a litre (the additional tax paid by consumers is actually 2.46 cents/L when the GST tax-on-tax is factored in). Vancouver, which today has the highest taxes on gasoline, saw pump prices jump to over $1.50. The province’s carbon tax will also hit natural gas, propane, diesel and jet fuel. It will rise again on Canada Day over the next four years unless high energy prices and voter furry prompts Premier Campbell to rethink his policy.

Canada’s Official Opposition also wants to saddle consumers with a federal carbon tax if they win the next federal election. Liberal Leader Stéphane Dion’s plan will not add a new tax to pump prices because, the opposition rightly says, gasoline is already heavily taxed by Ottawa. Instead, the Liberal proposal will see taxes on other energy sources – like home heating fuel – rise to the level of taxes applied to gasoline.

On Spending – Laurel to the Department of Indian Affairs

July 1 also saw the introduction of a reform to bring badly-needed accountability to Canada’s native reserves. Indian Affairs Minister Chuck Strahl’s hard-fought proposal to amend departmental funding agreements to include an audit clause went into effect. This change gives Ottawa powers to review how native bands spend tax dollars and is something taxpayers – native and non-native alike – have repeatedly demanded. Ottawa believes adding any audit mechanism will ensure tax dollars are actually spent “for the provision of intended programs and services and that [native reserves] have appropriate management, financial, and administrative controls in place.” Translation: that federal money is spent responsibly and bands account for it. This small, but necessary, spending reform brings the Indian affairs department in line with virtually every other federal department, including health, heritage and the RCMP. It is a long-overdue reform given that every year $10-billion is transferred to native bands across Canada.

On Accountable Government – Brickbats to the Government of Canada & Rideau Hall

Prime Minister Stephen Harper quickly distanced his government from Rideau Hall’s award of the Order of Canada to Dr. Henry Morgentaler this week. Whereas the Governor-General routinely takes advice from elected officials on other matters, Order of Canada appointments are made by an advisory committee without ministerial input. If Canadians are hoping their Prime Minister might have a say on appointments they must look across the pond, to Britain.

Former Prime Minister Jean Chrétien advised the Queen not to grant a life peerage to Conrad Black after the British government recommended him for this honour. Similarly, Canadian Roy Thomson’s peerage was blocked by Lester Pearson. (Both men forfeited their Canadian citizenship to bypass Ottawa’s ruling.) The British honour system includes an advisory committee, but unlike Canada also permits input from the Prime Minister’s office. Canada’s Prime Minister can therefore advise (approve or block) our Queen on the granting of honours to Canadians from London, but he has no influence on honours originating in Ottawa. Only in Canada, you say? Pity, but not surprising.

END

Please note that after six good years with the Canadian Taxpayers Federation, I will be resigning as federal director on Sept. 12, 2008, to undertake graduate studies in economics.

John Williamson
Federal Director
Canadian Taxpayers Federation