To the Editor:
To satisfy his political ego, Stephen Harper is obsessed with pushing the notion of “income splitting” for wealthier taxpayers. And he’s doing the country a serious disservice.
Mr. Harper made the ill-considered commitment to implement this scheme four years ago, during the 2011 election. It was conditional on having a balanced budget.
The former Finance Minister, the late Jim Flaherty, tried twice to steer the government away from the idea. First, he noted there was no compelling economic necessity to obtain a balanced budget before the 2015 election. Mr. Harper quickly contradicted him and insisted on claiming a balance this year no matter what. The reasons are political, not economic.
Secondly, just after his last budget, Mr. Flaherty warned that income splitting would be expensive and unfair because the vast majority of Canadians could never qualify. He was right. Over the government’s 5-year fiscal planning horizon, Mr. Harper’s scheme will cost more than $10-billion, barely 14 per cent of households will be eligible and among those that are, the biggest gains go to the most wealthy.
But still, since 2011, Mr. Harper has been focused on little else. To concoct the appearance of a balanced budget, and thus meet his income splitting pre-condition, a great deal has been compromised:
* veterans have been seriously short-changed and mistreated;
* public safety and security have been neglected;
* major military equipment has been delayed;
* a gaping 5-year hole has been torn in federal funding for municipal infrastructure;
* important federal assets like community pastures and an historic tree nursery have been dumped;
* job-killing employment insurance payroll taxes have been hiked and then frozen at levels that are $5-billion too high;
* indeed, the net federal tax load was increased four years a row.
Besides victimizing a large number of ordinary Canadians, all these measures have one other characteristic in common with the faulty notion of income splitting – they all do nothing for economic growth.
Growth is Canada’s most compelling economic priority – to lift the middle-class and balance the books. But Stephen Harper has the worst record on economic growth since R.B. Bennett in the Dirty Thirties.
Falling oil prices are now making Canada’s problem even worse. The Conference Board is saying Alberta may actually fall into recession. Saskatchewan is certainly on the cusp of tougher times. Oilpatch jobs, investment plans and export values are all slumping. The Bank of Canada is warning of a serious slowdown. Government revenues will decline. The risk of deficits is looming once again.
And still Mr. Harper goes whistling past the graveyard. He still doesn’t get the need for growth and the federal government’s strategic role in helping to drive it.
To start with, he should take Jim Flaherty’s advice and shelve his discredited income splitting scheme. He should also slash the massive amounts of money he wastes on government advertising and a bloated Cabinet.
Instead, he could make a truly transformational investment in community infrastructure, higher learning and skills, research and innovation, more effective trade and marketing, and smart energy sustainability.
These things drive growth, bolster the middle class and help balance the federal books. Income splitting does not.
Ralph Goodale
Member of Parliament for Wascana
Besides victimizing a large number of ordinary Canadians,all these measures have one other characteristic in common with the faulty notion of income splitting – they all do nothing for economic growth.
