"We Will Not Raise Taxes" - Kent describes Canada's action

[Dillon]

As the western countries are still struggling with the recession and following the growing unemployment rate and dwindling economy, Canada is planning to be the leading country to narrow its deficit and move forward on the growth track. Last week’s budget presented a 5 year forecast based on three main goals – securing jobs and creating new ones, continuing to perform the action plan and lowering the deficit.

The Hon. Peter Kent mentioned that Canada is facing big challenges but he anticipates that the Canadian economy can be successful under these circumstances. “The plan may face some challenges but we know that our economy will get out of the recession even stronger then any other G8 country and at the same time we will work on lowering the deficit level.” He added that the way to achieve these goals is through cuts in government spending and freezing the salaries of the officials.

He details Canada's action plan here - http://www.shalomlife.com/eng/7879/We_Will_Not_Raise_Taxes/

Very interesting...

Edited March 11, 2010 by Dillon

[Moonbox]

I'm happy if they don't raise taxes, particularly middle-income earners.

[daniel]

There's as much credibility as what Flaherty said in April 2008.

http://www.thestar.com/mobile/News/Canada/article/413170

Flaherty says he'd cut to avoid a deficit

April 10, 2008 04:04:00

Les Whittington

Ottawa Bureau

OTTAWA–Finance Minister Jim Flaherty says the Conservatives will cut government spending if need be to avoid a budget deficit caused by the economic slowdown.

"No deficit – balanced budget," he said outside the Commons.

"We're not raising taxes," Flaherty added when asked how the federal Tories can avoid a budget shortfall if the weakening economy deprives Ottawa of expected tax revenues.

"There are other ways that governments can balance budgets, of course," Flaherty continued. "We can always restrain spending if that becomes necessary."

But he said the "cushion" in the Feb. 26 budget should be "adequate" to keep the books balanced.

The Conservatives have ushered in large hikes in program spending, which is expected to rise to $218 billion next year from $201 billion in 2007. At the same time, Flaherty has brought in cuts to corporate and personal taxes and the GST totalling $60 billion over six years.

As a result, the government's forecast surplus is only $2.3 billion for this year, and $1.3 billion next year.

With the Canadian economy performing worse than expected by the Bank of Canada and most private economic analysts, the lower-than-expected tax revenues could put the government on the edge of the first budget deficit in a decade.

...

http://www.cbc.ca/canada/story/2008/07/25/fedfinance.html

Edited March 13, 2010 by daniel

[Shady]

There's as much credibility as what Flaherty said in April 2008.

When Flaherty made those comments, the full extent of the American recession wasn't known. I'm sure his answer would have been somewhat different had he know that 6 months later, Sec. Paulson was going to breif congressional leaders about an emergency TARP pgrogram or face an economic meltdown.

[Jerry J. Fortin]

When Flaherty made those comments, the full extent of the American recession wasn't known. I'm sure his answer would have been somewhat different had he know that 6 months later, Sec. Paulson was going to breif congressional leaders about an emergency TARP pgrogram or face an economic meltdown.

Jim is just an extension of Steve. Lets not kid ourselves anymore. The policies of the government are the policies of Steve. He wanted the credit for things done well, he also get the responsibility for the things that don't go well.

[Moonbox]

Jim is just an extension of Steve. Lets not kid ourselves anymore. The policies of the government are the policies of Steve. He wanted the credit for things done well, he also get the responsibility for the things that don't go well.

That's just drivel. What's your point?

[ToadBrother]

I'm happy if they don't raise taxes, particularly middle-income earners.

I don't think they're going to have much of a choice. At some point this "trickle down" theory that Flaherty appears to be advocating is not going to deliver the goods. At some point the government is either going to have to massively slash expenditures (like Paul Martin did in the 1990s) or raise taxes. If the minority situation continues, Harper and Flaherty are going to have the tough choice of trying to figure out which they can more easily sell.

Edited March 15, 2010 by ToadBrother

[nicky10013]

That's just drivel. What's your point?

The point is there's no point in blaming Flaherty when it's all Harper to begin with.

Honestly, about Shady's comment "the full extent of the American Recession" wasn't known, that comment is the drivel part of this thread. I remember to this day sitting on a patio in downtown Toronto early in August 2008 before this all started saying with my friends that this is going to get BAD. This was before the stock market collapsed and people were claiming the end of the world was near. It was incredibly easy to see coming all through 2008. The stock market was stagnant, home prices were collapsing, the rate of mortgage defaults was going through the roof. It was only a matter of time before everything started going to hell. It didn't take a genius to say that, due to Canada being an export heavy nation with the US as our biggest customer, that an economic calamity down south would cause serious distress here. Even though the quote was from April 2008, Harper was saying it all the way through the election in November of that year and he's an ECONOMIST! He called a snap election to get it out of the way before the recession actually hit here. He ran on "things are all fine and good and nothing is going to happen." He didn't even a release a platform until a few days before the election.

Edited March 15, 2010 by nicky10013

[Jerry J. Fortin]

That's just drivel. What's your point?

Obviously that Steve is the guy. Up or down, its all him.

[Shady]

I remember to this day sitting on a patio in downtown Toronto early in August 2008 before this all started saying with my friends that this is going to get BAD.

Ok, let's pretend that what you say is true. What do you expect the Canadian government to do about the crashing of the American economy? I'm getting sick and tired of hearing from people who complain about deficit spending, while at the sametime complained last fall when the government wasn't responding quickly enough with billions of dollars we didn't have in so-called economic stimulus. You can't have it both ways. You can't be a deficit hawk one day, and the next champion tens of billions of dollars in deficit spending for so-called stimulus purposes. It's about as dishonest as one can be.

And no, Canada doesn't have to raise taxes or cut spending to balance budgets. As the economy comes back, simply slowing the rate of spending would easily accomplish that goal. Not to mention there won't be any stimulus spending on the books this year, as well as the agfhanistan mission coming to an end during the following year.

[nicky10013]

Ok, let's pretend that what you say is true. What do you expect the Canadian government to do about the crashing of the American economy? I'm getting sick and tired of hearing from people who complain about deficit spending, while at the sametime complained last fall when the government wasn't responding quickly enough with billions of dollars we didn't have in so-called economic stimulus. You can't have it both ways. You can't be a deficit hawk one day, and the next champion tens of billions of dollars in deficit spending for so-called stimulus purposes. It's about as dishonest as one can be.

And no, Canada doesn't have to raise taxes or cut spending to balance budgets. As the economy comes back, simply slowing the rate of spending would easily accomplish that goal. Not to mention there won't be any stimulus spending on the books this year, as well as the agfhanistan mission coming to an end during the following year.

There's not much you can do and this was never about deficit spending or being a deficit hawk because either way, we were in deficit before the recession ever hit Canada. However, Harper lied about it. So don't try and spin this about being a deficit hawk. Throughout the entire election, Harper said all is well, the ship is fine, nothing will happen. He's either a really incompetent economist or a liar. Considering what we've seen from him since then, I'd probably say it's a combination of both.

The last part of your post really is wishing for the best possible economic scenario. Everyone has said that Flaherty's projection is mildly plausible but to even get to that point, everything has to go perfectly. Looking at the state of today's economy not just in Canada but globally, only the mindless would think that would actually happen.

[Shady]

we were in deficit before the recession ever hit Canada.

That's simply not true. The recession in America started in December of 2007. America is our largest trading partner. To say that we didn't feel the sting of recession until a year or so later is wrong and ridiculous.

[nicky10013]

That's simply not true. The recession in America started in December of 2007. America is our largest trading partner. To say that we didn't feel the sting of recession until a year or so later is wrong and ridiculous.

The downward spiral started late in 2007 but the incredible job losses, stock market crashes and negative GDP growth didn't really pick up until towards the end of 2008. Even then, Flaherty said everything was fine in April of 2008, completely contradicting what you said here:

When Flaherty made those comments, the full extent of the American recession wasn't known. I'm sure his answer would have been somewhat different had he know that 6 months later, Sec. Paulson was going to breif congressional leaders about an emergency TARP pgrogram or face an economic meltdown.

Which is it? Even if you meant December 2008 and the 2007 was a typo, Harper and Co. were still denying that we'd feel the effects here which either makes him either a really bad economist or he lied. Probably both.

[daniel]

When Flaherty made those comments, the full extent of the American recession wasn't known....

So what gives Flaherty's rosy predictions now any credibility?

[Shady]

The downward spiral started late in 2007 but the incredible job losses, stock market crashes and negative GDP growth didn't really pick up until towards the end of 2008.

Negative GDP may have not picked up until later on, but the slowing of growth definitely did. When you have slowing of economic growth, you have less tax money coming into the treasury. It's simple math. Also, as you correctly assert, incredibale job losses etc didn't start to take effect later on as well. However, incredible job losses takes place AFTER incredible profit losses. Those profit losses took place earlier, and again, resulted in less revenue flowing into the government. So you're original claim that Canada was in deficit before the recession began is completely false.

Which is it? Even if you meant December 2008 and the 2007 was a typo, Harper and Co. were still denying that we'd feel the effects here which either makes him either a really bad economist or he lied. Probably both.

It wasn't a typo. December of 2007 was when the recession in the US began. And I haven't heard or read anywhere that Harper suggested we wouldn't feel ANY effects of the recession. Any economist knows that when your largest trading partner hits a downturn, you're going to feel it. Perhaps he thought the effects wouldn't be as bad. But again, that was before the entire picture of just how bad the American economy was fully in view. When Paulson met with the leaders of congress, that's when everybody held their breaths, and that's when everybody found out that this wasn't your average recession.

[Shady]

So what gives Flaherty's rosy predictions now any credibility?

I don't necessarily put much weight into Flaherty's predictions. I'm more in a wait and see mode. Especially with Obama in command. One can't really predict how many more ways he's going to scare the hell out of the private sector and stifle economic growth. Plus, his actions have made a drop in America's credit rating a very real posibility. That could impact things greatly, in a negative way. So who knows.

[Topaz]

Three things are eating at the revenues of this country, One, the EI, there's still too many people on it and I'm sure they rather be working, two, this Afghanistan war and the military spending and I don't really think that Canada's is actually leaving in 2011, we will still be there, doing what, who knows. Three-corporate taxes are 4x lower than what you and I pay. This the Tories say will bring jobs to Canada but I just see jobs leaving Canada to Mexico, China or elsewhere. If this tax cut for Canada's business why aren't there more coming here? IF the Tories are going to pay this off in 5 years, then they must going to hold a yard sale on Crown property. The US is suppose be hit again this year with renewed mortgages and its suppose to be worse yet. Canada can't come ahead if we are so depended on the US for trade but I do think we should be careful who we do trade with.

[nicky10013]

Negative GDP may have not picked up until later on, but the slowing of growth definitely did. When you have slowing of economic growth, you have less tax money coming into the treasury. It's simple math. Also, as you correctly assert, incredibale job losses etc didn't start to take effect later on as well. However, incredible job losses takes place AFTER incredible profit losses. Those profit losses took place earlier, and again, resulted in less revenue flowing into the government. So you're original claim that Canada was in deficit before the recession began is completely false.

It wasn't a typo. December of 2007 was when the recession in the US began. And I haven't heard or read anywhere that Harper suggested we wouldn't feel ANY effects of the recession. Any economist knows that when your largest trading partner hits a downturn, you're going to feel it. Perhaps he thought the effects wouldn't be as bad. But again, that was before the entire picture of just how bad the American economy was fully in view. When Paulson met with the leaders of congress, that's when everybody held their breaths, and that's when everybody found out that this wasn't your average recession.

So then you really are completely contradicting yourself. You've agreed with me that everyone really saw this coming, except Stephen Harper and Jim Flaherty to which you've been arguing couldn't have seen it coming.

If you are honestly saying that they said Canada would be in a recession, then you couldn't have been paying attention. Sorry.

[bjre]

More than half of Canadians think government wages should be freeze or government and program spending should be cut.

http://netnewsledger.com/index.php?option=com_content&view=article&id=1685:nanos-budget-unlikely-to-impact-political-situation&catid=38:politics-now&Itemid=89

[bjre]

Toronto police $100K club continues to grow

David Soknacki was reacting to the release of 2009 public sector salary disclosures that list 1,329 Toronto police uniform and civilian employees who last year earned more than $100,000 – a more than 30 per cent increase from the year before.

Salaries and benefits for 5,588 uniform and 2,000 civilian employees represent 90 per cent of the police operating budget, which is closing in on $900 million. Earlier this month, the force was pressed to cut its 2010 operating budget by $4.1 million, which will delay the hiring of new uniform officers.

TTC toll collectors on annual Sunshine List

An annual list of civil servants making more than $100,000 a year shows that more than 500 public transit employees cracked six-figures.

[groupeii]

The recession is over... there have been not only tax increases but removal of programs and tax credits. The government's personal tax revenues have increased. Government spending is still at an all time high. The only taxes that haven't gone up are corporate taxes and GST (which is level), all other taxes have increased. With the introduction of HST in July taxes will increase dramatically on everything from Housing to Gas - and all those ebay purchases from the US just got 13% tax instead of the previous 7%.. hold on that is a 6% GST increase on gas, housing, and my purchases out of province. This isn't an absence of tax increases it is the highest tax increase I've experienced since GST! And this when the recession has ended, and stimulus spending has ended.

Look, guess what, they are liers. Canadians aren't getting less taxes they are getting more and more. And the GST is being waved to dupe the stupid Canadians who think GST represents the totality of taxes.. it ain't. Personal income tax revenues have gone up. And guess what.. in 2008 per capita income decreased, while per capita tax revenues increase, in a year when corporate taxes were decreased. What does this mean - people made less and people paid more.

The government is lying in a wasted way.

Your conservative government is tax and spend in the worse way possible. Whether airline taxes, HST, increases to EI payroll taxes on the way.. the only thing they are reducing taxes to is corporations, and those aren't Canadians, those are largely foreign owned multinational companies. Even Canada's large companies such as brewing have been bought out, the list continues in so many ways, Nortel, the mining sector for steel and nickel, the forestry sector both US and foreign owned, manufacturing foreign owned, the tar sands increasingly foreign owned by the US and China, and others.

Why is it that the Canadian government rejected the calls of the Canadian Executives Council to increase corporate taxes.. that is a pretty big business lobby, and what came of it, lower corporate taxes and 5 billion in corporate savings in Ontario via HST on the backs of working class Canadians and the poor.

The Conservative government's preying on the stupidity of Canadians must end. Canadians deserve better.

This is not an argument on what taxes are good taxes, but it is to dispute the claim that taxes arn't being increased.. they are being increased faster than any government since Brian Mulrooney, and before that it was before 1920.

Your government emboldened has turned into Tax and Spend from a Spend (now that the surplus is gone)

The years of surplus under the liberal government have been turned into reduce, abuse, our pile of loot. Well it is a junky government with lots of trash on it. It has written into Canada's history the legacy of debt increase accumulation in deficits for the next 5 years at least.. and this with more taxes, and more spending with less programs, and less civil servants. Even after the deficits the deficits plus interest for the last 100 years has to be paid.. if you had a credit card with half a trillion dollars on it due, would you keep spending recklessly? That ain't what a smart man would do. Mugging people for more money at gunpoint ain't the answer, and that is what the government is doing by increasing taxes. Canadians shouldn't support robbery at gun point. It isn't civil or the right thing for a government to do, it is what thugs and crooks do.

Reducing the size of government should mean reducing the cost not turning it into a fascist state by accumulating more punitive taxes on all but the business class and redistributing that to businesses and development of private companies... private companies, your tax dollars are funding private companies and the banks!!!! This is what your government is doing... it is absurd.

Edited March 23, 2010 by groupeii

[msj]

[blah blah blah]

Look, guess what, they are liers. Canadians aren't getting less taxes they are getting more and more. And the GST is being waved to dupe the stupid Canadians who think GST represents the totality of taxes.. it ain't. Personal income tax revenues have gone up. And guess what.. in 2008 per capita income decreased, while per capita tax revenues increase, in a year when corporate taxes were decreased. What does this mean - people made less and people paid more.

You have no credibility when you present opinion that is easily refuted with facts.

Personal income taxes are down, April 09 to December 09, as compared to the same period in 2008, by 7.8%.

GST is down by 9.9%.

Yes, corporate taxes are down by 31.1%.

Not surprising given that corporate profitability is just now rebounding and we will see corporate taxes increase in coming quarters appropriately.

Source Source Source

Edited to add:

According to this source wages, salaries, supplementary income is flat (Q408 compared to Q409) while corporations profits before tax is down 14% (Q408 to Q409).

Edited March 23, 2010 by msj