The longer Stephen Harper is Prime Minister... the longer taxes will stay low -

The longer Stephen Harper is Prime Minister… the longer taxes will stay low

Stephen Gordon updates a telling chart


The federal Department of Finance has chosen to mark the publication of Paul Wells’ new book The Longer I’m Prime Minister by updating the data that form the basis of one of the themes of the book (or so I’m given to understand; my copy is on its way). The Fiscal Reference Tables now include the fiscal year 2012-13, and the numbers confirm a trend of a federal government whose revenues and expenditures have reached — and have since been kept at — historic lows:

As I’ve written before, the Conservatives have applied the “starve the beast strategy“: First, cut taxes; second, cut spending in order to match lower revenues; third, obtain a balanced-budget for a smaller government. As the red line in the chart shows, the Harper government was temporarily thrown off this past by the financial crisis, which required emergency stimulus spending. They are, however, back on track.

Before Stephen Harper became prime minister, federal government revenues had stayed above 15 per cent of GDP for at least forty years. They have now remained below that 15 per cent historical threshold for five years in a row, and are expected to stay that low until at least the next election. And as each year passes, Canadians will get more and more used to the idea of a government with taxes lower than Diefenbaker’s.


The longer Stephen Harper is Prime Minister… the longer taxes will stay low

  1. wheres the NDP haters now?????

    • Well Cons would hate the NDP, so why are you asking.

      PS Cons are always ‘on track’….they just never make the station.

    • right behind you chucky . Harper is the absolutely the worse financial manager possible . He hasn’t a clue what he’s doing , he makes me spit

      • It’s overwhelming clear that he knows *exactly* what he’s doing. He’s doing exactly what he said he would.

        • Yes, ‘drown govt in a bathtub’

          Well….except for the Senate. And the F-35s. And oil of course.

        • He hasn’t put any of his Senators in Jail for breaking the law . he hasn’t been tough on crime , he hasn’t balanced the budget he hasn’t been transparent he hasn’t answered questions he broke his solemn promise not to take perks or a government pension . He hasn’t done what he said at all

        • Low taxes are the leading cause of poverty and if this continues we’ll be a third world country with our very first dictator , That’s not the Canadian dream SIR

          • “Low taxes are the leading cause of poverty.” You know you’re stupid, don’t you? There are dozens of things that are “causes” of poverty, but low taxes ain’t one of them. More people are in poverty due to bad choices, lack of initiative, or bad habits than ever ended up poverty stricken due to low taxes. That’s like saying low grocery prices are a leading cause of heart disease.

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          • No, it’s not their fault. But what is to stop people from having children they can’t afford? There are no shortages of birth control methods available to anyone, including not having sex if you are genuinely not in a situation whereby you want to or should be becoming a parent.

          • “You don’t have any thought process a waste of my time .Go back to bed”

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          • Remember this?

            “You don’t have any thought process a waste of my time .Go back to bed”

            Lead by example.

          • Third world country citizen do not pay taxes..there is corrolation between low tax rates and a country level of poverty= unpaved roads, no sewers, no public schools etc…

          • Taxes are a burden on lawful commerce. The net goal of all taxation is to support a framewok under which free and lawful commerce can thrive. That fomentation of expanded and unfettered commerce is the greatest tool by which you eradicate poverty and the attendant human misery that comes with it.
            The problem with many third world countries is not the lack of taxation. There’s plenty of that (Just exactly how DO you think Robert Mugabe got his roughly $40 billion fortune?). Nor is it the lack of commercial ability, although vast swaths of Africa are hamstrung equally by corruption AND western do-gooders who think that any commercial activity will lead to western-style decadence and downfall. What’s really lacking is the framework of the rule of law which allows commerce to gestate, grow, and thrive.
            This is the kind of stuff we learned way back in junior high, you know.

          • Such unmitigated ignorance. Can you point to a single point in time where lowering taxes has resulted in increased poverty in Canada? No, you can’t. But you’ll find countless examples of the opposite having occurred.

          • That depends on whose taxes are being lowered, doesn’t it?

          • The owners of Irving oil have come out against low taxes ,

          • Rick seems to think transfers to the poor and social programmes grow on trees.

          • NO social programs are paid for by Taxes . That my boy is what keeps a country healthy and not some 3rd world hell hole

          • “You don’t have any thought process a waste of my time .Go back to bed”, boy.

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          • You don’t recognize your own trolling?

            That’s sad.

            Your A.D.D. is terminal.

          • This comment was deleted.

          • Can’t take what you spew out?


            ” at least I have an intelligent and well informed comments”?

            Not with lousy English skills like that, you don’t.

          • today poverty is on the rise .In the 1960s when corporate taxes were 50% our unemployment rate was 2.5% . It’s abundantly clear that low tax regions like India and African country’s where low taxes keeps people from being schooled and kept healthy and the circle of poverty grows . There are no examples where low taxes created wealth except for the already wealthy .You know that and can’t offer any thing to prove me wrong

          • High taxes drive up the cost of goods, leaving less money in the pockets of all, including the poor. High taxes erode profits of small businesses especially, leading to lower prospects for economic growth and economic mobility. High taxes erode savings, leading to lower rates of job creation in the small business sector especially. High taxes reduce overall private spending, leading to lower growth in entry level jobs and fewer opportunities for job creation and income growth. Higher taxes always reduces private sector employment, which automatically means greater poverty rates. (Shall we go into the whole “critical mass of public sector employment” whereby an economy reaches a point at which every public sector job created has the same effect of destroying 5 private sector jobs thing, or would that be too much for you to wrap your head around?)
            Now, let’s get into the social justice aspect that you’re angling towards. You are obliquely (i know, it’s a big word, but you can look it up) trying to make the point that a certain amount of my money actually belongs to you. Okay. How much of your money belongs to me, then?

          • NO the poor don’t have any money , I’m afraid that theory is bogus , you can walk around the facts and try to justify lower taxes but it doesn’t ring true . The trickle down effect never worked . Lower taxes have never caused job growth it’s a myth . It’s hard for you to understand because you haven’t the critical thinking that it takes . If we look at the facts of low tax regions your theory fall to pieces . If we look at history of high taxes your theory fall to pieces .Private service can’t do what public service can for two reasons private can’t give the service that is needed and if they could only a few could afford it with a declining scale of clientele. I don’t want your money I want you to pay your fair share , Taxes are for government programs and public needs both of which you use . Since all wealth is from natural resources the ones we allow to harvest those resources are truly indebted to the citizens . It is treasonous on the government part to not get what the market can bare for the resource but when they give business back my tax dollars for a profit based business they have committed theft

          • I’ll bite. What’s my fair share? How much?
            What you fail to grasp is that taxation is a short word for confiscation. You also fail to grasp that what you might propose to do with my own money may be counter to my own best interests. Whose interest should be primary in that case? In that case, if I am obligated to take from what I earn and give more than I think is fair to those who don’t earn do I get a say in how they spend it?
            Do I get to demand that those who are unemployed don’t have the right to spend money on liquor or tobacco? If I choose to buy used hockey equipment for my kids, do I get to demand that those who receive government support don’t even get to enroll their kids in sports, or at the very least buy only used equipment as well? (Show me a minor hockey program and I’ll find you a parent on some form of income support whose kid has the most expensive bag full of equipment on the team.) Do I get to demand that no one on EI or welfare gets to get pregnant while receiving benefits? Hell, show me a tattoo parlor and I’ll show some guy on welfare getting some new ink. Do I get a say in that? If I am obligated to give more than I see fit to the state apparatus, then does fairness not dictate that I should at least have a say in how people are allowed to spend what I am required to “give” to them.
            You say that all wealth is from natural resources. Sure. And how do those resources get to become useful products?
            Titanium and nickle are useless and have zero value when they’re trapped in deep rock. But, if you want to spend a few million bucks, you can definitely mine for them, and reap the rewards, or not. Want to extract oil or natural gas? Then ante up 20 million or so smackeroos for a drilling rig, a few million for drilling rights, put yourself on the hook for another few million in payroll and enough fuel to drill a hole in the dirt (plus the cost of drilling and placing the surface casing, a lease road, rig moving expenses, drill stem, drilling fluids, light towers, water trucks, ad infinitum…) and IF you hit paydirt, you can be on the hook for the several million dollars necessary to somehow get your oil or natural gas to a venue where it can actually be sold. You want to make the argument that someone who takes those kinds of risks should have less say in how much their tax burden should be than you should?
            Sorry, buckwheat, but higher taxes don’t ever result in lower rates of poverty. Higher taxes mostly go to fueling pay and staffing increases for government employees. Poverty will never disappear because people buy liquor or tobacco or tattoos or play bingo when they should be using those resources to move forward in life.

          • OK here it is how much do you consume of social programs provided to you and your family . It’s not confiscation ,it’s consumption costs , Do you really think these things are provided for FREE ? So I’ll ask again how much do you think your consumption is worth ? It’s not your money when you consume , Since all wealth began as a natural resource tell me how much is yours and how much is mine . There is no voluntary payment in any free market , it’s what the market can bear , that son isn’t decided by you either . Yes we decide who gets EI and welfare as much as we gets to decide who has a right to use all these wonderful thing provided to your family . We do that on voting day . You can’t find a private provider and if you could you couldn’t afford the service . Business uses more government programs and services almost for free , If any one that doesn’t pay for their consumption is business . Your small minded ideas of life and the cost of living in a great country is childish. Show me a business that doesn’t think they benefit from doing business in Canada and I’ll show you a ignorant person

          • A free market is solely about voluntary payment. If can choose what I buy, and often choose how much to pay for it. I can buy water for almost free, or I can pay almost the same price as gasoline for it at the store. I can buy organic vegetables at double the price of non-organic, or I can buy the less expensive ones. I can buy lean ground beef instead of steak, or I can regular ground beef for even less than lean. I can buy no-name tomato soup, or Campbell’s. I can buy a new car, or used. A house with a garage, or not. I can exist with basic cable, or HD tv with high speed internet.
            I live in a world of consensual transactions, except where government is concerned. Virtually all transactions with government are non-consensual. If the price of a private sector good is higher than its’ real world market value, no one will purchase it. I can generate $1000 of income for every $100 dollars I spend on gasoline, so it’s in my interest to buy gas even at today’s high prices. But, when 30-40% of the price of gas is tax, that hurts the guy who is trying to save up to start his own business at $25/hr, especially when only a modest portion of that gas tax money gets spent on roads, and he’s just been hit with a $900 bill for damage from a pothole that didn’t get fixed because the money to fix the pothole is going towards the public sector worker’s pension plans.
            As I said, most of my necessities in life are bought on the free market. If I find the price too high, I do without. Unfortunately, if I tell the government I’ll pass up on the services offered, I still have to pay. If I don’t, men with guns will find their way eventually to my house and forcibly deprive me of liberty and property. If that’s consensual, then the Happy Hooker is still a virgin.
            I pay for what I consume. I pay inflated gas taxes in order to fund certain aspects of the social welfare state. I pay 100% of the cost of my water, sewer, and waste hauling and disposal over and above my property taxes. But, I also pay for what I don’t consume. I pay for my own retirement, plus that of one public sector worker. I pay taxes in other provinces where consumers of government services have voted themselves certain luxuries solely on the basis that someone else is picking up the tab (It’s okay to order a steak if your brother-in-law has already offered to pay. It’s exceptionally bad manners to add a lobster tail and a $40 bottle of wine to that same tab.)
            I have the right to price shop every thing that I purchase. Everything. And, anyone who sells me goods has the right to adjust the price in order to entice me to buy. But, in the world of non-consensual transactions with government, that right is expressly taken from me.
            Your toil in the mistaken belief that money comes from, and belongs to, government. That’s because of the nature of our common form of legal tender. Our money is actually a proxy instrument for the value of our labor. I can’t finance a house with cattle, so I can’t be paid in cattle for the work I have done for someone who might own cattle. So, I’m paid in cash, which I then turn into other goods and services, and the money I earn for my work belongs solely to me.

          • Life is a choice and as of now you chose to live in Canada , Canada has all these wonderful things at your disposal and you chose to use them , they also come at a cost . Taxes are the cost we have agreed to for using these wonderful programs and products .In Canada you cannot cherry pick what you want in service or social programs . This isn’t your corner grocer . If you don’t want to pay the cost to live in this wonderful country then you can chose to leave

            Money is a medium that we chose , the natural resources belong to the occupants and natural resources are the base of all wealth .

          • I like how you tried the race card there, buckwheat. Good one! Sorry, that dog don’t hunt. You’re a typical lefty. ‘Bout as bright as a junkyard headlight…

          • Condescend much?

          • Only when necessary, there, girlie.

          • Oh Greendouche, you slay me!

          • All depends who has the lower taxes.

            Lets lower taxes for business/rich:
            -> Net spending does not change in lower class. People at top get paid more and buy luxury items that don’t really impact quality of living of lower class since most aren’t involved in those industries. Either that or the money gets saved. Or it gets spent on foreign waterfront. Or it goes to raising the current real-estate market negatively impacting everyone but the super rich (which Harper has also facilitated by saying, “if you have money come right in”. Protip: This didn’t create jobs either). In the end the only effect we see on normal people is less money left to spend on social welfare.

            Raise taxes for business/rich:
            ->More money for social welfare and the well-being of people who cannot afford what richer people would deem necessities.

            Lets lower taxes for lower class:
            Because of Canada’s tax system lowering or raising taxes shouldn’t impact the lower class because they are sitting near the poverty line and basically get credited back all the taxes they spend anyways.

            Lets lower taxes for middle class:
            People have more money. They spend it more in normal industries and the general market might benefit. If it benefits enough the increase in sales might generate enough in jobs/taxes to bridge the gap and keep social welfare near the same while also reducing unemployment. This one doesn’t get talked about much since Harper promised it on the basis that he balanced the budget. Maybe if he cuts public education altogether we might get there… but then he’d go back on that and insist new jets were a bigger concern.

            In general though the benefits of lower taxes go to the people in higher classes while taking away the pool of income available for social programs.

            But hell don’t accept what logically follows, look into it. Why is the average income lower under Harper? Why is unemployment up if he’s creating so many jobs? Why is it that historically lowered taxes often lead (or for the very skeptical miraculously occur at the same time as) a higher percentage of low income people? Why is the converse also true historically?

            I love how the article trumpets his decreased spending. Yes after his mostly ineffectual 2008 economic relief (that almost entirely benefited the wealthy and put the country in a massive deficit as a whole following a period of surplus), he’s sure decreased his spending. It’s not hard when you’re cutting social welfare left and right. Tell me when he starts spending billions on helping Canada’s people rather than improving the military. Sure makes sense to spend more waging wars in foreign countries than in sending social relief to those countries (which he banned because Harper). Oh but he’s decreasing Afghanistan spending? Yes in relation to the increased amount following him being elected.

            You’re angry at the lower class because you see people abusing the system. I agree stricter regulations should be put in place. Money given should be spent on necessities for the most part. There’s a reason food stamps are a popular system. But how on earth you think there’s a correlation between people buying alcohol on government budget and lower tax rates helping the economy I have no idea. At least that money is going back into a domestic market where regular people work and therefore has job creating potential. Sure it’s not exactly a good use of money, but it’s a hell of a lot better than the money going straight to the top and becoming a higher profit ratio for the execs. More money in the industry doesn’t mean more jobs, or even a rising income in general for middle class, it means a few jobs get paid more. This we’ve also seen time and time again, or don’t you know how pay rates of CEOs compared to average employees have changed over the years.

            Seriously though just look up the numbers. Tell me why they run so counter to what you believe.

          • The flaw in your argument is that you are framing it with perceived victimhood.
            Let’s take the top 2%, and take a long hard look at who they are. The vast majority of the top 2% are owners and managers of small and medium businesses.
            So, let’s say you’re a guy who owns a machine shop with 15 employees. You do $3.5 million a year in gross sales, you have $400K owing on a building worth $750K, and you owe an additional $900K on the machinery that depreciates every year. In spite of all that your business nets $375K/yr before taxes. On top of your $120K salary, you take an additional $72K dividend. That amount puts you into the 1%.
            After giving $90K of that $375K to taxes, and maybe some bonuses, he has a couple hundred thousand left to re-invest in the business. Some of it is a buffer against a downturn some can pay down debt, and some can be part of the expansion plan (i.e more jobs, more bonuses, etc).
            That is the hard reality of the vast, VAST, majority of the top 2% of income earners. Every cent in extra taxation is a job not created or an opportunity not taken.
            Tell me again how extra taxes create jobs and improve buniness bottom lines.

          • Its not so much that I want you to give me your money, its just that I see how good countries like Sweden have it, and I conclude that higher taxes can do a lot of good if they are managed properly.

          • And if you did your homework you would already know that Sweden is experiencing an influx of immigrants who are perfectly content to live off the avails of the state, while at the same time Sweden’s best and brightest are vacating for environs of less vexatious taxation. Every single day in the model socialist states of Scandinavia, the number of tax takers increases, while the number of tax payers dwindles. No matter how you slice it, at some point the pot of gold that is the mythical “well managed social welfare state” runs dry.
            The erroneous assumption is that we who earn have no plans for our money, magnified by the even more erroneous assumption that a handful of federal employees, notably so bright that they coudn’t get hired in the private sector, can miraculously make decisions about the management of the private wealth of millions of Canadians far more effectively than those millions of Canadians can. Again, that mathematical model don’t add up.
            Look, if you put the ten smartest federal employees in a room, you could conduct a hard science experiment that is being contemplated right now. Put those ten in a room, set the thermostat at their collective IQ, wait for the temp to stabilize, and Voila!, you will have created the coldest place in the known universe.
            I’m serious, here. Socialism has failed- completely, utterly, drag down, double digit, no holds barred, dyed in the wool FAILED. That dog not only doesn’t hunt, it don’t even bark, yet Ottawa is chock-a-block full of federal employees hell-bent on imposing even more socialism upon us huddled, unwashed masses for two, and two reasons only. Some see us taxpayers as a mass social experiment. They earnestly believe in the Marxist model, just without the guns and the Gulags. They eat, sleep and shit that stuff, often without knowing they do so simply because they lack the intellectual depth to be that introspective. Again, seriously. The rest, they simply want to live the life of an unfettered capitalist robber baron, enriching themselves on ill-gotten gains, working in monopolistic enterprises unburdened with the laws of the marketplace and the attendant risks inherent within.
            These people? They are evil.

          • “Sweden is experiencing an influx of immigrants who are perfectly content to live off the avails of the state…”

            ” if you put the ten smartest federal employees in a room, you could conduct a hard science experiment…set the thermostat at their collective IQ, wait for the temp to stabilize… you will have created the coldest place in the known universe(!)”

            “They earnestly believe in the Marxist model, just without the guns and the Gulag”

            “They eat, sleep and shit that stuff”

            “They are evil.”

            … Oh boy… I’ve wandered into crazy-town. I’m out of here.

          • I see you’ve mentioned 5 points. Let’s address, shall we?
            A: Sweden- only half of the 1.3 million foreign born Swedes have jobs. In 2011, and additional 68,000 new immigrants arrived in Sweden, while 50,000 employed Swedes left for greener pastures. If only half of those immigrants are employable, that leaves you with a net outflow of wealth and tax generation.
            B: If you made all the federal employees and the federal legislature vanish into thin air, would the taxpayers notice? Would they really care? Compare that to the impact on government if only those who pay taxes were to similarly vanish. Which do you think would have the most profound impact? People too stupid to work the drive-thru get jobs in government.
            C: If you asked a member of a public sector union, or the Liberal Party of Canada, or the NDP to rate Commie China, the Soviets, and the Nazi’s based upon the rate at which they murdered their own citizenry, they all would place the Nazi’s at the top of the list in spite of the fact that the Nazi’s were the bronze medalists in that sweepstakes. The Libs, the Dippers, and a vast swath of the Canadian public service is dedicated to the advancement of socialism, in spite of the 100% batting average at increasing human misery and erasing economic, religious, and political liberty.
            D: Show me that they don’t believe profoundly in that stuff.
            E; Socialist expend a great deal of energy trying to say they aren’t really socialists without actually saying they don’t believe in socialism. The only ideology in human history that has come close to the murderous onslaught of socialism is Islam. (See Wkipedia for that one, essentially how the Muslim onslaught killed 80 million Hindus between 1000 and 1500 AD)
            Purty much fits the textbook def. of evil, I’d say.

          • A. The whole western world is experiencing an economic downturn right now, and in some European OECD countries, immigrants have been hardest hit, since they work in the industries most affected by the downturn: construction, Manufacturing, retail, and financial [1]. With regards to your previous post, Sweden ranked 5th in the 2014 “world happiness report” released by United Nations General Assembly (Iceland, Finland, Norway and Canada also make the top 10), so it doesn’t surprise me that lots of people want to live there. I think you were implying that having good social services just causes people to move there and not contribute. Even if that’s true, that’s an immigration issue, a rules issue, not really a good argument for not having comprehensive services: “Don’t have services because some people will abuse it”.

            B. Of course they would notice, why wouldn’t they? And why wouldn’t they care? And why are you comparing these two hypotheticals? Around 74% of people aged 15 to 64 in Sweden have a paid job[2], they pay income taxes. A small percentage of probably makes so little that they’re given they’re money back in their tax return, but, if 73% of your population just up and leaves, your country’s got problems. Of course I’d care more if 73% of people left as opposed to the 1-5% (didn’t look up the number) of people who work in govt’, what’s your point? And I don’t know where you get this idea that people who work in government are stupid. Government workers are people just like anyone else, people who work for a living. You have a really prejudiced world view.

            C. There was also a lot of killing done by the communist Khmer rouge, and right-wing paramilitary groups in South America. I’m not even going to bother to fact-check the tally of who killed the most people, because its irrelevant. Just because someone identifies themselves as a socialist doesn’t mean they’re Stalin. Just as someone being “right wing” doesn’t make them Hitler.

            “Canadian public service is dedicated to the advancement of socialism, in spite of the 100% batting average at increasing human misery and erasing economic, religious, and political liberty”,

            Canada is one of the best countries in the world to live in! All of that paragraph is just unsubstantiated and paranoid condemnation. I’m starting to think that you’re just messing with me. You can’t possibly believe this stuff?

            D. You know what, I’m tired, and I’m skipping D.

            E. See C.
            I really don’t know what you’re talking about with the “great deal of energy” thing. Myself, I think social democracy makes a lot of sense, but I’ve always been a green party supporter, and they’re further to the right than the NDP. I’d rather discuss actual issues than to just label myself, because lots of different people have different ideas of what a word means.



        • Although he’s certainly gone on (and on) about lower taxes, I’m pretty sure the author is mis-using the term “exactly.” (twice)

        • In this context i take “exactly” to be an endorsement of GFMD’s post – that cuts to programmes to ozone monitoring and climate change science are in fact intentional.

          • I’m not sure that meaning can be linguistically supported. I would be surprised to learn that Harper has ever publicly stated that he is engaged in “starving the beast” rather than merely talking about cutting taxes (and also about making cuts, but IIRC in a very generalized way and not connecting it to a deliberate ploy to weaken public ability to accomplish goals),

            Are there any quotes (from say, the time he became PM) where Harper says “I am going to cut taxes so I can make cuts, then cut taxes again so I can make more cuts”? Because that would be doing exactly what you say you are doing.

          • I don’t know? When i heard him speak in my town he was very quick to correct the cbc reporter who implied Harper was a fan of trickle down economic theory. The guy is very strategic, which is part of what makes him so hard to hit consistently.
            IMHO no one should be given license to persue such a starve the beast small govt agenda without an express mandate from the voters to do so. I know Well’s like to say Harper telegraphs his moves if the opposition would but read the tea leaves, but that is not a an adequate substitute for an open debate. It’s flouting the spirit of democracy, his hero Winne and possibly Maggie would have been appalled at the deviousness of the man.
            It would seem the only way is for a smart opposition party to corner him into such a debate in a public forum. Good luck with that.

        • Knowing exactly what he’s doing doesn’t actually invalidate either the idea that he hasn’t a clue what that is, or that he’s absolutely the worst financial manager possible.

          (And actually, if he’s the worst financial manager possible, than it stands to reason that even if knows exactly what actions he’s taking, he doesn’t have a clue about what those actions will cause)

        • As the train derailments make abundantly clear.

      • You’re absolutely right it’s not a sound strategy for effective management. If the government can propose a decent cut it should make it and be public and demonstrative about it, instead of skulking around and leaving magazines like Macleans to try to find out the details of the mismanagement in their periodic “The Quiet Cuts” column.

        The 90s Liberals made the easy cuts, and quite frankly they weren’t that easy. The new guys have done crazy stuff like stop monitoring the ozone layer above our own skies. They have to be secretive about their cuts because they most likely aren’t good ones, but that would cut into one of their core platitudes, that government is “too big” and needs “pruning.”

        • Stop subsidising business and tax them properly instead of handing out bail outs ,subsidies , tax deferments and low taxes . Low taxes are the leading cause of poverty and the gap between the rich and poor is not sustainable

      • To use your own words, “You don’t have any thought process a waste of my time .Go back to bed”

  2. What happened to the bit where the Tories were headed into deficit BEFORE the stimulus package?
    And who decreed that 15% of GDP or lower was some kind of holy grail?

    • Harper did. Pay attention.

      • Based on a careful reading of the above article and the last link, I can only assume that “Pay attention” was a mis-spelling of “the figures indicate that 15% seems to be the goal of the current government.”

        • Or you could read Paul Wells’ previous book.

          • Yes, clearly any commenter asking where the 15% figure comes from without first thinking to double-checking Right Side Up (unreferenced in the above article or any of its links, incidentally) richly deserves to be told to “Pay attention”.

            Fortuitously, I just bought that book along with the Longer I’m Prime Minister on Tuesday (TLIPM is excellent so far by the way and I encourage everyone to ready it). For the edification of all, when I reach the proper passage in RSU I will return to this thread and reproduce it.

          • Thx for posting that. I was hoping Mr G would come back with some kind of… i don’t know, empirical evidence that 15% was a desirable threshold to be under. Maybe something from some reputable authority like the IMF – other then Harper.

            I haven’t read either of the books[ my bad] Does Harper deign to justify the figure? I’d like to know if there’s some range that economists generally regard as desirable.[ Feel free to take this one Prof Gordon]

          • Was that assigned reading – I don’t see it referenced?

  3. “….the Conservatives have applied the “starve the beast strategy“….”

    Andrew Coyne – March 2013:

    “At a question-and-answer session with Jason Kenney and Maxime Bernier, a woman went to the microphone to ask the two ministers why their government, with the national debt now in excess of $600-billion, was still spending more than any government in our history. (Which is true. Program spending had only once exceeded $6,500 per capita, in constant 2012 dollars, in all the years before the Conservatives came to power. It has averaged nearly $6,900 over the last seven years.)”

  4. This is a great idea for Maclean’s.
    Sponsor a contest for the the best completion of the title of Well’s book:

    The Longer I’m Prime Minister . . . . . .

    How about: “The more sleazy Canadian politics will become”.

    • The Longer I’m Prime Minister . . . . . .the less likely anyone else will ever want to be.

  5. Much remains to be done in the task of eradicating even the faint
    memory that there ever was anything called The Beveridge Report.
    Our leaders are up to that task. The land is strong.

    • Not to worry. One day you might get to read The Harper Report: explaining why we couldn’t afford the BR in the first place; put together courtesy of the Fraser Institute of course.

  6. Actually, real economists loathe Harper’s boutique tax cuts which target votes instead of economic performance or issues like rising income inequality.

    Tammy Schirle, professor of economics from Wilfrid Laurier University, sums up the problem:

    “I would like to see a general reduction in distortionary tax measures that are designed to redistribute resources toward high- and middle-income families. Several boutique tax credits should be eliminated – particularly things like the children’s fitness non-refundable tax credit that effectively gives high-income families a discount on their children’s activities (but not low-income families with a low federal tax payable) and have very high administrative costs for non-profit organizations that need to provide tax receipts.

    “I would also like them to seriously reconsider the introduction of income splitting (the Family Tax Cut), as it will represent a massive tax expenditure that primarily benefits a subset of high-income families (high-income, single-earner families to be more precise). It also raises the marginal tax rate for secondary earners in a family, reducing labour supply incentives where the labour supply elasticity is highest.”

    • Boutique income tax cuts happen and there are good arguments against them, but income splitting, if it occurs, could be the ugliest financial mismanagement of a generation. One is a little pesky, the other is an atom bomb.

    • We have duck season, elk season, moose season, goose season, deer season, (wabbit season?), even bear season. What about economist season? They are certainly less useful than, say, a moose, and far less photogenic…

  7. Neo-cons are trying to bankrupt us back to the 19th century with reprehensible schemes like “starving the beast.” They won’t be happy until our social safety net resembles Chile’s.

    These self-aggrandizing misanthropes will destroy the economy and civilization if we are fool enough to let them.

  8. All I see in that graph is expenditures trending up and revenues trending down while Harper has been PM. It seems like the argument you’re trying to make, Stephen, is more appropriately applied to the Chrétien Liberals.

    • You have to close your eyes and imagine the dotted lines have become real lines. Flaherty tends to specialize in the dotted ones.

  9. The x-axis on your chart is a bit coarse, but it looks to me that spending was at about 12.5% of GDP in 2006 when Harper became PM, and might get there again in 2018?

    Why as a small government advocate am I supposed to be happy about this performance where 15% is a target? That beast ain’t starving. On the contrary, it still looks like it needs a diet.

    • If you want a small govt….get rid of the Senate and the military.

    • The point is about revenues. The blue line.

      • OK fair enough, but I’m assuming we want balanced budgets, do we not?

        • Not necessarily, especially if you’re more interested in excuses to keep cutting taxes and are indifferent to the effectiveness of all aspects of public life.

          • Small government advocates aren’t indifferent to how effective government is. We know it sucks at what it does. That’s why we are small government advocates.

          • SG advocates seem oddly less bothered by large tax credits to otherwise healthy corps and user fees to less economically healthy citizens like myself. Guess the answer is to get myself into a more privileged special interest group eh.
            edit: SG = small government.

          • Huh?

            Why do you hate Canada, kcm2? And why do you strangle kittens?

          • Huh! I presume an intelligent man like yourself grasp the fact that SG in this case represents small govt, not Stephen Gordon.
            Otherwise your post is way too cryptic for this poor boy to grasp immediately. Maybe you or someone else can elaborate, how about you?

          • Ah. Apologies. My mistake.

          • Apologies accepted and fixed. :)

            Short hand can be a bad habit even on blogs.

          • Irving oil agrees with high taxes . Keep taxes low and Canada will be a third world country before Gen Y are grand parents . Low taxes are key to ruining a country

          • Low taxes are wanted by people hating Canada .Why do you Mr. Gordon want lower taxes when your own employer has shown that low taxes HURT Canada ?

            The Harper government ’s commitment to further reduce the general corporate income tax rate while the nation struggles with budgetary deficits has been championed by – surprise! – the corporate sector. But the majority of Canadians, including business owners, and those who work for them, say no to these cuts now.

            Here are five economic reasons not to keep reducing the federal corporate tax rate this year or next.

            Least effective job creation measure

            According to the nation’s official number crunchers, if you want policy to encourage job creation, cutting corporate taxes is the weakest option (20 cents growth from every dollar of tax cut). Spending on infrastructure has the most impact ($1.50 on every dollar spent). Finance shows spending on income supports for the unemployed and low income Canadians has an equally big pop, and housing initiatives are almost as good ($1.40 for every dollar spent).

            Little Impact on investments

            Federal corporate tax rates have fallen from 28 per cent in 2000 to 18 per cent in 2010. Business investment (in non-residential structures and equipment) as a share of GDP was 12.4 per cent in 2000. It was also 12.4 per cent in 2009, and on track for the same in 2010. In the 1960s, the heyday of industrial expansion and economic development in Canada, the federal corporate tax rate was 40 per cent. Statistics Canada’s data on business investment starts in 1981. That year the federal corporate tax rate was 36 per cent, and business investment represented 11.5 per cent of the economy. By 1990 the federal corporate tax had fallen to 28 per cent. Business investment had fallen to 10.8 per cent of the economy. There are many things that drive business investment practices, and while taxes are a consideration they are not the primary factor in investment decisions. The historic evidence shows a commitment to this strategy is a costly faith-based proposition.

            Pay more tax to cut taxes

            Since Fall of 2010, the Harper team has been saying corporate tax cuts “pay for themselves” in closed-door meetings like these. But Budget 2009 figures show reducing the general corporate tax rate from 22.12 per cent in 2007 to 18 per cent by January, 2010, removed $6.7-billion annually from public coffers, right through the worse of the recession. Cutting the rate further this year, to 16.5 per cent meant another $2.8-billion in foregone revenues annually. The Harper team’s commitment to reducing the corporate tax rate to 15 per cent ultimately reduces the size of the public purse by $13.7-billion annually by 2012, according to Finance estimates, at which time the federal budgetary deficit will be between $21- and $26-billion (the range of Finance, PBO and IMF estimates). Financing this tax cut requires borrowing more money. The average Canadian taxpayer will pay interest on the borrowed money to provide a tax break for profitable corporations.

            False economies

            The Harper government viewed infrastructure spending as an extraordinary one-time stimulus measure. The Federation of Canadian Municipalities estimates a $123-billion deficit in backlogged repairs and maintenance to core municipal infrastructure. This includes roads, bridges, water and waste systems, transit and municipal buildings – but not social housing, schools or hospitals. FCM estimates another $115-billion for new builds to meet new demands. Corporations may be getting a break, but they aren’t responsible for public infrastructure. Governments are. We are. It is a false economy to stick the next generation with an unnecessarily high price tag for what should be happening now – rebuilding the foundation for business, family and community needs everywhere, while the cost of borrowing is at historic lows and unemployment is still high.

            The question of working capital

            Finance Minister Jim Flaherty says Canada’s tax rates on new business investment are the lowest in the G7. Erin Weir’s blistering riposte to Jack Mintz shows our corporate tax rates among the lowest in the developed world. Who are we competing with? It’s time for a reality check: Canada’s corporate sector is sitting on a growing pile of capital. In the recessions of the 1980s and 1990s the business sector was a net borrower of cash to cover their costs, as one might expect during lean times. In contrast, during this recession the business sector just kept generating bigger and bigger surpluses. In 2007 the net surplus of the sector was $43-billion. By 2008, it was $57-billion and by 2009, $59-billion. By third quarter 2010, $51-billion was generated in surplus. That’s the surplus in the annual flow. The accumulated stock of ready cash (currency, deposits and short term paper) in the non-financial corporate sector had grown to $489-billion by third quarter 2010. That’s a lot of money. When it finally gets put to work, we are likely to witness a wave of corporate consolidation. But mergers and acquisitions don’t necessarily create jobs in Canada.

            An across-the-board general corporate income tax rate cut rewards companies whether they create jobs or kill them. The primary sector of the Canadian economy is increasingly in the hands of off-shore investors, who take the profits and jobs elsewhere. That’s global capitalism, but we don’t need to reward it. We can target and reward the firms that put their capital to work in Canada, creating jobs and value-added enterprises.

          • Nicely done, but this does not look like your work. Care to give credit to the appropriate source(s)?

          • Harper cut government on things he decided , and grew the ones he preferred. Small goverments are the easiest to control by Dictators and tyrants

          • Actually, you don’t know that.

            You *assume* it sucks at what it does. You find singular areas where it seems to perform at a sub-par level and generalize this to the entire organization. Never mind the fact that every organization has things that you can point out are being done at a sub-par level, and that there is no other organization that attempts to do even half of what people expect the government to do, nor any organization that attempts to satisfy a customer base as disparate as the one government is required to satisfy.

            Private enterprise wouldn’t even touch most of what government does, at least, not without actively screwing over vast portions of the populace to secure their own position and advantage. No, small government advocates aren’t indifferent.. more often than not, they’re willfully blind.

  10. Hmm – looking at that chart I would say we were better off under the last Liberal government. ‘revenues lower than 15% of GDP’ is a made-up arbitrary target. Per the chart, we had lower expenses by the time the Liberals left office and higher revenues. I.e. we had regular yearly SURPLUSES. The Harper government was grateful that we had that 2008 recession because it masked the fact that they were putting us on a course of going into deficit even without a recession. The reason? Pre-mature, irresponsible (near-religious in motivation) over cutting of taxes while keeping spending the same (need to be able to afford those overpriced F-35s after-all!!). Some tax cuts made sense but much of it should have been left alone so that we could continue to pay off our debt,and then actually introduce the novel concept of putting away a couple of hundred billions of dollars to be able to fund needed spending when a recession comes. Instead they messed it up and we are no back to running a deficit. Notice that when the 2001 recession hit Canada STILL was running a surplus because the Liberals were running things and staying the course on their economic policies?
    Q: Whats worse then a ‘tax and spend Liberal”?
    A: a ‘cut taxes and spend MORE Conservative’.

  11. Wow! Look at that. Revenues appear to be at an historic low as well[ at least since the 60s] and projected to stay there, yet expenditures continue to nose dive. Almost like it’s ordained.I wonder if it might do damage to core govt responsibilities, like protecting the environment or monitor or do anything meaningful about CC?
    I guess i’ll have to go elsewhere to get a professional economic opinion on whether that is kosher or not.

  12. Clearly the country is going broke under low taxes and the social programs that made Canada great are being chopped to accommodate the wealthy . That’s a poor way to run a country
    Try that Harper the next job you have and see how long you last

  13. And how long more do you think the provincial governments can stave off massive cuts in health care and education as a result of Harper’s tax cuts? When Canadians get the full impact of these cuts, all hell will break loose and the disintegration of the country could just happen as Ontario decides, rightfully, to keep all tax revenues originating from the province. To hell with the federation and let’s do it alone.

  14. Its simple: the script is that they show a rosy financial picture and dangle the lower taxes carrot for votes while offloading expenses to the provinces who will be forced to increase taxes or run a deficit. eg. Healthcare payments to provinces are being reduced casuing havoc down the road for all Canadians.

    CPC are all about sabotaging our democracy: senate, healthcare, even our defence : they cant buy a new army truck and lets not talk about that F35 boondoggle or their inability to defend Canadians from foreign powers.