Who here agrees with Jim Flaherty?

The sketch: Does Jim Flaherty agree with Jim Flaherty?

by Aaron Wherry

The Finance Minister paused long enough to note that “We don’t have a surplus yet,” then continued with his march into the bright mid-afternoon sun that pours through the west-facing windows above the stairs that lead away from the foyer and the mob.

The unruly called after him.

“Is your government abandoning its promise on income splitting?” bellowed someone.

“Noisy fellow,” the microphones apparently recorded Mr. Flaherty as saying before he disappeared up the second flight (he could not be heard, nor barely seen from the bottom of the stairs, members of the mob not permitted to climb the stairs in pursuit of the duly elected).

Those who didn’t take the immediately available stairs that lead up and out of the House foyer were more easily pursued by the mob. Most had the good sense to keep moving. The overly courteous Joe Oliver, caught by a question about continental energy policy, stopped for awhile and was thus surrounded and made to dance by the jeering crowd.

“We will look at a range of policies next year,” he explained, “and as you know, our government stands for the reduction of taxes.”

But what about income-splitting?

“Well,” the Natural Resources Minister explained. “I think income splitting is clearly one of the important issues that we’ll be discussing going forward.”

Why, someone asked, would no Conservative commit now to what had been committed to three years ago?

“Well,” Mr. Oliver mused, “I think the issue is that individual members of parliament or ministers don’t discuss forthcoming tax changes.”

There ensued a discussion about whether a commitment that has not yet not happened could be described as a broken promise.

All of this you will understand is going exactly to plan. Or something.

An hour earlier, in Question Period, the NDP’s Megan Leslie had had the temerity to suggest that there were differing views among the cabinet as to whether the Conservative government would proceed with its campaign promise to allow for some splitting of incomes among spouses for tax purposes.

Mr. Flaherty, with a smile, stood here to clarify.

“Mr. Speaker, once the budget is balanced, which it is not yet, once we have a surplus, which will be next year, our government is committed to greater tax relief for Canadian families,” he said. “Only Conservatives, as a matter of act, can be trusted to reduce taxes to Canadian families.”

The New Democrats laughed.

Ms. Leslie now turned cruel, reminding the Finance Minister of what he’d said yesterday and wondering if he agreed with himself. “Does the Minister of Finance stand by his criticism that a plan that does not benefit the vast majority of Canadians does not benefit Canada?”

Mr. Flaherty stood here to ignore the question.

“Mr. Speaker, because of our government, Canadians enjoy the lowest taxes that they have had in 50 years. We have done something that Liberals and NDP people do not do anything about. That is, we have reduced government spending,” he explained.

The Conservatives around him applauded.

“We have reduced government spending for three years in a row,” the minister continued. “I know this is a foreign concept to the members opposite, but we have done it without reducing transfers to the provinces for health and education and transfers to individuals, including persons with disabilities.”

This was deemed worthy of a standing ovation.

There is, as yet, no mandatory minimum for changing one’s mind, but there are now various questions that might be asked. Why can’t something be committed to now that was committed to three years ago? How come the Finance Minister can’t say today in Question Period what he said elsewhere yesterday? Does the Prime Minister agree with the Finance Minister? Does the Employment Minister agree with either? Where is the backbench in all this? Is income-splitting good policy or merely good politics or neither or both? What sort of analysis was done before the promise was made? If someone has changed his mind, when did that occur and why? How many voters were expecting that promise to kept? Is there a compromise to be made?

There could be, as Mr. Flaherty might say, a fulsome discussion to be had here. “Stephen Harper explains his thinking on income-splitting” would, at the very least, make for an enlightening (and perhaps rating-boosting) episode of 24 Seven. But then fulsome discussions can be unwieldy. And if we start having one now about this, the masses might start to expect fulsome discussions about other matters.

Of course, the Prime Minister could also announce tomorrow that he’s cutting everyone’s taxes in half (or increasing the child benefit) and all of this could be pleasantly forgotten.

At least until then, everyone gets to have a bit of fun.

“Mr. Speaker, yesterday, the Minister of Finance attacked the Conservative policy on income splitting. He said ‘I’m not sure that overall it benefits our society’ and ‘I think income splitting needs a long, hard analytical look by our think tanks,’ ” Liberal finance critic Scott Brison reviewed midway through QP this afternoon.  ”This analysis has already been done, by the C.D. Howe Institute and the Canadian Centre for Policy Alternatives.”

The Conservatives laughed at this mention of the progressive institute (regardless of whether the Conservatives and the CCPA might soon be joined in official opposition to the idea).

“Now that the analysis by think tanks has actually happened,” Mr. Brison continued, “does the minister agree with these think tanks that income splitting would do nothing for 86% of Canadian families, and that ‘it’s an expensive tax gift for the rich’?”

Mr. Flaherty would not be tricked into a concession.

“Mr. Speaker,” he responded, “when I contemplate thinking about issues, I rarely think of the Liberal Party.”

The Conservatives and New Democrats laughed.

Mr. Brison returned to his feet and responded in kind.

“Mr. Speaker, when I think about balanced budgets, I rarely think of the minister,” he shot back, earning laughs and applause from the Liberal corner.

At least until next year. At which point we might found out how the Conservative government feels about what the Conservative party promised a Conservative government would do.




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Who here agrees with Jim Flaherty?

  1. By changing the health funding formula from an income base to population base the CRAP Minister HAS effectively cut healthcare payments to provinces that have unfortunately suffered a population decline. Weasel words.

    • If they have a population decline, then they have less sick people, no? Or did the sick ones stay behind and only the healthy ones leave?

      • Perhaps the sick people were too sick to move?

        • Perhaps. But I’m not sure how else healthcare dollars should be distributed, other than per capita. There already is an equalization program. Should there be an equalization component built into the health transfer as well, like there used to be? Ontario is already complaining about losing equalization – $641 million this year. I’m glad we’re not losing healthcare transfer dollars too. If the income component were still part of the healthcare transfer, Ontario would have lost even more. (Despite what the media has reported, Ontario has not lost healthcare transfers – it’s the equalization that has been clawed back, and that’s why the net federal transfers have fallen.)

          • That’s the problem with this con government, every dollar that goes out to provinces is tied to the economy, if the economy slows, provinces get less, if the economy goes up, there is a ceiling that kicks in on most transfers, provinces still get less. Health Care dollars are tied to the economy, if the economy slows, that means less healthcare provided(longer waits and lineups) and that means a move down to privatization, and we know what happens then(that’s in harpers hidden agenda). so that allows them(cons) to blow more money on themselves politicking around the country to stay in power, its what they call dictatorship, Putin style..

          • The transfers will be tied to nominal GDP and that hasn’t even started yet. They’re still getting a 6% increase this year and next. The reality is that transfers are ultimately dependent on the economy, and always have been. A sputtering economy forces the government to cut back on transfers sooner or later, which Mulroney did (somewhat) in 1991, and Chretien/Martin did (massively) in 1995. In fact, Harper is the only PM to face a serious downturn without cutting transfers to the provinces. Yet you argue that tying transfers to nominal GDP in an explicit formula, after 12 consecutive years of 6% increases, represents a hidden agenda? Next time try a serious rebuttal.

          • Yes, it’s shocking that we have a federal government that doesn’t reward incompetence. SHOCKING!

          • What? They tossed out Clement?

      • The healthy ones left to find employment, leaving an aging population behind ?

    • Not cut. They declined the rate of increase, their is a difference.

      • In loony progressive-land, any reduction in the rate of growth of a transfer is called “slashing healthcare funding”. A 6% increase in funding being changed to one dependent on nominal GDP after 12 years of annual 6% increases is also “slashing”. Ontario getting reduced equalization according to a pre-determined formula that Ontario was happy to embrace when our economy was in recession a few years ago is also “slashing”. Apparently the equalization formula is only supposed to be applied when it is a benefit, but abandoned as soon as it works the other way.

  2. “The sources say there is new uncertainty about both the political and policy wisdom of the measure.
    Work is being done to see if there is a better option for helping reduce the
    tax burden on families and attract a wider swath of voters. Increasing
    the Universal Child Care Benefit that gives parents $100 per month per
    child under six was one point of speculation.”

    From the link.
    I certainly hope not, since the UCCB is not a non refundable tax credit, if memory serves, and has problems of its own. Namely it has the same problem as income splitting, disproportionately benefiting families with a larger one earner working partner, and penalizing families with two incomes that are of similar size. And if i’m not mistaken single parents complained it could be clawed back altogether because it was non refundable in nature, whereas in the large single earner families the credit is applied to the partner with the smaller income.

    Trust the Tories to go from one bad idea to one that could be even worse.

    • It is neither a refundable nor a non-refundable credit. It is a taxable benefit, that is claimed by the lower income of the two parents. It does not get clawed back, but is counted as income and taxed at your marginal rate, so it “preserves the progressivity of the tax system”, which seems to be the over-riding concern of those opposing joint filing.

      • I knew i’d got some of it wrong[ tax stuff not my bag] but are you saying there’s no similarity between the effects of the UCCB and income splitting? That it doesn’t benefit recipients inequitably?
        And i do recall hearing complaints at the time it was introduces from single parents, that their take of the UCCB was not staying in their wallets come tax time.While well off single earner families got to keep the whole $100 per child under 6. That doesn’t seem a good outcome to me.

        • That’s a common misperception. There was a women’s studies prof who was writing articles for the G & M and elsewhere who made the assertion that the UCCB was only tax free for stay at home parents and therefore discriminated against single working moms, but she was completely wrong. Sadly, her argument got some traction, and was repeated all over the place. It probably still is. If there is a stay at home spouse, theoretically, that person will keep 100% of the UCCB (say $1200) since they remain well below the taxable income threshold. However, the working spouse loses $1200 of their spousal credit. $1200 x 15% = $170 federal tax (plus provincial, which will vary). In other words, even for a stay at home parent with no income, the couple is paying an “effective” tax rate of 15% federal tax and whatever the provincial tax rate is on their UCCB income. A single working parent would likewise pay tax on the UCCB. Where it gets tricky is that the single parent gets to claim a child as “equivalent to spouse”. Now, I don’t know if the $1200 UCCB can be counted as “spousal” income, and therefore subject to the same 15% tax rate, or if it must be declared by the parent, in which case, it could be a disadvantage for a single parent in a higher tax bracket. I’ll need to look that up. If that is the case, it is something they should look at fixing. Ain’t the tax system swell?

  3. It doesn’t know what a ballad budget is he’s had so many it doesn’t know what a good one is do any of them I know what one is one that doesn’t come from a finance minister remind me of Oliver the taxman I’ll tell you who I’m going to vote for none of them

  4. Are you guys seriously going to hound the Conservatives for a year over what may or may not be in their *next* budget?

    • It can only be viewed as a testament to the soundness of this years budget. I find it hilarious that the opposition would spend so much time attacking a policy that may not ever be proposed.

      • May not ever be Proposed?
        It was promised by Harper in the last election campaign.
        But I guess you are correct nobody takes Harpers promises seriously.

    • I blame the media.

      Ha ha ha ha ha

  5. I’ve given it some thought and income splitting won’t benefit me so I’m voting NDP in 2015

    The woman and I just don’t make that kind of money.

    • This comment was deleted.

      • Racketball court?

      • Sounds like an inapppropriate personal attack to me !
        You, sir, should be banned from the forum ?!

        • The guy had used his name in that comment before changing it to ‘guest’. It’s been going on for awhile.

  6. Freezing Kenney out of this major policy shift seems like the big story we’re not hearing much about.
    I guess the social conservative/ fundamentalists want to make it easier to fulfill God’s will and have women stay at home at look after their kids. So, they like the splitting policy.
    The blindsided Kenney comes out and says “stick with the platform”, while Harper and Flaherty have a back room deal?
    A lot of Conservatives must think he was betrayed and made to look the fool.

    • it’s nor God’s will to have stay at home moms, but Mother Nature’s:
      The father is the provider, and the mother is the nurturer,

      • So, lions are doing it wrong?

        • Beauty!

        • If only I could upclick you 20 times…

  7. To show how dirty and deceptive Flaherty is…..

    Take the dollar drop from par, 90 cent loonie is (1.00/0.90) 11% inflation. But worse, it means customs tariffs, the hidden taxes we pay, went from $40+ billion to $45+ billion as its valued in devalued CAD….a sly inflation tax increase.

    Like it or not, when Flaherty/Ottawa and provinces go for borrowing money, BoC/Ottawa creates it out of thin air….devaluing money so you even pay not only more in hidden tariffs and taxes, you pay more for homes and GST/HST……

    Gotta love Flaherty playing the slight of hand.

  8. Pingback: Jim Flaherty's statement on his resignation as finance minister

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