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It’s not just about us any more. The next election must defeat the Tories. We owe it to the world.
It is no overstatement to say that in the last month alone, Stephen Harper’s assumption of the powers of a majority-House PM has literally laid waste to the future health of both this country and the planet.
With Mike Harris henchmen Jim Flaherty and John Baird unbelievably still in the political picture and by his side, Harper has afflicted Canada with a full-on common non-sense revolution – all in just 30 days.
On the planetary front, the capper is of course Canada’s new role as apostle of global atmospheric annihilation at the UN’s Climate Change Conference in Bali this week (December 3-14). Baird’s twisted appropriation of the word “sustainability” as in “economic sustainability” is positively Orwellian.
Yes, we need to safeguard Canada’s economic well-being, but the whole point of the global climate change discussion is that our current economic ways are simply not serving that end, even in the near long term.
The global scientific community has made the options very clear. The planet isn’t waiting around for our leaders or for us.
The great irony is that, unlike so many other places in the world, Canada has incredible economic resources in the form of a surprisingly resilient national economy and a federal tax revenue surplus to support an economically benign transformation.
We also have political capital in the form of an environmentally aware and concerned majority of citizens anxious to see our collective resources used to make it happen..
This is why last month’s mini-budget, which gave away about $60 billion in government revenue over the next five years – basically the time frame of our 2012 Kyoto commitment – was actually semi-criminal.
It’s almost as if the Tory approach were deliberately setting the stage for the catastrophic shock syndrome Naomi Klein documents in her book The Shock Doctrine. Please, Mr. Harper, if you doubt the environmentalists or the global scientific consensus, just ask the insurance companies how they see the odds.
What would the discussion in Bali have looked like if Canada had come to the table with just one of those forgone billions to encourage developing countries to get down with a deal?
The mini-budget’s corporate tax cuts amounted to more than $14 billion of the total tax cut package. Not so much, really, when spread over five years. But these dollars are more significant when added to the almost $56.5 billion in forgone government revenue from lowered corporate taxes between 2001 and 2007, as calculated by the Library of Parliament.
Still, taxes aren’t just about revenue. They serve macro social/economic purposes and drive behaviour. At least theoretically, corporate tax cuts promote investment and therefore are seen by some as potentially in sync with the country’s economic challenges. And, true enough, a portion of these dollars most certainly have and will come back to federal coffers through personal income taxes.
For the sake of argument, let’s just concur that earmarking all those dollars for business stim was a reasonable thing to do. I still can’t help crying over the spilt potential for implementing targeted corporate tax incentives that could have sweetened businesses’ enviro behaviours. Think tax cuts for energy reduction retrofitting, toxic emission controls and more. All these would also promote investment and add new jobs, taking us steps closer to our new eco-way.
Ironically, the truly indefensible measure in the mini-budget was the GST cut. No economist – left, right or centre – saw any value in the measure beyond simply reducing the dollars available to the federal government. It was a cynical political ploy to get support from the masses of the underpaid on the basis of utterly mistaken self-interest.
The 1 per cent GST cut to be implemented January 1 will account for $34 billion of the mini-budget’s $60 billion in forgone revenue over the next five years. If you add the first GST cut in July 2006, the total is more than $68 billion. That would have made quite a climate change war chest. All this forgone for a GST cut that is both pro-consumption and regressive because the poorer of us buy fewer big toys than the wealthy.
And by virtue of encouraging spending, it is pro-inflationary.
These are dangerous qualities. With Alberta’s overheated oil boom already raising inflation (and other) fears, the GST cuts risk feeding a downward spiral. Signs of inflation limit the Bank of Canada’s ability to lower lending rates. And that flexibility is needed to rein in the one economic issue that has grabbed everyone’s attention: the big, fat loonie.
Thankfully, the Bank of Canada did decide to lower its benchmark rate by a quarter of a point last week. But the jury is still out on what future needs may arise, particularly as the U.S. will likely continue rate-cutting in the new year to avoid a looming recession.
Fact is, though, Canada has fared remarkably well through the loonie’s ride – without any federal tax tampering, thank you very much.
Even before the Bank of Canada rate cut, currency traders were giving our high dollar relief from those wacky mid-November highs. And the overall new job numbers that came out just last week vastly exceeded the numbers economists had predicted.
Yes, Canada’s export-based businesses are hurting, with manufacturing job losses coming in at 16,400 for the month. Ontario in particular is suffering, according to StatsCan’s November report. But the same report shows across-the-board 2.7 per cent employment growth over the past year, the strongest since 2002.
The way the economy has more or less weathered this major currency storm is almost miraculous. But the situation is extremely precarious. This could be the one chance of many lifetimes – here in Canada and generally on earth. Another 30 days like this are unthinkable. We can’t allow Harper to shut any more precious windows of opportunity. The whole world is counting on us.
