Ted Talks: Fiscal Responsibility
In the past two weeks, Provencher MP Ted Falk has used his weekly newspaper column to talk about economic stability. In both columns, he points to the economic crisis in Greece as an example of unfettered spending leading to economic disaster, while pointing to the Conservative economic plan of cutting taxes as the recipe for sound fiscal policy. There are a few things that don’t sit right with me about the columns.
1) This Conservative government can’t say much about unfettered spending: Canada’s national debt has increased significantly under Stephen Harper, who inherited a $13.8 billion dollar surplus and turned it into a $25.9 billion dollar deficit over the past nine years. That’s a $40,000,000,000 swing. It’s easy to point at Greece and say that their government spending is irresponsible, but what do you call a government that increases spending and cuts taxes? This government has cut numerous science and social programs in the name of austerity, while at the same time funneling funds into infrastructure projects in the name of stimulus. Why play both cards at once? It’s hard to tell, but I can see a motive (and I sincerely hope it’s not true): While both infrastructure and social and science programs are important, infrastructure is a very visible way to spread government money around in Conservative ridings and support the Conservative voter base (rural blue collar workers), while social and science programs tend to favour people who don’t vote Conservative (the urban poor, academic elites). I sincerely hope that this isn’t the reason behind the Conservative fiscal policy, but we know that the Conservatives, more than any other party, knows their voter base and knows how to leverage it. Their election strategy is to secure their own voter base and discourage anyone else from voting at all. So while I hope that Conservative fiscal policy is about economic strategy rather than election strategy, it works much better as election strategy.
2) Speaking of election strategy, the Conservatives have been in permanent campaign mode for years now. I was disappointed to see that Ted’s columns comment on what the “opposition parties” think about Greece’s debt situation. Not only were the statements vague on details but clearly negative, they don’t add anything to the column. I appreciate that the MP gets a column to update people in Provencher about what the government is doing and how it interacts on the world stage, but skewering your political opponents does neither of those things. I’ve been similarly disappointed to receive mail from Ted’s office, paid for by taxpayers, which featured half-page photos of Justin Trudeau and Thomas Mulcair with disparaging remarks about both of them. These clearly partisan mailings from the MP’s office can hardly count as good use of government funds. I sincerely doubt that Ted is even aware of them, but this seems to be standard practice for the Conservative government.
3) In regard to cutting taxes, Conservative tax cuts are, again, aimed at specific demographics. In both columns Ted noted that Conservative tax cuts will save “working families” and “the average Canadian” $6,500/year. Personally, I don’t know anyone whose tax return has increased by that amount. It turns out that you’d need to be making more than $80,000/year to get a tax cut that large. I may not be the average Canadian, but I didn’t realize I was only half of one. Canada’s Parliamentary Budget Officer pointed out that only 1 in 6 families would benefit from the Conservative income splitting plan, and that it will cost the government (and therefore taxpayers) $2.2 billion in lost revenues this year.
Let’s be clear about something: we get very good value for our taxes. Our taxes pay for endless amounts of infrastructure and programs that we completely take for granted, but that we could never afford on an individual basis. What needs to change about taxes is not that we pay them, but how we pay them. We currently pay taxes on goods: income, goods, and services; the Green Party proposes that we pay taxes on bads: pollution, waste, risk. That way, rather than getting tax cuts as handouts in election years, Canadians can get tax cuts by improving their efficiency, reducing waste, and making healthier and less risky choices. Programs are supported directly by the problems they address, such as healthcare being paid for by tobacco taxes and garbage collection being paid for by bag tags and dumping fees. We have a tax plan that is fair to all Canadians, favours small businesses over large corporations, will keep us competitive in the G20, and will work with the polluter pays principle to promote greater efficiency and less waste.
The Green Party also has a plan to reduce the public debt without compromising infrastructure. Part of that plan is to reform the tax system, raising corporate taxes to what they were in 2008 before they fell to half of American corporate tax rates, and increase taxes on tobacco and alcohol. Part of the plan to reduce our deficit is to reduce the amount of corporate subsidies we give out (we currently subsidize the oil industry by billions of dollars per year). But the most important part of the plan is our commitment to live within our means and set goals we can actually achieve, which means a real commitment to fiscally conservative budgets rather than spending millions on giving the impression of sound fiscal management through ad campaigns.
The real problem with the Greek financial crisis is short-term thinking. Our financial world is focused on short-term earnings, which are measured in quarters. How can anyone responsibly run an economy three months at a time? All of the arguments about Greece’s payments are similarly short-sighted: even if they can delay or diminish their current payments, what’s the long-term strategy? They’ll have another payment next quarter, or next year. We need to spend less attention and money on short-term financial optics, and more attention and money on long-term strategies to ensure that our economy is both stable and resilient. While the Conservatives are blaming our shrinking economy (when they acknowledge it at all) on volatile oil prices, they continue to push for further investment in oil, while other sectors are moving jobs overseas. A resilient economy is diverse, and a stable economy is one designed with long-term goals in mind, not the next quarter. Any financial manager will tell you that a safe investment is a long-term investment.
We don’t need to point fingers at European countries to find issues with fiscal responsibility. Our current government is responsible for 24% of our accumulated national debt, and spends millions annually just to tell us how good they are with our money. We can do better. The Fall, vote for long-term planning and a sustainable and resilient economy. Vote Green.