Saturday, November 29, 2014

Conservative Tax Policies are More Regressive and Less Accountable


Our federal government is addicted to tax expenditures—and the shell games that can be played  with them.  By “tax expenditures” economists mean government spending through the tax code. Some of the biggest and most popular examples of tax expenditures include RRSP deductions (currently about $33 billion/year), Pension Income Splitting ($10.8 billion); charitable donations ($8.5 billion) and Child Care Expense Deductions  or CCED ($4.1 billion).  Clearly, they have a role to play in a balanced system of taxation.   But in Canada, tax expenditures take almost as much out of the revenue pie as taxes do: in 2010, they cost $172 billion compared to $191.5 billion taken in tax revenue.
Spending through the tax system has a number of advantages, but they are mostly political. Since tax expenditures are regarded as “off budget” they are often seen as free benefits, especially to those who are best situated to take advantage of them.  At election time, it can seem like the government is giving something without taking anything.  That, of course, is highly misleading. What the government is taking is revenue that could be allocated to public services. Its income-splitting plan, for example, dispenses billions to middle –class families, but it does so at the expense of child care for the young, mental health spending for veterans, and home care for the aged.  For the cost of the government’s Family Tax Proposal, we could raise the CCED from $7,000 to $12,000.  Queen’s Law Professor Kathleen Lahey points out that  Canada is spending $20 billion to subsidize unpaid work in the household—that’s almost twice what an affordable national childcare program would cost.
One wonders whether this government, if it is re-elected, plans health care by tax credit as well. After all, it has been shown that in the United States the subsidization of private health insurance through the tax code made efforts to bring about a universal health care program more difficult (and we all know where our government gets most of its ideas from).  The same process can work in reverse: as Canada’s federal government caps health transfers to the provinces at what it knows is half the rate at which health costs are growing, and provinces are forced to either raise taxes or de-list services, the feds can ease that painful transition with tax credits for private healthcare.
Before we reach that point, two things must be done. First, we should try to replace tax expenditures with proper public programs, especially where basic needs of children and the poor are concerned. Second, where we do choose to keep tax expenditures, they should be integrated with departmental spending and therefore included in departmental reports and estimates.    We cannot expect progressive government from the Conservatives, but greater transparency and accountability is never too much to ask.

Wednesday, October 29, 2014

Laurie Hawn's Round-Up

Fear not this Halloween! Our Edmonton-Centre MP is at work! 

I find it truly remarkable:  in the aftermath of last week’s  tragic  attacks in Montreal and Ottawa,  Edmonton Centre MP Laurie Hawn  issued the statement  that we should “round up” everyone on the government’s watch list:
http://www.edmontonsun.com/2014/10/23/edmonton-mp-laurie-hawn-round-up-everyone-on-the-terror-watch-list .

Laurie’s  talk of “rounding up” people  is not just an unfortunate choice of words, in the light of Canada’s shameful “round-ups”  of Japanese Canadians under the auspices of the War Measures Act in 1942 and  of law-abiding separatists and student radicals during the October crisis in 1970. It is an actual reflection of the Conservative attitude that, in Stephen Harper’s words, “our laws and police powers in the areas of surveillance, detention and arrest ..need to be much strengthened …work which is already underway will be expedited. ” This is not the view of security experts , including the prime minister’s own former legal advisor, Prof. Benjamin Perrin, who stated on CBC radio on October 27  that government already has all of the tools it needs and simply needs to resource and implement them properly. But then, this is not a government that has shown a very high regard, either for expert opinion or for the CBC!

 I do see a need for greater preparedness on the part of uniformed soldiers and a need to beef up security at the Parliament Buildings; I also share  a sense of gratitude that the Sergeant -at-Arms proved to be more than a ceremonial position on this singular occasion.

In related news, I was glad to see that Justin Bourque will be serving an unusually harsh sentence for the premeditated murders of three RCMP officers in Moncton. (Even if  forcing judges to hand down a sentence of 75 years without parole gives him little incentive for rehabilitation.) But I have just one question: why is he not a “terrorist”? Because he is a right-wing survivalist who hates cops ( and not a Muslim),  and acts  alone, he gets treated as just a deranged individual.  But if he is channeling extreme Islamist propaganda instead of extreme American conservatism, and acts alone, like Michael Zehaf-Bibeau, he attracts the terrorist label and is used to justify a more extensive surveillance state and increased police powers.  It makes you think….

Wednesday, September 24, 2014

Needed: More Climate Change Honesty


Prime Minister Harper strikes a strong figure on the world stage these days, doesn’t he?  Swift in condemning the barbarity of Isis terrorists and the aggressive unilateralism of Russia; steadfast in defence of Arctic sovereignty; resolute in his uncritical support of  Israel; and determined not to attend the Meeting of Leaders at the U.N. Climate Summit.  But surely there is more to strength than simply a stubborn refusal to change one’s simple tune. Is a more balanced approach to Palestine and a little more genuine leadership on climate issues too much to ask for? From this government, apparently, it is.

The UN Climate Summit is intended to “galvanize and catalyze climate action” in advance of the Paris COP climate talks in 2015 where countries will form binding agreements to address global warming. The 400,000 demonstrators demanding climate action in New York were not rabble-rousers who had nothing better to do. They were concerned citizens responding to the growing emergency of runaway climate change.

Of course, Canada was represented by Environment Minister Leona Aglukkaq, who announced that Canada would bring in the same higher vehicle emissions standards that the United States is bringing in. That has always been the Harper policy: do it if the Americans do it first, and then it won’t run the risk of a high economic cost.  I could find such a policy acceptable, if I didn’t feel that a G-7 country that calls itself an “energy superpower” has a responsibility to do more, and if I didn’t know that the global costs of adapting to climate change will run into many trillions of dollars, and if I didn’t know that there are economic benefits to be had in green power.  This government can, and should, do more.

After the cynical fakery of the Liberals’ non-implementation of the Kyoto Agreement, Mr. Harper replaced it with his own emission target for 2020, which he presented in his 2007 policy statement, “Turning the Corner.” Just like Mr. Chr├ętien, however, Mr. Harper failed to immediately implement the necessary policies. Canadian emissions have declined slightly, but that was because of  the 2008 recession, some decline of heavy industry, Ontario’s reduction of coal-fired power, and climate policies in British Columbia and Quebec. Mr. Harper’s adoption of U.S. vehicle regulations will have only a small effect by 2020.

So the Harper government won’t achieve the 2020 target, even though it still pretends that it will. And it won’t admit that one of the principal reasons that Environment Canada is predicting  that Canadian emissions in 2020 will exceed the target by at least 20 per cent is the government’s own promotion of oilsands development and pipelines in all directions. But then honesty in climate change policy has not been the forte of Canadian governments, whether Liberal or Conservative.

 

Saturday, August 30, 2014

Stephen Harper and the "S" Word


Uh oh. Prime Minister Harper is using the “s” word again. After the retrieval of 15-year-old Tina Fontaine’s body from the Red River in Winnipeg, and the recent discovery of a decapitated body in Kamloops, calls for a National Inquiry into Missing and Murdered Aboriginal Women were renewed. The Prime Minister’s response: no, there should not be an inquiry, because “ we should not view this as a sociological phenomenon. We should view it as a crime.”  He is wrong: we should view it as both a crime and as a sociological phenomenon.


If viewing the 1,181 cases of killed or missing aboriginal women over the past 30 years as a societal or systemic failure and viewing them as crimes were mutually exclusive choices, Harper would have a good point.  But of course they are not mutually exclusive, and therefore he does not have a very good point.  Part of the rationale for a judicial inquiry is that aboriginals have good historical reasons for not trusting the government, but have reason to think that they can get a fair shake from the courts. Of course, this government doesn't want to recognize that.

Another point: If murderers were targeting Conservative politicians in wildly disproportionate numbers, would those politicians  be satisfied by the police saying that those crimes are being solved at the same rate as other murders?


British Columbians who have wondered about the slowness with which authorities responded to the disappearance of women on Vancouver’s East Side were not completely satisfied by the conviction of the man who killed them.  What weaknesses and biases within the justice system caused these disappearances to happen for so long?  The string of fatalities along Highway 16 between Prince George and Prince Rupert—the “Highway of Tears” – also raises a number of questions: what factors place women at highest risk?  Are most victims prostitutes or drug addicts  engaged in high-risk occupations, or are they simply vulnerable and targeted because they are poor and female and aboriginal?  Is the dismal state of education on reserves to blame? Tina Fontaine liked math and science and was popular at school, but became emotionally troubled after her father died and was placed in foster care..  Loretta Saunders, an Inuit university student killed in Halifax in February, was working on a thesis about missing and murdered aboriginal women at the time she was killed.  

It is not just important to find out who dunnit and punish them – it is important to identify the risk factors for native women and take steps toward prevention that will hopefully stop the steady trickle of targeted killings that take place across this country at a rate of at least three per month. 

If the Native Women’s Association of Canada gathers 23,000 signatures calling for a national inquiry, do they deserve to be ignored?    A formal judicial inquiry would have badly-needed legitimacy in the eyes of both natives and non-natives alike.  It could be used to guide schools and social workers and policy makers about causes, risk factors, and prevention.  It could also be used to raise public awareness and support for education and drug treatment and economic opportunity for First Nations people.  Surely, it is time that this government showed native women more respect, swallowed its pride, and committed some sociology.

Sunday, August 10, 2014

Robert Asselin's rather thin Canada 2020 paper on democratic reform

Robert Asselin is a reputable enough University of Ottawa political scientist, but his paper "An Agenda for Democratic Reform in Canada, " which  proposes mandatory voting and a majoritarian  Alternative Voting system (single member constituency plus preferential ballot) as the principal cures for what ails Canadian democracy, is not adequately defended.  Not discussed is the fact that diffuse interests would continue to be radically underrepresented and the exacerbation of regionalism would continue under AV.  Indeed, proportional representation is not even mentioned in the paper itself, and is given only two sentences in his video presentation,  in which PR is mentioned only to be dismissed as contributing to "instability"--without addressing Alan Cairn's discussion of the instability of the existing system, or the remarkable stability of Mixed-Member systems in Germany and New Zealand.

The track record of the AV system in Canada is that parties have adopted it either to prevent another party from coming to power (the Liberal-Conservative coalition adopted it in BC in 1952 to prevent the CCF from gaining power; Social Credit used it in rural Alberta where it was conducive to Socreds winning seats) or as a proposed cure for votes that are split (Thomas Flanagan advocated it when the conservative vote was split between PCs and Reform in the 1990s). But when the system starts to erode support for the party in power (because it affords the voter an easy alternative to the government to vote for) the system is abandoned.  Prediction: if a future Liberal government adopts this system it will be under increasing pressure to drop it after its first term in office.  Asselin does not address the historical track record of AV systems in Canada, and in particular its marked lack of durability.

More free votes in the House of Commons, consultation about Senate appointments, and a Prime Minister's Question Period at least once per week are all decent ideas that Asselin recommends and have been standard agenda items for years (PM's QP is the practice in the United Kingdom).  But the one thing that could make AV in the House of Commons acceptable to underrepresented minorities--pure PR in an elected Senate--is not discussed. Why not? If instability of the Government is an issue, why not have PR in a separate House, which is not the seat of government and therefore not a House of confidence?

Mandatory voting has much to commend it, but comparative political science suggests that PR would boost voter turnout by about 7% voluntarily because more voters feel that their votes count under PR.  Does mandatory voting cure the problem of political apathy, or does it just mask it?

Asselin's unexplained adoption of the Liberal nomenclature  instead of using the well-established categories of empirical political science ("Preferential Vote" is ambiguous, since both AV and STV  have preferential ballots), and the bold red type of the paper, have the look and feel of an in-house Liberal  partisan publication.  Most of these proposals are aimed against more radical reforms that would prevent a majority Liberal Government /Trudeau Restoration. This no doubt is what the Liberal leadership wanted to hear. But is it what we needed to hear?

Monday, July 28, 2014

My Letter to the Financial Post

William Watson is an economist who is right to be chagrined by the presence of only one professional economist on the 16-member Economic Advisory Council ("There’s a lot more to the economy than simply business,"--FP  July 17). He argues that Jack Mintz can't be expected to be the voice of labour and consumers as well as the whole economics profession, and I heartily concur.

 But Watson fails to ask a bigger question: does this government's repeated pattern of policy errors, such as stumbling too quickly into subprime mortgages, income trusts, expansion of foreign workers into services and manufacturing, and deregulation of railways, or moving too slowly on First Nations consultation, environmental regulation,rail safety  and food labelling, all stem from a blinkered,ideological confusion of business interests with good economic policy?   If that is true--or even partially true-- then shouldn't the Economic Advisory Council act as a corrective lens that provides more economic analysis and non-business input into the formative stages of policy-making?

 The government's stubborn refusal to do so amounts to willful blindness, motivated no doubt by an awareness that the nation's top economists are a continuing source of inconvenient truth.

Here is Watson's column, reproduced with permission from the Financial Post:

William Watson: There's a lot more to the economy than simply business


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