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For comprehensive budget coverage, the place to go seems to be either The Globe and Mail or The CBC.
But let's look at how we could be spending our money. To do that we have to start with the surplus.
The Liberals say that we should spend the surplus on debt retirement. We need bring the debt to GDP ratio down from 42% to 25% over the next ten years, they say.
But even with conservative economic growth (1% infl., 1% pop. and 2.5% real growth) the debt will shrink to 25% of GDP in just eleven and a half years anyway -- even if we don't pay down a single dime of debt.
Even an extra $40 billion in debt repayment would only reduce the debt ratio by an additional 2%.
Revenue
So let's spend this year's $4 billion surplus on something useful. And let's cancel the approximately $5.5 billion a year in corporate tax cuts that are due to finish fazing in this fiscal year -- bringing corporate tax rates back to year 2000 levels, when the economy was doing just fine. Assume we don't sell off what's left of Petro-Canada ($2 billion) and do raise inheritance taxes by about $1 billion dollars. On the revenue side that gives us:
Source |
Revenue($ |
Surplus |
4.0 |
Corporate Taxes |
5.5 |
Inheritance Taxes |
1.0 |
Petro-Canada |
-2.0 |
Total |
8.5 |
Spending
Now we've got $8.5 billion to spend on pressing concerns. We can also make the existing 'one time only' $2 billion in health care funding permanent without any extra cost in this fiscal year. And all of this could be paid for in addition to the meager proposals made by the Liberals. Broken down by area of spending we could have an additional:
Area |
Cost($ |
Health Care |
4.5 |
Cities |
2.5 |
Education |
1.0 |
Environment |
1.0 |
Foreign Affairs/Military |
1.0 |
Child Care |
0.5 |
Total |
10.5 |
The only areas of direct federal spending above are foreign affairs, military and the environment. Foreign Affairs and the military should have no problem spending an extra billion dollars. The NDP has also put forth several environment proposals where that money could be well spent.
The other areas all involve transfers to the provinces, so federal administration isn't required.
Leveraged with provincial dollars we could offer provinces $4.5 billion for universal pharmacare, $2.5 billion for direct transfers cities, $500 million to get universal child care started and $1.0 billion to freeze tuition. We can put this money on the table immediately, pressuring the provinces to act quickly to agree to spend the money on these priorities -- no clawbacks, no shifting monies to other programs. These amounts wouldn't solve all our problems, but they would put a serious dent them. But there's more.
Tax Reform
We can make our tax system more progressive. Don't raise taxes, don't cut them; just shift the tax burden away from the middle class.
Start by establishing a new tax bracket on incomes above $150,000/year to raise about $4 billion. Then give a $200 tax cut to every Canadian, across the broad -- $400 for two income families and single parents. Simple. Fair. Effective.
For a party like the NDP this kind of idea would be brilliant. It's progressive, but sheds the image of tax hiking socialists who'd spend the middle class into ruin.
'We're gonna stand up for health care, stand up for education, stand up for Kyoto and stand up for cities. We're gonna stand up Canadian values -- and we're gonna give 95% of Canadians a tax cut while we're at it.'
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