The other thing that came out of yesterday’s mini-budget is that the Liberals will continue to provide Stephen Harper with a mandate to govern. Unless Harper decides to introduce key environment legislation as a confidence issue, which the Liberals have already said they would oppose, it looks like the fall is no longer going to be time for the fall…
NNW’s Election Fever Meter dropped from 80% to 1% over the last few weeks, and it looks like there’s a relative sign of relief for most analysts with respect to a federal election. Likely, any election that will affect Albertans’ lives before Christmas is in the hands of one of the most boring politicians in Alberta’s rich political history (really, I’d rather watch Stephen Harper drone on about the tax act than watch another 18-minute address by Stelmach).
Which is great, because back in August, Robyn and I made plans for this fall that were all up in the air during election speculation. So now my war room (pronounced “home office”) will begin preparing for a Spring election.
31.Oct.07 
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Even before yesterday’s mini-budget announcement, which will be voted on today, I knew that Stephen Harper was not a follower of John Meynard Keynes. So it doesn’t surprise me that the government is not considering saving some money in prosperous times in order to have money during economic downturns. Jim Flaherty announced a $60B tax savings package yesterday, and it has implications for everyone.
Remember how, when the Tories cut the first percent of GST, they also raised the lowest bracket of income tax from 15% to 15.5% (or, more accurately, just undid one of the last actions of Paul Martin’s government that reduced it to 15%)? Well, now they’re undoing that, retroactive to this year.
They’re also raising the minimum deductible amount on taxes, from just under $9,000 to $9,600, retroactive this year. Because your employer has been going on the assumption of the previous amount, it means money back at tax time. (Hmm… in time for a Spring election…)
Of course, there’s also that extra 1% GST cut. Already there’s comments about how this is a good political move even though it’s not the brightest economic move. Granted, it’s at least the completion of a Harper campaign promise, which really can’t be said for last Halloween’s economic announcement.
Speaking of “tax leakage” and “tax fairness”, how will the 5-year reduction in corporate taxes balance with the taxation of Income Trusts beginning in 2011? Trusts will be taxed at 31.5% in 2011, and the government intends to reduce non-trust corporate taxes from 22% to 15% in 2012.
Now, being a fiscal conservative, I’m in favour of a lot of these measures (well, except the GST cut. Cuts in consumption taxes are not what we need - they’re very visible - but cutting income tax and favouring income from consumption taxes helps lower income wage earners, especially in places like Calgary where dual-wage earners face 40% mortgage-to-income ratios already).
That said, I still believe that the government needs to invest some money now for the future. One might call it ‘insurance’. The other thing is, tax reductions for businesses are good, but again, we live in what’s currently an economic upturn. Is a full 7% reduction (a 32% reduction) over 5 years the best option? Could we use some of that 32% to save for the future, and still plan to put business taxes at 15% during an economic recession, to try to encourage production and jobs?
These are just some thoughts.
31.Oct.07 Uncategorized Read more Comments (4)
If you ever get a chance to read Don Martin’s King Ralph, you will likely gain an appreciation for the tactics used in the Klein communication department. You might not agree with them, but you’ll at least have respect for it.
It seems the Stelmach government learned something from Alberta’s monarchy era. Only a select few people really commented on the fact that Stelmach’s Wednesday address was an expensive advertisement - there was very little time taken to rip it apart before Stelamch then introduced the royalty rates. And the rates were aggressive, but still short of what the independent panel proposed. So, instead of people focusing on any negatives from Wednesday’s address, they are attacking the shortfalls of the royalty review implementation.
As they should. $500 Million is not a small chunk of change. But neither is the money that the government forgot to collect previously. And while relatively small compared to royalties, the 18 minute campaign ad was also not free. Then you have to consider what one can attack on the ad itself, where one side would likely attack previous government inaction and lack of a substantial plan, while the defense will be the rhetorical merit of the speech. Essentially, we have a case here of “too many targets”, and it is reminiscent of the Klein era’s press dumps on Fridays.
Over the weekend, I expect Taft will have to decide what to attack, how to attack it, and what sound bytes can be made. The question will be if Alberta voters will care after the weekend. Stelmach may have increased the royalties enough to appease the majority of Albertans with the “step in the right direction” move. So will voters care that he did not make the full recommendations?
I expect that the oil companies will make a big fuss, unilaterally dismantling the whole situation, because people will be tired of hearing big business’ arguments, and will begin to ignore the royalties argument. So the message employed by the opposition will not be effective if they go for the “Ed’s decision was not good” spin, as that too will be used by the oil companies. The opposition’s message must be to “do more for Albertans”. And, of course, that message may be dismantled even by Stelmach’s address, where Stelmach talked a lot about what the government *will do* for Albertans.
What I’m getting at here today is that the Stelmach government probably just employed its first and, likely quite successful, political play. Whether it was intentional, or merely a divine fluke, the days picked for the announcements, the announcements themselves, and the almost-implementing-the-royalty-review-but-not stratagems may have combined to play a nice little gambit with Alberta’s opposition.
The question is, how good is Taft at chess, and can he beat the deep blue?
26.Oct.07 Uncategorized Read more Comments (2)
So, Stelmach’s address to Albertans extra-long Campaign Ad is on.
It’s nice for Stelmach to consider the visually impaired. Every time the camera went off Stelmach and onto pre-recorded sets of video, they played music in the background, only to cut it off almost abruptly when the camera was back on Stelmach. Even though Stelmach continued to talk at the same volume… I can only suspect it’s so the visually impaired knew when Stelmach was on, and when it was other images.
24.Oct.07 Uncategorized Read more Comments (2)
