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GUEST COLUMN – Learning to embrace economic futility and love taxes

Finance Minister Bill Morneau. (Image: Bill Morneau Facebook)

By DAVID JOHNSON

I ALREADY WROTE about the politicking surrounding the budget speech, Scheer, Wilson-Raybould, SNC Lavalin, desk slamming and filibusters, etc, etc, etc.  You can read that here.

David Johnson.

This column is focused only on the budget document itself, how it succeeds or fails for Canadians.

If you really want to deep dive into the budget, here’s the link to the actual 464-page document, but flicking through that line by line is about as agreeable as putting an office staple into your own forehead … won’t kill ya, but is momentarily damn painful, and eventually mind numbing.

But, fair warning, it’s a budget … you’d rather change someone else’s child’s diaper after he or she got into the cat food.

Listed by Item Label, the spending, direction or intent, my response and Pass or Fail.

Home Ownership Incentive:  First-time buyers increased RRSP withdrawal to use as down payment by $10,000 to a max of $35,000.  As well, the five per cent and 10 per cent CHMC shared mortgage program will drop monthly payments for combined incomes of $120,000 or less. The math means we are talking about property purchases of about $500,000 to $600,000.

Start with the elephant in the attic;
how many millennials do you know have $35K in RRSP’s?  I know none, zero, nada.

The CMHC shared program is an intriguing new idea on its own, as it uses CMHC credit which you pay back, so it doesn’t actually cost taxpayers, but the $120,000 income cap and the $5-600,000 property value cap means few in the Lower Mainland of B.C. or in Toronto will be able to use this.

Up here in Kamloops …or in any other reasonable housing market, and this becomes more doable … but again how many millennials have been able to save up the required down payment to even consider using either of these?

This program is designed to sound good, but is just lingo without substance.  Without increasing the ability to create a down payment it’s pretty pointless.  Add to that, nothing on incentives to build affordable housing to buy in the first place.  All in all … it’s mostly a Fail.

Canada Training Benefit: $250 a year, or $1,000 every four years for retraining, with EI while retraining.  Laid-off oil patch workers will laugh in unison with this one.  Completely useless, given the real costs of proper training. Fail.

Youth ‘On The Job’ Training spaces: Lowering of student loan interest rates and a six-month after-school interest-free grace period. Considering it doesn’t kick in till 2023, that’s just scattered ink. Lower loan rate is helpful, but the grace period is pretty useless on a loan with three or four study years’ worth of student debt.  Fail.

Municipality Local Infrastructure Commitment: doubling to $2.2 billion. Ontario gets almost half of that. Sounds like the elder Trudeau’s middle finger has reached out of the grave pointed at B.C. again. Seems like a pretty good idea, and it may chunk some in for our badly needed Performing Arts Centre or other projects, but these dollars are willfully short on the real need.

The intent here is to end run around provinces that won’t carbon tax up.
Arjun Singh must be rubbing his hands together on this one.  It seems as if municipalities are the biggest single winners in this budget, but even this still gets a partial pass score as it’s just not enough to allow cities and towns to catch up and fix sewer systems … much less get ahead and build new stuff.

(Image: Mel Rothenburger)

High Speed Internet for ALL Canadians:  Great soundbite, but neither the federal government nor any government actually installs cable or builds uplinks. So we have to give ‘incentives’ (nee; cash) to Telus, Bell and whoever to get it done.  When was the last time real hardware improvement expense info was transparently given to a federal government to prove effective use?

Ya … no. Can you say annual CEO bonuses? Fail.

 $1.1 billion to “Lowering Canadians Energy Costs”: via the FCM (Federation Canadian Municipalities) to “increase energy efficiency in residential, commercial and multi-unit buildings”.  A more difficult one to dig into as there are three angles to it, but obviously geared as another end run around provinces who won’t go for carbon tax. I won’t opine on carbon taxes here to save space, just know I’m a bit torn on it.  That said, any time a Fed provides directly to municipalities instead of adding to provincial general revenue, I won’t mind. Partial fail because the amount isn’t much.

Zero emission vehicles: Basically, a $5,000 incentive to buy an electric or hydrogen fuel cell vehicle with a MSRP of $45K or less.  More mention of electric refuel stations throughout the country. There’s also mention of ‘a proposal’ for a full tax write off for business vehicles (electric, fuel cell or plug-in hybrid) for the ‘year they are put in use’.
Nothing for hybrids, so no ‘step to get here from there’ which I thought was the whole pipeline concept; ‘green technologies will be great, but we need oil to get there’ has been the ideology of this government for a long time. This same concept makes sense in my garage as well. Give us a rebate to get a hybrid, we won’t burn as much fuel, won’t pay as much carbon tax and individually making choices that are in the right direction environmentally.  A real lost opportunity with this.

How many electric or fuel cell vehicles do you know of, that are less than $45K? That’s a Fail all on its own.

More electric refuel stations; We hear that one every year, from every government. Auto Fail.

The business vehicle write off; I am blissfully ignorant on this one, as I do not know how these numbers will work for business … but I do know ‘a proposal’ means it’s just an idea.  Fail for it not being a full-on announcement for this taxation year.

National Pharmacare:  Language to create an agency, but no cohesive decision regarding a program. No investment in drug IT, and no details as to how they are going to change drug pricing besides ‘better negotiations’. I get that it’s a massively large task, and many steps are needed to even begin to set up such a program, but again this looks to be election dependant.

Nothing for today. Fail.

$200 million for TRIUMF, UBC’s Cylotron Particle Accelerator: We’re talking medical isotope production here; this is a good thing.  But the cash doesn’t turn on until 2021-22, so it’s an election promise. They need that money now. Fail.

Wildfire Support: Ottawa is providing $211 million over five years to increase resiliency and emergency management First Nations on-reserve, and that’s across the country.

It also funds $48 million over four years starting in 2020-2021 to fund on-reserve infrastructure projects to protect Indigenous communities from climate-related hazards.

This is even an item because wildfire smoke hung over politicians in Vancouver last summer.  Not a dime to increase funds for provinces to fight wildfires.  Was I the only one to notice that B.C. only announced an increase to wildfire budgets … after this fed budget was tabled? Methinks fingers were crossed in B.C., yet left out in the cold.
We are on our own. Woefully underfunded, postdated funding promises. Fail.

First Nations: $739 million over five years to keep up the promise of eliminating all drinking water advisories in First Nation communities; $1.2 billion over three years for Indigenous child welfare services; and $333.7 million over the next three years for Indigenous culture and language restoration.

Budget 2017 (two years ago) already stated an additional $4 billion over 10 years, which was supposed to start in 2018-2019 (now), to build and improve infrastructure in First Nations and Inuit communities. To date we have little transparency regarding if or how this money has begun to be spent.

Let’s be totally clear here — drinking water advisories exist for 134 First Nations water systems – 90 of them in Ontario as of January 2016. That number increases as systems continue to fail. That’s a massive amount of infrastructure, hardware, piping and engineering and installation expertise. We remind ourselves that it’s the Feds running this program.  Do we really believe that it will all be done for less than a billion dollars? And in five short years while hundreds of more water systems continue to fail or have declared advisories?

A lot of First Nations budget proposals seem to hold little in substance, but are heavy in zeros when announced.  Continuous governments seem to announce dollars to fix First Nations issues, yet all of us … including First Nations, never seem to see anything get better.

Gotta call everything with the First Nations label in this budget a Fail.

Not one dollar, proposal, idea or mention of the affordable grocery issue in the very far north.

(Image: Mel Rothenburger)

Seniors:  I will go into more detail with these, as the repercussions are a bit complex, and some of it is reasonably good.

Full GIS exemption increase from $3,500 to $5,000 and a partial exemption of 50 per cent up to $10,000 income beyond the initial full exemption, and it will be extended to self employed.  This adjustment to the claw back will create some more Loonies for seniors to work with, but in the end with rising cost of living, it’s just that … a few Loonies.  With a growing boomer population that has no choice but to continue working, and not just occasional part time, but full time working,this is a pittance. Fail.

Furthermore for seniors is a proposal for individuals to be able to hold ALDAs (advanced life deferred annuities) worth up to 25 per cent of their registered retirement holdings, for a maximum lifetime dollar value of $150,000. The value of the ALDA would not be included in the math the government uses to calculate how much seniors over 71 must withdraw from their registered retirement income funds (RRIF) every year. This would allow Canadians to keep more of their money in their RRIFs for longer. This will likely be welcome news to working seniors, for which RRIF withdrawals add to earnings as taxable income. This is actually a Pass and is the only full pass in this entire article.

It will also help Canadians cordon off a portion of their retirement savings for their later retirement years, which are often the most expensive due to higher healthcare costs. Partial Pass as it doesn’t go deep enough, but it’s a start.

In the end we need massive injection into funding to support our aging population.  Although these sound good now, it’s a pitance to the real needs of the future.  Short-term seniors electioneering involved here.  Ball it up to a pass or fail and we get a resounding Fail without a full pharmacare program, a boost to OAS and Canada Pension improvement.

There’s more small dollar items, programs and proposals but, for brevity, I’ll stop there.

It’s easier to list what’s not actually in the budget:

1 – Zero for actual affordable housing.  Not even big transfers direct to municipalities geared towards affordable, low cost or marginal housing, even when this government seems happy to drop cash on cities to do stuff.

2 – Zero measures to lower personal tax rates for any category.

3 – Zero action on business tax rates. I would add that the oil industry doesn’t need a tax break, but real diversity in other industries and markets needs to be encouraged by a competitive tax break as a response to the U.S. rate drop.

In this budget there is a distinct lack of details regarding a lot of the above. No one can plan, no one can initiate steps to use many budget items.  There’s a lot of ‘proposals’ which are not plans or promises, just ideas.  To be fair, I didn’t mention many other items in the budget.

This particular budget is primarily geared to support millennial and seniors votes, with stuff that sounds good but on a forensic dive into them, it’s pretty thin. Both groups supported the Liberals last time, and the government is running afraid that the voter reform turnaround turned off millennial votes, so they are turning to another huge group … seniors and baby boomers that are, or will soon be, seniors.

In the end this is a ‘just hang on’ budget, that allows the government to dole out pre-election candies before and after the writ is dropped, a morsel at a time.  I for one am tired of this feast-or-famine type of election-based federal funding, designed only to return a government to office. For that reason alone, I could reject this budget as a whole and condemn the Liberals for doing it.

I’m not saying every other government does any better … I’m saying I’m tired of it.

So what do we have:

– A budget that’s thin, political and basically worthless,
– A federal government of Liberals who are saying ‘vote us back in and then, boy oh boy, will we give up good stuff,’
– A Conservative Party leader who acts like a media frenzying sociopathic used car dealer,
– And oddly … an NDP leader who’s actually making odd political sense … even if I still won’t vote for them.

I think I will start paying more attention to B.C. politics … wait … what? Never mind.

Municipal? Anyone really want an overpriced, underused bike path? Sigh.

Arjun?  You rock dude.

Never thought I’d say that … where’s my stapler?

David Johnson is a Kamloops resident, community volunteer and self described maven of all things Canadian.

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About Mel Rothenburger (6803 Articles)
ArmchairMayor.ca is a forum about Kamloops and the world. It has more than one million views. Mel Rothenburger is the former Editor of The Daily News in Kamloops, B.C. (retiring in 2012), and past mayor of Kamloops (1999-2005). At ArmchairMayor.ca he is the publisher, editor, news editor, city editor, reporter, webmaster, and just about anything else you can think of. He is grateful for the contributions of several local columnists. This blog doesn't require a subscription but gratefully accepts donations to help defray costs.

1 Comment on GUEST COLUMN – Learning to embrace economic futility and love taxes

  1. The bike path, aka multi-use path, is good but certainly overpriced and it has problems which for the sake of brevity I will not elaborate at this point. Suffice to say we are not done spending money on it, including overpriced maintenance. I wonder if Arjun is aware…or if he truly cares? The thing is I don’t particularly care for proportional representation. I do care more about consistency of involvement, staying attuned to matters of governance throughout. And despite the drawbacks I enjoy having a platform like Facebook and the Armcahir Mayor site where we can share opinions and ideas, a public place in the palm of one’s hand…despite the drawbacks. And yes, the overpriced path is just a part of a vast network of cyclibility coming hopefully sooner rather than later…that’s why they didn’t drop the income tax to zero as you would’ve wished, DJ.

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