Abyss, on 26 April 2011 - 02:06 PM, said:
In the end, i suspect we'll end up with PC narrow minority gov (again), with the opposition almost split up the middle between NDP and Libs and a very small Bloc contingent... more or less 33/30/30/7.
The beauty of it all is that it's not at all clear that a Tory minority will be able to win the confidence of the house and govern in the first place, what with the ruling of contempt and the upcoming reports on Afghan detainees and G8/20 spending.
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As for the NDP... look, you're an apparently educated and informed crowd of Canadians... explain this to me... the NDP's plan appears to amount to increased social spending, funded by increased corporate taxes. Which means corporations will invest less in Canada. Which has to impact employment, domestic income and industry at a minimum? Am i wrong? What am i missing?
If you want to have a look at it, you can see it
here.
The basic idea is that all we need to do is to reorganize our priorities. The Tories are budgeting for an incredibly expensive prison extension (at a time when our crime rates are falling to very low levels) and an almost equally expensive fighter jet purchase. Just ending those two purchases leaves a lot of room for social programmes, in addition to reduced overall spending. Ending the mission in Afghanistan means massively reduced spending. Cracking down on tax havens and reducing (or eliminating, although that may not be entirely feasible) fossil fuel subsidies mean a significant uptick in government income.
Finally, as for the corporate tax hike... the thing to remember is that it was at 18% until January 1, 2011, when it dropped to 16.5% (they were hoping to go to 15% in 2012--for comparison, these are some of the LOWEST rates in the world). Bringing it back to 18% (2010 levels) or 19.5% (2008 levels) is not going to have a massive impact on on corporate investment in our country, or on employment. Indeed, we did quite well for ourselves up until 2008 (and even weathered that storm fairly well): we have definite (and recent) historical proof to the contrary. The corporate tax rate in the US varies from 15%-35%, and they do well enough (they have other problems). The thing to remember, though, is that corporations are not responsible for much job creation here any more--indeed, they're shifting the vast majority of their operations overseas, where production costs are lower (in addition to almost non-existent corporate tax rates and shiny government incentives). They aren't here to stay, even when the times are good. Take BCE, for example: over the last seven years, their profits have soared 25%, and yet a month ago they cut 700 jobs (clerical) in Ottawa and sent them overseas. The NDP's plan, therefore, is to give small businesses a 2% tax cut instead, and to give them a $4500 tax credit incentive to create jobs at the local level, along with a (smaller, $1000) credit for maintaining that job for at least one year. Now, to be fair, the Tory budget was going to give small businesses a temporary $1000 EI break--but it wasn't tied to the creation of new jobs, like the NDP's proposal.
The reality is that we can't keep doing corporations favours and crossing our fingers that they will invest in Canada and leave (let alone create!) jobs here. Laissez-faire subsidizing is a mistake. You have to clearly define your goals, and set up your subsidies so that you can reach those goals by incentivizing them. A blanket, no-strings-attached corporate tax cut may or may not result in job creation; it will, however, result in more corporate profit. By contrast, tying tax cuts to job creation guarantees that you don't end up paying a company to twiddle its thumbs and do nothing to benefit Canada. The first (Tory) plan represents a gamble, and has a good chance of resulting in no net benefit to Canada and Canadians. The other (NDP) plan has solid guarantees: either jobs are created, or the taxpayer funds nothing. I'm not a gambler, so I prefer to bank on the sure thing.
Long story short, once again it comes down to whether you want to believe in voodoo economic mantras, or if you want to follow claims backed by evidence. We can't just spurt nonsense about corporate taxes and job creation as though we lived in a vacuum: we have to take into account the realities of Canada's situation, which are that a corporate tax rate of 19.5% (2008) scared nobody away, and 18% (2010) did not incentivize much new investment (16.5% hasn't been in effect long enough to tell one way or the other, and 15% was for 2012, and so hasn't happened yet). What we do know is that corporations like Bell have been posting record profits as a result, but have also been shifting jobs overseas. Incentives should be targeted and have concrete objectives, and be tied to strings that ensure those objectives are met. We shouldn't just be handing out money and crossing our fingers that some will trickle back down to the Canadian people.
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