Fiscal policy is really about taxes and spending and the federal government recently provided some hints on its plans in these areas.
In the recent Speech from the Throne, the government reaffirmed its commitment to balancing the budget by 2015-16 and providing "greater tax relief for Canadian families" after the budget is balanced. But what form this tax relief may take remains a mystery.
If there was ever a place that was the anti-Greece when it comes to public finances, it must be Alberta. Compare Alberta to many places around the world, be it European fiscal disasters, or even nearer to home, and in most decades, Alberta shines in comparison.
In 2012, the federal government shocked many Canadians by announcing an important change in the cherished Old Age Security (OAS) program, one of three key income programs for seniors. The reform, which was implemented in the 2013 budget, increases the age of eligibility for OAS to 67 from 65 beginning in 2023 with full implementation achieved in 2029. While the reform is a positive first step given the aging of Canadians, more is needed.
Imagine if governments engaged in a massive spending binge over the last decade, with the benefits falling to just a small part of the population and then hiked taxes four times to pay for it. Now imagine if they argued, in some Orwellian twist of illogic, that such excess generosity was fully funded, affordable, and sustainable this after the multiple tax hikes demonstrated they were not.
In his 1946 essay, Politics and the English Language, George Orwell argued that, political speech and writing are largely the defence of the indefensible. Orwell's quip came to mind again recently after reading Bombardier's defence of taxpayer subsidies to business, this in response to my recent study on the matter.
Back in 1962 John F. Kennedy had been president of the United States for one year, four lads from Liverpool were about to hit it big in the music world, and a Saskatchewan lawyer, John Diefenbaker, was in his fifth year as Prime Minister of Canada.
In retrospect, 1962 was also notable for another reason: it was the start of a trail identifying corporate welfare recipients, many of whom have sought subsidies from the federal government ever since.
Canada is a superb creation and initial credit for that must, obviously, go to Canada's fathers of Confederation. How we came about is a fascinating tale of seemingly intractable regional disputes resolved, at least for a time, by new institutions and a new country.