When Ed Clark, TD Bank CEO, recently said that nearly all members of the Canadian Council of Chief Executives (a group composed of 150 of Canada's top CEOs) want the federal government to hike the GST to combat the deficit, he earned a quick rebuke from the Conservatives, who rejected his suggestion and referred to him in an email as the millionaire economic Czar to the Liberals. This in turn provoked responses from Liberal heavyweights including both Michael Ignatieff and former PM Jean Chretien.
Earlier this week, Finance Minister Rosann Wowchuk kyboshed a Harmonized Sales Tax (HST) for Manitoba. Her reasoning: We don't think it makes sense to impose $405 million in new sales taxes. While such rhetoric might be good politics, it is terrible economics and worse, actually misrepresents the facts.
As we come to the end of another tax season, some Canadians will be eagerly awaiting an unexpected refund, while others will be frustrated by having to dig deep to pay an amount owing. For most Canadians, regardless of unexpected refunds or balances owing, the tax deadline provides a sobering reminder of just how much income tax they paid last year.
New Brunswicks new tax plan: Ontario take note: New Brunswick is considering a 10% income tax rate and a 5% corporate tax rate
Ontario Premier Dalton McGuinty could learn a thing or two from his colleague in New Brunswick, Liberal Premier Shawn Graham.
In 2006, after defeating the incumbent Conservative government, the newly elected Graham took a page from McGuinty's playbook and increased personal and corporate taxes. However, unlike McGuinty, Premier Graham seems to have learned from his mistakes and is reversing course.
Most finance ministers say now is not the time to cut taxes. But the experience of British Columbia provides a different perspective. In 2001, after a decade of dismal economic performance, the newly elected government enacted a series of bold, incentive-based tax cuts. The results have been nothing short of remarkable. If Canadian governments are worried about the health of the economy, they should follow B.C.'s lead and cut taxes.