Flurry of tax cuts leads to social deficit

Lana Payne
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Surprise, surprise. After bragging about his government's tax-cutting policies - policies that have virtually emptied federal coffers - federal Finance Minister Jim Flaherty says not to worry, he has a plan.
It's nothing bold. It won't make Canada a better place. It's pretty much the same, tired, old policies we have grown to expect from fiscal conservatives - like Flaherty's former boss, the ex-premier of Ontario, Mike Harris.
After squandering billions and billions in surpluses, Flaherty admitted last week, according to one news report in the Toronto Star, that he will not hesitate to chop programs and services in order to balance future budgets. But then, one could argue that was the plan all along, given his and his current boss's preference for "smaller government."
The last time a Canadian finance minister did this, health care and education budgets were slashed and Canadians are still paying for it. Smaller government does not mean we will get better government. In fact, it often means important programs and services that were once funded out of the public purse become an individual's responsibility. If you can't afford those services, then you're out of luck.
In fact, Paul Martin's infamous 1995 budget that stole billions of dollars from health care could arguably be one of the root causes behind botched breast-cancer tests in this province.
When you remove that kind of money from a system overnight, as Martin did, there are consequences. There is less money to hire and train staff. There is less money to buy life-saving, state-of-the-art equipment. The result is a health-care system that is sent into shock.
And even though funding was later somewhat restored to health care, the damage had been done and could not be easily repaired.
This, of course, in no way excuses how Eastern Health and provincial ministers handled the health crisis now under examination by Justice Margaret Cameron. It certainly does not excuse the callousness in which breast cancer patients were treated - nothing excuses that.

Important lesson
But there is a message in this for those who see budgets as mere balance sheets, the same way there was a message in the tainted water scandal in Walkerton, Ont., several years ago.
Budgets and the tax dollars that are allocated in them are about people and communities. They are about our public safety, our health, our education. And ultimately, they are about choices.
Today, Canada is a country that is crumbling under the weight of inaction, and instead of doing something about that, Flaherty is singing the Mike Harris mantra from Parliament Hill.
Canadians need to remember that these polices failed Ontario. And now the Harris Tories, a good number of whom are sitting in the Harper government and cabinet, are busy inflicting their disastrous policies on the rest of us.
Flaherty is adamant. He will not raise taxes in order to balance a budget. Of course, he doesn't need to raise taxes. He just needs to cancel the latest round of universal corporate tax cuts announced in his 2007 economic statement. That should provide enough of a cushion as Canada seeks to weather the latest economic storm from south of the border.
But that wouldn't fit in with Flaherty's plan to do what economist Armine Yalnizyan describes as limiting the federal government's capacity to act.

Poor investment
The single-minded debt-reduction and tax-cut plan of the former Liberals and the Harper Conservatives has "constrained Canada's ability to invest in itself and its future," Yalnizyan says in a recent report for the Canadian Centre for Policy Alternatives.
She notes that over a 15-year period, successive federal governments have blown $340 billion in surplus federal revenues on tax cuts. She adds that tax cuts don't build child-care spaces, make drinking water safe, create affordable housing, pay teachers, keep hospital beds open or build roads.
And they certainly don't provide training for hospital staff or pay salaries.
What they do is limit the ability of governments to help all citizens, including the ability to provide decent, high-quality health care. And what they have done, in the case of Canada, is reward the rich.
According to a recent study by the Organization for Economic Co-operation and Development (OECD), Canada is among 15 of 30 OECD countries that lowered taxes in the period between 2000 and 2006.
These tax cuts have diminished Canada's progressive tax system, notes the report, with "high-earning employees benefiting the most from significantly higher tax reductions than those in the middle and bottom parts of the earnings range."
Yalnizyan says we need to be clear when it comes to Canada's history with its tax-cut agenda.
"Tax cutting isn't just about cutting personal income taxes. It's about shifting responsibility for the public into private, individual hands. It's a twisted perversion of the line "ask not what your government can do for you" and instead, leaves Canadians to fend for themselves.
She says we all need to ask ourselves "who benefits from this one-dimensional kind of economic fundamentalism? And who doesn't?"
And in our province, the aftermath of these tax cuts and their subsequent impact on health-care budgets, combined with an unfathomable bungling on so many levels, has been tragic, haunting us a decade later.

Lana Payne is a former journalist who is active in the labour movement. She can be reached by e-mail at lanapayne@nl.rogers.com.Her column returns April 27.

Organizations: Harris Tories, OECD, Harper Conservatives Canadian Centre Organization for Economic Co

Geographic location: Canada, Ontario, Walkerton Parliament Hill

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