Getting the shaft from Stephane Dion
Lorne Gunter, National Post Published: Monday, July 14, 2008
We won't know until later this month when the federal Department of Finance releases its fiscal monitor for April and May whether Ottawa has continued to pile up huge budget surpluses through the spring, even as the national economy softened slightly.
But from the last fiscal monitor -- a month-by-month accounting of federal revenues and expenditures -- we learned that the federal government had a surplus at the end of March of over $10-billion, despite the international credit crisis, the soaring cost of fuel, the decline of our manufacturing sector and $2.5-billion in spur-of-the-moment spending on infrastructure, policing and stimulus for manufacturers.
The feds achieved this surplus while increasing spending by nearly 8% in 2007-08 and accelerating the reduction of the GST to 5%, cutting income taxes for the lowest-income Canadian, increasing the basic personal exemption for all tax filers and lowering corporate taxes slightly.
In other words, despite a slowing economy, rapidly growing federal spending and several tax cuts, Ottawa still managed a surplus almost double what was projected for the last fiscal year.
How come?
Answer: Western energy sales.
Oil prices are so strong and sales so high that despite a slouch (not quite a full slump) in the rest of the country's economy, Ottawa's tax take from Alberta's and Saskatchewan's oil and gas sales is enabling the federal government to overspend and still run double-digit surpluses.
Even the higher than expected revenues from personal income taxes revealed in the last finance report was driven in part by the high wages being paid in the West.
Why I am telling you all this? Because Stephane Dion proposes to make the West the bad guy in his Green Shift scheme. The Liberal leader wants other Canadians to think Westerners are nothing but greedy oil tycoons who are not contributing their fair share and therefore should be bear the brunt of his proposed carbon taxes.
Two weeks ago, Mr. Dion intimated that while Alberta and Saskatchewan have just 13% of the national population between them, their economies could -- should -- pay up to 40% of the cost of his carbon tax because they produce 40% of Canada's carbon emissions.
At about $16-billion a year in new carbon levies, the Green Shift would cost each Canadian about $500 a year -- just under $2,000 for a family of four. Mr. Dion has promised to return that amount in the form of income tax cuts and subsidies. His proposal would "shift" part of Canadians' tax burden from income to energy consumption.
But if won't shift it evenly across the country. By aiming his taxes at producers, rather than consumers, Mr. Dion clearly means to extract more of his new revenues from some provinces than others -- not coincidentally the provinces that seldom elect Liberal MPs.
The share of the green taxes he wishes to impose on Alberta and Saskatchewan would work out to nearly $1,500 per capita, or $6,000 per family. In the rest of the country, the load would be just $325 per person or $1,300 a family.
And it's not as though Albertans, in particular, aren't making a disproportionate contribution to federal finances already.
In addition to fuelling the federal budget surplus, Albertans contribute about $4,000 more per person to federal finances than they receive back in federal program spending. By comparison, the fiscal deficit Ontario Premier Dalton McGuinty frequently speaks of for his province is just over $1,500 per person per year, and Green Shift wouldn't raise that to $2,000.
Add together what Albertans are already contributing to Confederation with the green surcharge Mr. Dion is proposing, and Alberta families would be kicking in more than $20,000 extra per family if the Liberals are ever returned to power.
Mr. Dion spent four days in the West last week insisting it was not his intent to punish any one region for his environmental fantasies. But on Thursday, on an online news site for northwestern Ontario, Liberal MP Ken Boshcoff admitted that Green Shift was not an environmental proposal, but rather "the most aggressive anti-poverty program in 40 years," designed to "transfer wealth from the oil patch to the rest of the country."
Perhaps you are beginning to see why many Westerners have taken to calling the Liberal leader's plan the Green Shaft.
