This week our Prime Minister was quoted as saying ‘That would be crazy economic policy’ when discussing the issues in regards to Carbon Taxes on oil at this specific time. I have never been a big fan of old adages as they tend to generalize rather than look at specifics but in this case it is clear this is ‘The Pot Calling the Kettle Black’. If we are to look at the data; at the evidence; this would certainly be a case of one individual responsible for a litany of crazy economic policies calling another economic policy, crazy.
Our Prime Minister seems stuck on economic policies that he insists are creating jobs and are better for Canada. What is missing from his statements is the evidence to back his claims and the constant rhetoric used to try to bring truth to untruths. There is however a mountain of evidence from a variety of sources inside and outside Canada to support the fact that his economic strategies are not working and in fact could be called ‘Crazy.’ Our Federal Governments commitment to as another old adage ‘Putting all your eggs in one basket’ has put in Canada in a very dangerous fiscal position both now and as we move into the future. Diversification has always been a key component to any long-term sustainable economic policy. A balanced approach.
Our current Federal Government’s economic policy of supporting oil has been at the expense of the majority of Canadians as has been the results of another of their tax policies which lowered taxes for Corporate Canada in hope of creating jobs.
The goal of creating jobs is certainly the correct one, it is how it is being accomplished that is the problem. If we just take a look at one of the tax issues ignored by our current Federal Government we can see how ‘Crazy’ this economic and tax approach is.
According to an article by the Canadian Press on May 2, 2014 called Canadians’ use of tax havens grows to $170B. Other countries globally are working hard to reduce this loop-hole but not in Canada. According to Canadians for Tax Fairness this costs our government 8 billion dollars annually in revenue. If our goal is to create jobs let’s just do a quick calculation of what this means. First of all it doesn’t matter if the jobs are created by the corporations or government. It is only important we take that 8 billion figure as an example and use it to create jobs.
Question: How many jobs paying $50 000 a year would be created?
Answer: If all the money was used to pay salary
8B divided by 50, 000 dollars is:
160 thousand jobs
That means 160 000 people with full-time jobs making 50 000 dollars a year. That means 160 000 new jobs. That means if we took all that money and invested in youth and young adults between 20 and 30 it would be a substantial reduction in youth unemployment and child poverty. It would help children, families and the economy and here is why.
Question: How much tax would the government get from those 160 000 new workers?
Answer: If we use the tax rate of 20% it means 1.6 billion dollars of tax dollars to spend on health, education, investments, pensions basically whatever we need.
Question: Are there other benefits?
Answer: Yes. Take away the amount the 160 000 new workers paid in taxes you are left with another 6.4 billion dollars that will be spent on food, shelter, clothing and so on. That is an additional 6.4 billion dollars working for Canadians. We also often choose to forget the other side of the equation. We now have 160 000 people not unemployed and becoming self-sufficient. We will have healthy and happy Canadians which helps reduce health care costs. In the end our expense side of the ledger benefits. We also have more people contributing to all our social programs as well as the economy in general which is good for business.
This of course is just looking at one tax issue of how current tax policies are hurting Canada not only now but in the future. Prime Minister Harper is right about a healthy economy means jobs. It means good paying jobs. Where he is wrong is in everything he is doing. Nothing he is doing is helping achieve the goal of creating jobs. Most would also argue especially in regards to ‘oil’ current policies are also hurting the environment. Our deficit is growing, our economy is less diversified, we have increased child poverty, larger gap between the rich and poor and an environment at risk. Despite what some would claim, Canada survived the last global recession not because of policies of our current government but as a result of banking regulations by previous governments. We need to ask ourselves when was the last time we didn’t have a deficit budget? It certainly doesn’t have this current administration attached to the budget.
Call me crazy but if you stop listening to the words, the rhetoric, the untruths and look at the evidence it is easy to say our Government’s current Economic and Tax Policies are ‘Crazy’.
James W Hoddinott 