2010 Budget Choices

 The next federal budget will make important choices.

The Conservatives are promising to “stay the course,” with the same old idea: keep cutting corporate taxes that will lead Canada into even deeper deficits.

The NDP thinks this is not the what our country needs today.

“As a result of 10 years of cutting corporate taxes, individuals are carrying 61 per cent of the cost of government programs, while corporations now pay only 15 per cent,” Sault MP Tony Martin said. “This is not only unfair to taxpayers but hurts all Canadians denied services the government will cut.”

Why do we need to postpone the corporate tax cuts? Quite simply, Canada can’t afford them right now. There is a record annual deficit of $56 billion and between 2008 and 2013 the business tax cuts are reducing the government’s tax take by a cumulative $60 billion. Without the corporate tax reductions brought in by Flaherty since 2006, the $160 billion cumulative budget deficit being run up by 2014 would be reduced by more than one-third - to about $100 billion.

With 1.5 million Canadians still unemployed, growing inequality and with seniors’ poverty doubling since the last round of service cuts, now is not the time to spend another $12 billion on corporate tax reductions.
 
Instead, this is the time to invest in Canadians who need the help.  For example, it is the time to invest in a better quality of life for our poorest seniors through improvements to the Guaranteed Income Supplement.

The facts about seniors’ poverty:

• After 20 years of reductions, the rate of seniors living in poverty doubled from three percent in the mid-1990s to six percent in the mid-2000s.  (Conference Board of Canada, 17 September 2009)
• The maximum GIS benefit – intended for the lowest-income seniors - was approximately $650 a month in 2009 – only $50 more than it was in 2005.
• The maximum annual Old Age Security and GIS benefits are approximately $14,000, which is $4,000 below the poverty line in most cities.

The facts about what corporate handouts are costing Canada’s treasury:

• Harper’s tax handouts to corporations cost Canada $5.3 billion last year and will cost an estimated $12 billion this year.
• The Parliamentary Budget Office estimates a $19 billion structural deficit in three years.  $15 billion of that deficit will be the cost of corporate tax cuts.
• Since Liberal and Conservative governments started cutting corporate taxes 10 years ago, individuals are carrying 61 percent of the cost of government programs, while corporations now pay only 15 percent.

The Conservatives believe broad-based corporate tax cuts will create jobs. But that’s not what the evidence shows.  If they cancelled those cuts, they could lift every senior above the poverty line by increasing the GIS.

Stephen Harper’s choice:  More of the same corporate handouts.

Jack Layton’s choice:  New ideas to improve retirement security.