or, “My arrogant opinion on the Federal Budget 2008“

I agree with Jack Layton who says this budget does nothing to help working families but I doubt that he has the same reasons as me. Instead of “helping” people or industries with subsidies, I would rather just see tax cuts and spending cuts.

1) the $5000 tax-free savings account
This is the most flamboyant feature of the budget and it is clearly a public relations stunt to gain votes. I am not going to condemn it because I think it is a good one. It is a step in the right direction by reducing the cost of saving. Furthermore, the more people keep in the bank, the more investment will be stimulated — if that is what you want to do. However, I fear it might just confuse the average person. [As such, I am sure this sounds like music to the ears of the accountants, brokers and other middlemen.]
Nevertheless, I have a few beefs. First, if it really is such a great thing, why wait? Why not start it now?? Secondly, why such a small amount of money?
In my opinion, it would have been much simpler just to lower the income tax rates. This tax-free savings account only helps people who have an idle $5000 lying around.

2) a new Employment Insurance crown corporation
This may be a devious strategy to wrestle control away from the current bureaucracy as an initial step towards more radical change. We will see. Nevertheless, I want the elimination of employment deductions all together.

3) new electronic passports
This is a step in the right direction because the validation is extended to ten years. Maybe in the future it will be extended even longer or dispensed all together.
Hold on. Why is this announced in a budget?? Oh, well.

4) subsidizing public transit; $500 million to support capital investments
I find this peculiar because of the amount. Spread across the entire country, I question what good this could do. I also question how it would be spread out. Instead, I recommend tax cuts and leaving municipalities to raise the funds on their own.

5) subsidizing transportation infrastructure
Subsidizing the transportation infrastructure is a tough one. A lot of environmental damage is a result of the transportation sector. I think the environment would be better protected if the full cost of transportation was borne by the consumer instead of subsidized. [Just in case you are wondering, yes, I know our fruits and vegetables would cost more. I do not see that as a bad thing.]

5) more funding for hiring police
Well, this is like public transit — see above. I recommend reducing the federal taxes instead and let the municipalities raise their own funds. Instead, lower levels of government are turned into beggars or lobbyists to higher levels of government.

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By the way, is it just me or does it seem a bit fishy that the federal finance minister is also the MP for an auto worker city? Anyway.

6) new funding for research (Automotive Innovation Fund, Canada Global Excellence Research Chairs, scholarships, etc.)
My views on research are very radical. I have a better idea: let every other foreign government subsidize research and we buy their cheap imports. A win-win situation — unless you are a researcher at the government trough, I suppose.
There is something to note specifically about these research “initiatives” as we like to call them: they are targeted to specific fields and sectors. Primarily, they are targeted at universities as opposed to the federal public service and to specific fields, namely: environmental, energy, natural resources, health, communications and information technologies.

Let me explain my radical laissez-faire perspective on research.
In general, I do not think the government should be picking winners and losers. Too much cronyism is concealed that way. If there is potential “economic growth” to be seen in an industry, those industry players should be the first to know it. They should fund their own damn research — otherwise, I do not trust the potential. If they are not able to ante-up for their own business, the tax-payer should not be the one to pay. Otherwise, the justification of “economic growth” is phony and maintains inefficiencies or monopolies.

7) more student aid
Student aid is the same as funding research — see above. I am against it. [I also think that formal education is over-valued as a result of the excessive subsidization.] However, this is clearly a vote-getter on the part of the government. It may also have been tossed into the budget to avoid an election.

8) reduced federal corporate income tax rate
On the surface, this seems like a good move however, if reduced corporate taxes are such a good thing, why wait until 2012 to get it done?? I do not buy any gradualist arguments. Furthermore, I would like to see tax rates go down for non-corporate businesses too.

9) increased Guaranteed Income Supplement exemption and the Northern Residents Deduction
These are just vote-getters. Like most of the proposed “tax relief” schemes, I would rather they just reduced tax rates instead of introducing more layers and loopholes.

10) I have had enough and I like round numbers.

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Unfortunately, the federal government can not lead us all to prosperity by lowering taxes because, collectively, we are just spending funny money. We constantly have to play catch-up with the growing money supply.

Notice the general theme of this budget (or most any federal budget for that matter) is that instead of letting us keep more of our own money directly, the government gives us incentives on how to “save” our money in specific government-chosen ways. Those methods of “saving” stimulate the economy, so to speak, but they also inflate the money supply. The real winners of these “initiatives” are the agents on the receiving end before the money cycles through the economy.