A $1.6B Middle Finger

We get it, B.C. You’re ticked off at the Liberals and you want to punish them. The fact that you’re throwing common sense, rationality and self-interest out the window is beside the point. You want to stick it to deceitful politicians. I get that.

But I don’t get stabbing your fiscal stability in the neck.

If you do a quick search of The Politic (the search box is down at the bottom of the right hand column), you’ll see that I have a beef with the idea of a harmonized sales tax. I don’t like the fact that it conceals the source of each part of the tax (though this could be alleviated by having retailers display the taxes separately while keeping all the other wonderful aspects of the HST), but c’mon man, that’s no reason to throw a tantrum when Gordon Campbell dupes you (and I know about tantrums, though my three-year-old is more reasonable when I tell she can’t have a chocolate cookie).

Consumption taxes are good. They’re less distortionary than so many other taxes. They reduce transaction costs. And if you build in the right mechanisms, they’re a hella lot more fair. And, oh yeah, the B.C. HST did that. The reach of the sales tax was, arguably, further reaching than your beloved PST, but the rebates (read: money in your pocket) that would be issued would out-weigh the inconvenience of having to pay more at the cash.

But I get it. The Liberals went about the wrong way, and you just hate it when politicians lie to you. Of course, you don’t seem to mind when Bill Vander Zalm lies to you (though, if that’s the worst thing he’s ever done…), but at least he lets you get some self-righteous populous rage on. Not like those darned elites pretending like they know better than you… oh, wait.

And that’s the point, right? Fiscal sensibility, balanced budgets, economic security, a simplified and fair tax code… that’s all meaningless compared to sticking it to the man. Bra-vo.

So, do you realize how much you’re in the hole for? Did you really think about what will have to be done to switch back to your archaic, sentimental PST? Do you realize you owe the rest of us 1.6 freakin’ Billion dollars? It was mentioned on Twitter that 1.6 million people voted in this act of grandstanding referendum, so that’s $1000 per vote that you owe us.

And to the BC NDP and its supporters, what on earth have you done? Sure, the federal NDP recently ran a fiscally irresponsible campaign, but, damn, if thye didn’t build up the NDP brand like no one else. I think they actually made people forget what ruinous policies the NDP actually stands for. But you wouldn’t let that spoil your fun. The Liberals needed to suffer and you needed to prove your economic illiteracy. Are you, in fact, blind to the reality that you need to expand your tax base to fund all the goodies you want to buy? Do you not realize that the HST was, on balance, a fairer and more efficient way to achieve that?

And to BC voters, do you feel good? Are reveling in the pain Gordon Campbell is, no doubt, feeling as parades around London? Do you think that everything will just be fine, because you’ve slain the bogeyman that is the overbearing elites? Do you actually understand what you’ve done? No matter how good it feels to rebuke the public servants who think so little of you, you have just dealt a major blow to the province that, I assume, you love so dear.

So, yeah, that big ol’ middle finger you thrust in the face of the ruling Liberal party, you just shoved it in your own eye.

B.C. HST: “Always look on the bright side of death…”

If deducting a tax is supposed to be good, then surely eliminating the tax altogether would be even better. However, it seems like we are not smart enough.

The recent nonsense coming from Stephanie Cadieux, B.C.’s Community, Sport and Cultural Development Minister, and parroted by Peter Leitch, chairman of B.C.’s Motion Picture Production Industry Association. sounds like the stupidest sales pitch I have heard in a long time to encourage the public to support taxation.

“Clearly we wouldn’t be competitive on certain productions and see less business [than we] otherwise would have. In terms of the exact amount, it would be difficult to know.”

–SNIP–

Remove B.C.’s HST advantage and Leitch said Ontario will “immediately market against us” and try to lure productions away from the province.

Oh, the irony! The drama of Monty Python seems a propos:

Life is a counterfeit and when you look at it
Life’s a laugh and death’s the joke, it’s true
You see, it’s all a show, keep them laughing as you go
Just remember the last laugh is on you

Say “No!” to MP3 levy

Canadian musicians should just shut up, drink their beers, play their music and be grateful that Canadians are willing to listen to their music.

Legends including Anne Murray, Stompin’ Tom Connors, Andy Kim, Tom Cochrane, Lawrence Gowan, Carole Pope and members of Triumph have signed a joint letter in support of the private copying levy to Industry Minister Tony Clement and Heritage Minister James Moore, along with contemporary sensations Chad Kroeger of Nickelback, Metric and The Tragically Hip. Rising stars including Sophie Milman, Eva Avila, Serena Ryder, Sarah Harmer, Kathleen Edwards, Hawksley Workman, Jacob Hoggard and Royal Wood are also signatories of the letter.

This recent demand of charging a levy on MP3 players is absurd and unjust. Musicians do not deserve a levy. In fact, they should feel honored when somebody copies their music! The musicians owe their fame and fortune to the tax-payer as much as they owe it to their own artistry.

It Almost Makes Me Want to Boycott Canadian Music

Did you hear the one about a favoured industry that is up in arms because they’re not getting all the money they want from the government?  Oh, sorry, I should be more specific:

Tony Clement, iPhone owner and federal Industry Minister, is unmoved by a renewed call for a federal fee on smart phones and handhelds to compensate artists for file-swapping.

…

He considers the recommendation – made most recently by an artists’ group this week – a dinosaur of an idea.

Mr. Clement says it’s up to artists to find a new way to make money in the age of Internet distribution.

For eight years, Canada has levied a charge on the purchase of compact discs that is supposed to compensate artists for the private copying of music. But fewer and fewer people use CDs to share music. The levy – currently 29 cents per compact disc – collects only $15-million a year now.

I’ve been a touch harsh on Tony Clement this past year, but I’m with him now.  I’m all for protecting intellectual property – up to a point – but a cash grab based on the assumption of guilt is a bridge too far.  It’s bad enough that they’re leaching off our CD purchases;they shouldn’t be allowed a windfall on the backs of iPhones and Androids.

The Deceit of the HST

I know I’m a little late with this, but I thought since Shane presented some justifiable outrage over British Columbia’s HST, I should present some outrage over Ontario’s HST.  Despite my defense of one aspect of the HST in the comment’s of Shane’s post – and despite my inclination towards replacing income-based taxation with consumption-based taxation – I am fully against the initiative.  I’m sure all my old Econ profs are horrified (sorry, Prof. Hay), but despite all benefits of a unified consumption tax, the HST is incredibly deceitful.

We already knew that the HST would lessen responsibility for politicians.  It’s a nebulous tax that belongs to no one in particular.  Thus, increases won’t be easily attributable to anyone one government or party.  The GST – as hated as it was when it was enacted – had one fabulous feature; you could always see how much it was.  The GST was born in 1991.  For 19 years, it was never increased.  Anyone see that streak continuing with the HST?

Now, we have another reason to hate this atrocious taxation policy.  The McGuinty government has decided to enact it before it has even become law:

In a move that will surprise many, Ontario consumers will get a taste of the province’s dreaded new harmonized sales tax (HST) beginning Saturday [May 1 - I said I was a little late with this], two full months before it is fully implemented.The early start applies to all products and services to be consumed after the 13 per cent tax’s official start on July 1. Airline tickets for fall travel, for example, will be subject to the new blended HST, as will gym memberships, theatre tickets and a range of other goods and services.

But of course, this couldn’t possibly be the government’s fault:

Provincial revenue minister John Wilkinson on Thursday defended his decision not to publicize the early transitional start. He said the rules have been posted on a government website since October. He blamed businesses for failing to inform the public about the changes.

“The decision of businesses as to whether or not they marketed that is up to them,” he told reporters. “But this information has been available broadly to the public since (October).”

Wow, now that’s chutzpah.  Beyond the fact that it’s not the job of private citizens to inform us of changes in tax policy, this just doesn’t pass the smell test.  Businesses have an incentive to get people to buy as far in advance as possible (they’d rather have your cash now than later), surely if they could have boosted their sales in April by highlighting the upcoming dishonest actions of the government they would have.

On the BC HST: Is That The Best You Can Do?

Roslyn Kunin is director of the British Columbia office of the Canada West Foundation.

She wrote a piece in today’s Vancouver Sun defending the HST, now that recent reports indicate 20 ridings have already succeeded in collecting enough signatures to repeal the HST, and the rest of them are gaining hard.

I have never seen such a pile of ridiculousness in my life.

The arguments come down to, “It will make us more productive by simplifying technology.  And that will make us better than the Americans.  Did you know they are more productive than we are?  And they’re getting better.”

The article could have been entitled, “The HST will make us Better Than Americans”.  Of course, that premise would have been laughed out of the newsroom – but that’s what the piece says.

If your central premise is that streamlining the tax collection process will make BC more competitive, you’d better back it up with facts.  Last time I checked, I don’t see companies that produce tills and other money-processing equipment charging companies less simply because the system has to do one less percentage calculation.

But more obviously, I don’t believe a single State in the USA has an HST.  Mainly because there is no Federal Sales Tax in the USA – although many cities and counties charge special sales taxes on certain goods and services.  So, basically this article, which the Vancouver Sun’s website advertises as one of the most read articles today, negates itself.  It says that we need the HST to be more competitive because America is more competitive than us… but the USA doesn’t have an HST.  They are kicking our butts productively because they work harder.  It has nothing to do with harmonized taxes.

Canada (and BC) needs to get off the pot (and the Pot) and work harder.  Not whine to the government about taxes being too complicated… never mind my 9 year old can calculate them in his head.

Surprise! Surprise! The NDP will raise taxes!

How’s that NDP majority working for you now, Nova Scotia?

The results from Finance Minister Graham Steele’s cross-province consultation on the province’s finances are in, and they indicate a sales tax increase is coming in next week’s budget.

Related: Government fiscal myopia (Tax! Tax! Tax!) cuts across party lines, it seems. The Quebec Liberals.

Update April 1: Éric Duhaime expounds on the tax and spend addiction of the Quebec Liberals. Increasing government spending by 3% “year after year after year.” Nice.

Stephen Harper aka John Maynard Keynes

CBC:

… the Fraser Institute, which champions free-market economic solutions, concluded government spending and infrastructure investment accounted for just 0.2 percentage points of the 1.1 per cent growth between the second and third quarters of 2009. [...]

“First of all, that’s completely wrong and quite frankly contradicted by very serious work that’s been done [elsewhere]” Harper told reporters. “Economic theory and history is clear, governments must … make sure [funds] are put to productive use in the economy to create jobs.”

And with that, Mr. Harper demonstrates he is a pro-Keynesian quasi-capitalist who really does not believe economic freedom alone can pull nations out of challenging economic times. Actions and now words have shown that when the pressure is on the CPC believes government must intervene by essentially reversing the generational taxpayer truck to the government trough and opening the valve.

The gig is up. A free market, small-government, fiscal conservative Mr. Harper is not.

Could Amazon be the first of many bringing jobs to Canada?

Amazon.com is looking to open a new Distribution Centre here in Canada, if Canadian Heritage allows for it.

Canadian Heritage has 45 days to complete the review launched Jan. 27, but it could be extended by another 30 days if needed.

Walid Hejazi, a professor of international business at the University of Toronto, said he believes the government is close to allowing Amazon in to Canada, a move that would be consistent with the government’s recent steps to open Canada to more foreign investment.

And doing so would provide better prices and more jobs to Canadians.

Paul Misener, Amazon’s vice-president of global public policy who has been meeting with government officials, says a Canadian distribution centre would provide a benefit to the country.

“We are pleased to be continuing to communicate with policy-makers about the benefits that we have brought to Canadian culture both within Canada and globally,” he said Wednesday.

With the Canadian government opening up the telecom and satellite industry to foreign ownership allowances, Amazon could potentially be leading the way (hopefully) for foreign corporations coming into Canada and being able to take advantage of the benefits of doing business in Canada.

But, in many ways, Canada has been a closed market to so many different competitors because of those very foreign ownership laws and how they slam up against our cultural preservation limitations.

However, if it happens, and more follow, those industry “giants” as some call them, will only add to jobs in Canada which leads to a larger tax base, both corporately and in individual spending.

And Jack Layton wants to prevent tax benefits for “big business”. Michael Ignatieff doesn’t think the current Budget will create new jobs for Canadians.

“We will vote against it, but in a way that does not provoke an election,” Liberal Leader Michael Ignatieff told reporters, speaking in French. “I don’t see a path in this budget that gets Canadians back to work. This is the key thing.”

Mr. Layton and Mr. Ignatieff, this is how this Budget could, and I stress could get Canadians back to work and raise our GDP to levels that can accomplish what the Budget proposes.

Instead of poo-pooing the Budget just because you hate the Conservatives, try finding ways to make it work, or make it work better.

Support the Government and encourage these initiatives that are bringing investors and jobs to Canada!

Lions and Tigers and Budgets! Oh my!

I have to say that I was amused by the reactions of the various Opposition Leaders to yesterday’s Budget release when they came out of the House of Commons. Robert Fife and Craig Oliver seemed to have a fun time dealing with Jack Layton and Gilles Duceppe. In fact, I was stuck by the similarities between said leaders and the colourful cast of The Wizard of Oz.

The Cowardly Lion (played by Mr. Michael Ignatieff) – ‘This budget is so very terrible that we simply can’t stand to support this government! In fact, we are so unhappy with it, we’ll rrrruff, and we’ll rrrrrufff! and we will vote against it with at least fully half of our caucus!’

Yep. So instead of getting fully behind his rhetoric and getting his entire caucus to vote against the budget, he opts for the cowardly route. Not that I’m looking for an election or anything, since that would just be stupid on anyone’s part. But still, it makes you wonder if Mr. Ignatieff has spine enough to bring consensus to his caucus and have everyone of them move in lockstep. Judging by his previous courageous stands, well, I’m not going to hold my breath…

The Scarecrow (played by Mr. Jack Layton) – ‘Well look, see, there’s a lot of things I like in this budget that addresses some of our larger concerns, but we don’t want to think about that. Look at the things he’s doing that I don’t like!’

Right! The ‘If I only had a brain!’ argument! Jack Layton couldn’t decide what he was going to do about the Budget. Was he going to support it? Was he going to vote against it? Was he going to try and negotiate? Was he going to do anything? Mr. Layton just couldn’t decide! So instead, he’s going to take it to his caucus and tap into the power of loony-left-groupthink and come up with something outrageous.

The Tin Man (played by Mr. Gilles Duceppe) - ‘You see, I don’t care about the rest of Canada. I only heart Quebec. This budget does not do the things for the Quebec Nation that we want, so since we don’t get special treatment above and beyond the rest, we vote no.’

Thanks Gilles! I think we knew that the man with no heart for Canada wouldn’t support a budget that doesn’t try to bribe Quebec with the rest of the nation’s money.  How very predictable, but then we expect that from Mr. Duceppe…wait, was that a redundant observation? We expect predictability…? Anyway, back to navel-gazing for you Mr. Duceppe.

So in the end, while we got the usual reactions from the usual suspects, I was at least momentarily amused by them. Carry on carrying on boys!

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