All of the opposition parties in Ottawa appear to be setting up for another election.
This time, they are attacking the Harper government’s business tax relief, demanding that business taxes be hiked. Instead they should be attacking wasteful corporate welfare using the tax relief as the perfect excuse to do so.
The Harper government has been increasing handouts for business since they came to power.
They have increased the number of so-called regional development agencies, having added one in southern Ontario and one in northern Canada.
They have also poured more cash into the budgets of all of these agencies.
Opposition parties have said nothing critical about this.
The Harper government has increased handouts to corporations through new and increased spending programs for mining, forestry and aerospace, for example; not to mention the $12 billion bailout of GM and Chrysler. Opposition parties have said nothing against these direct handouts to corporations.
The Harper government has been moving forward on making business taxes in Canada competitive with other OECD nations. The latest reduction took effect Jan. 1, when the business tax rate was lowered to 16.5 per cent. The final reduction is scheduled for next January, to 15 per cent.
In a strange about-face, opposition parties now decry these tax relief measures they allowed to be passed into law. Mr. Ignatieff, Mr. Layton and Mr. Duceppe are now, instead, demanding that business income taxes be hiked back to 18 per cent. This is on top of this year’s Employment Insurance payroll tax hike - $780 million for business and $520 million for workers.
Despite opposing tax rates they deem “help for business,” currently opposition parties continue to support corporate welfare handouts and demand tax hikes because they believe it is better for government to pick who gets the cash; when, what region, what industry, what firm, which friend.
If the goal of the opposition parties is to take money away from businesses or to help free up dollars to balance the budget, according to the Fraser Institute, there are at least $5.6 billion dollars of corporate welfare that go out the federal spending door each year.
Businesses deserve to compete on an equal playing field where politicians don’t pick winners and losers. Lower taxes help business get there, to be more productive and competitive. Hiking their taxes while dishing out corporate welfare won’t help. It’ll hurt. But business too shouldn’t have it both ways. They can’t both expect lower taxes and access to subsidies, grants and no-strings loans.
The federal government should keep up its approach to making business taxes internationally competitive.
They should just cut off the subsidies while they are at it.
Kevin Gaudet is the federal director of the Canadian Taxpayers Federation.
