Martin gives like Santa, cuts like Scrooge
Friday, December 19, 20030 Comments
When Martin chose his new thirty-eight member cabinet, he not only eliminated two dozen perceived Chretien loyalists, but he eliminated the position of Minister of State for Housing (and even failed to immediately identify which of his ministers would handle housing issues). Martin is the man who wrote in 1990 that “it is vital that the federal role in housing be strengthened both at the political and administrative levels”. Neither did Martin appoint a new minister responsible for Urban Affairs, as he was expected to, even though he has long promised “a new deal for cities”. Somehow, he did manage to find room at the cabinet table for someone responsible for “new and emerging markets” and “civic preparedness” (important issues, no doubt, but surely not as important as ensuring that all Canadians have a place to live, or rescuing cash-starved municipalities).
Martin also capped the size of the public service, froze the pay of non-managerial public sector workers, and froze spending on capital projects such as rail transportation, museums and buildings in the hopes of finding several hundred million dollars. As Finance Minister, Martin consistently and deliberately underestimated his surpluses, but now he claims to believe that the federal government’s surplus is “razor-thin” or even “a rounding error”. Ostensibly, whatever savings are found will be spent on previously-budgeted health care transfers to the provinces and new helicopters for the Armed Forces.
But, the real reason that the government is now looking for savings is that they need to make up for a $4.4 billion corporate tax cut that is scheduled to take effect on January 1. NDP Leader Jack Layton argues that the government should be cancelling these corporate tax cuts, “instead of ... crying poverty while stuffing money into the pockets of their friends at a ferocious rate.” $4.4 billion is “a huge sum of money that's about to be given and the largest Christmas present in Canadian history to corporate Canada. It works out to $141 per Canadian going to companies instead of social programs. It should be stopped,” said Layton.
Martin, who seems to be spending a large portion of his time responding to what Layton says, has rejected the suggestion that the tax cut be cancelled. “I would doubt that that's where a change would be made - the focus is going to be on government spending,” he told reporters. When asked about the favours he accepted – such as complimentary flights on corporate jets – Martin defended himself by saying that it was acceptable to break the conflict of interest guidelines because the millionaires in question are his “close personal friends”. Martin certainly knows how to take care of his many close personal friends. “That's fine that they organize big fundraising dinners for him and that he associates himself with them and they're his friends,” said Layton. “Well, are the people who take buses not his friends? Are the people who need long-term care beds not his friends?”
Ralph Goodale, Martin’s Finance Minister, argues that the corporate tax cut is part of “a balanced strategy” to cut taxes – one which he contends has largely benefited the middle class and the poor. “The vast majority of our tax reductions over the last number of years have focused on middle income Canadians and lower income Canadians.” It would be generous to say that this statement is the opposite of the truth. Approximately 70% of taxpayers earn less than $40,000, but this group has received only 36% of the value of Liberal tax cuts.
When he was Finance Minister, Martin liked to boast that he had reduced program spending (on a per-capita basis) to levels unseen since the early 1950’s. That’s certainly not something of which a government should be proud when, as the Canadian Centre for Policy Alternatives reported last week, the social deficit was increasing even more rapidly than the fiscal deficit was being reduced. “Despite the impressive growth of real GDP per person between 1993 and 2003, working families mainly increased their incomes by working longer hours. These gains in labour income from higher employment were offset by lower income transfers to households from all levels of government,” reported the CCPA. “Poverty rates for the working-age population in 2001 were still well above the level of 1989, when unemployment was at about the same level.”
Apparently, there are no Christmas presents available to the poor and middle class, although they clearly need a break far more than corporations. Too bad they’re not Martin’s “close personal friends”.