The Canadian Federal Government led by Stephen Harper has been open for years about its fiscal agenda: slash spending in order to bring the budget into surplus by 2015, then dole out all kinds of tax cuts to middle-class voters ahead of the expected October 2015 election date. However, Harper couldn't keep it in his pants that long. Just a couple of weeks ago he announced that the tax cuts, including a wildly inequitable income splitting scheme for married couples, would be effective for the 2014 tax year.
The result? Today, Finance Minister Joe Oliver announced that instead of recording a tiny surplus this year, Ottawa will instead record a deficit of about $3 billion. (All figures in Canadian dollars). The same tax cuts also mean that the projected surplus of more than $6 billion previously forecast for 2015 will now be just $1.9 billion. Surpluses are expected to continue over the following five years, but as Oliver admitted today, the fall in resource prices, notably for oil, has heightened the risks surrounding that projection.
As with everything the Harper government does, this is all about partisan political advantage, rather than the national interest. A couple of weeks ago, a Tory spokesman on a TV news show used the term "Trudeau tax" about every ten seconds over an entire five-minute interview. It's clear that the Tories intend to paint themselves as the only friends of the "middle class", whatever that is, while portraying Justin Trudeau's Liberals and Tom Mulcair's NDP as old fashioned tax-and-spend lefties.
The economy is still doing well enough, albeit not as well as the Tories like to claim, so it will be, along with Harper's nauseating macho posturing on the international scene, the key theme in the election, whenever that comes. And when will that be?? Early in his near-decade in office, Harper introduced a law providing for fixed election dates. Under the terms of that law, the election is supposed to be held on October 15 of next year, but there are growing reasons to think it will be held sooner than that.
Harper ignored his own law to call an early election four years ago, and there are plenty of signs, including the tax cuts, that he's setting the stage to do the same again in 2015. Trials relating to some of the political scandals resulting from Harper's stunt of stuffing the Senate with his cronies will get underway in the spring, and it will be hard to stop some of the muck from sticking to Harper. The Tories also have to be concerned that Justin Trudeau may continue to grow into his job as Liberal leader, and that there may not be as many opportunities next year for Harper to big himself up on the world stage. A late winter/early spring election seems more likely than the supposed "fixed date" in October.
By introducing the tax cuts ahead of schedule -- and before there's actually a surplus to give away -- Harper is trying to preempt the opposition parties, daring them even to suggest that they would roll back the cuts and do something different with the surplus. It might work, but it's actually riskier than it looks. As long as the tax cuts were just a political pledge, it was possible for a lot of voters to think they might benefit, which would encourage some, at least, to vote Tory.
However, now that the details are known, it's very clear that the number of people who will benefit is quite small, and many of them are probably Tory supporters anyway. People will start filing their 2014 income taxes early in the new year, and large numbers will then realize that they've been sold a bill of goods. Harper might try to get around that by holding an election as early as February, before most people have done their taxes, but given Canada's climate, calling an election in the winter is never popular, especially with the candidates. Harper's breathtaking cynicism has kept him in office up to now, but his luck may be set to run out.
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