The fine print

A couple of extra thoughts on the budget....

I suggested in yesterday's post that Finance Minister Bill Morneau had "given up" on any efforts at a crackdown on tax avoidance.  The Toronto Star begs to differ, here.  Other media outlets are not making so much of this, but the Star has been running articles about this subject for years, and is now trying to claim the credit, running the story under its "Star Gets Action" byline.

The headline on the article is entirely misleading.  Only one of the six measures hidden in the fine print of the budget papers is actually directed at the banks; the remainder are aimed at various techniques individual taxpayers have been using.  There's nothing here about the biggest and arguably unfairest loophole of all, the favourable treatment of stock options.  Overall, the government hopes to earn slightly less than a billion dollars from this supposed crackdown by 2022, which is fairly insignificant in the grand scheme of things. 

Separately, Morneau has been trying to rein in expectations that the government will roll out a true national pharmacare plan in the next year or two. The way that prescription drugs are paid for differs from Province to Province, since healthcare is a provincial responsibility, but in general some people h get their prescriptions paid for by the government (mostly seniors); some have private insurance policies that pay all or part of the cost; and some are on their own.

It now seems that the government is only going to "fill in the gaps" in coverage, that is, to find a way to provide financial help to those currently without either public or private coverage.  This does not seem like a good idea.  One of the claimed benefit of a national prescription drug plan is that it would allow the government, as a monopsonistic buyer, to secure much lower prices from the drug companies than the present patchwork approach achieves.  A partial plan would be unlikely to achieve such benefits.  Moreover, the existence of a public plan as a sort of backstop might induce employers and insurers to narrow the scope of their drug plans or increase the premiums, as a way of driving more people onto the new government plan.  This doesn't seem to be well thought-out, and the government's pharmacare "czar", Eric Hoskins, may have his work cut out for him.

And finally, today we hear that President Trump is about to impose big tariffs on imports of steel and aluminum, which would devastate what little is left of that Canadian metals industry.  Still think that $3 billion contingency in the budget will get you through, Mr Morneau?