Christmas, Politics, and the GST

Brandon Sun, December 15, 2005 - David McConkey

Stephen Harper’s election promise to cut the GST may do wonders for national unity. For all of us Canadians love to hate the GST, don’t we? While cutting the GST may be good politics, it is not good economics.

Rather than cut a sales tax like the GST, a better way is to cut income taxes. That is the consensus among many, including the conservative Fraser Institute. Why?

Think of yourself and your family. Sure, you’d like to pay less GST when you buy a new TV or dine out. But, if income taxes were cut instead, you would keep more of the money you’ve earned. Then, you would have even more choices.

With more income, Canadians then could choose to buy more, or save for retirement, or invest in their children’s education. Andrew Coyne, commentator with the National Post and the CBC, is among those calling Harper’s GST cut a “policy disaster.” He points out that Canada’s productivity is falling compared to many other nations. We’re now poorer than Ireland. “What are going to do about it?” asks Coyne. “Apparently we’re going on a spending spree.”

“It is hard to overstate what a decisive turning point this is for the Tories,” says Coyne. “After this, they can no longer claim to be the party of hard choices and blunt truths, the party that will tell Canadians what they need to hear rather than what they want to hear.”

So much for Stephen Harper as a policy wonk.

The Green Party, on the other hand, would increase the GST in some cases. The Greens would reduce personal and corporate income taxes. As for the GST, its rate would vary.

The Greens would raise the GST on gasoline, coal, and other polluting products. At the same time, they would reduce the GST on energy saving and educational products.

This “green tax shift” would encourage the market to create less waste, but more jobs. As a society, we would consume less today, but invest more for tomorrow.

The Conservatives want Canadians to think of the GST as they do their Christmas shopping. The Greens remind Canadians not only to think of doing their income taxes next spring, but also to think even further into the future.

One of Stephen Harper’s predecessors as Tory leader, Kim Campbell, once said that "an election is no time to discuss serious issues." Let’s hope she was wrong.

One of the most important issues is our unsustainable consumption of resources.

We all shop. But someday it will be after Christmas.

Will we Canadians listen to politicians who challenge us to be smarter and more productive?