Monday, April 11, 2011

Ignatieff stands alone—which Liberals should we believe?

There are times when the average Canadian is fed such contradictory  information from Liberal leaders that one wonder’s whose word can be taken SCC Book and computer screenat face value. I can’t remember a time when there was so much contradiction within the same party over such a fundamental issue as corporate taxation.

Much as his likeminded colleague Jack Layton has done, federal Liberal leader Michael Ignatieff has based virtually his entire campaign platform on a foundation of increasing corporate taxes. According to Mr. Ignatieff, past cuts to the corporate tax rates have been, as he puts it, “corporate tax giveaways.” Both politicians are also counting heavily on billions of dollars from new cap-and-trade/carbon tax schemes to finance their socialist agenda, but that’s another story.

Other Liberals, however, are telling Canadians that corporate tax reductions are a good thing—they claim increased business investment will lead to more jobs and higher incomes for Canadians, and so forth.

In his most recent provincial budget, Ontario’s Premier Dalton McGuinty has chosen to continue a schedule of lowering the corporate rate for corporations, cutting it to 10 per cent from 12 per cent by 2013. (Source)

“These comprehensive tax reforms [corporate tax reductions] will position Ontario as one of the most attractive jurisdictions in the industrialized world for new investment. Increased business investment will lead to more jobs and higher incomes for Ontarians.

– Ontario’s 2011
Provincial Budget

Christy Clark’s Liberal government in British Columbia intends to reduce the small business corporate income tax rate to zero by April 1, 2012. And B.C.’s general corporate income tax rate has been reduced from 16.5 per cent to 10.5 per cent, with further reductions to 10 per cent in 2011. (Source)

The Liberal government of P.E.I. knows that it’s important to keep corporate rates low, it reduced its small business rate from 3.2 per cent to 1 per cent. (Source)

Not only do Liberal leaders who are actually governing a province not agree with Mr. Ignatieff’s pie-in-the-sky philosophy of corporate tax hikes to fund social programs, but others who agree with his general trend towards socialist policy also differ on corporate hikes.

For example, the NDP government of Manitoba’s premier and former finance minister Greg Selinger has eliminated altogether its income tax on small corporations as of December 1, 2010, and also has plans to reduce the general corporate rate. (Source)

Even Mr. Ignatieff’s own shadow cabinet is not unanimous in agreeing that a corporate tax hike is a good thing. As previously mentioned on this blog, March 27, on the Roy Green radio show, the Liberal MP for Markham-Unionville, John McCallum, could be heard admitting that Ignatieff’s plan to raise corporate taxes from 16.5 per cent to 18 per cent would cost the Canadian economy jobs. (Link to clip here.) And remember, readers, John McCallum is one of the senior Liberals. He is a former Liberal cabinet minister and was the Royal Bank of Canada’s chief economist for six years.

Remember also that the legislation that lowered the federal corporate tax to its current level was supported by Mr. Ignatieff’s Liberals.

So which Liberals should we believe: the ones running for office in Ottawa or the ones already in office in the provinces, that is, those who are charged with real not theoretical economies to manage?

Is Mr. Ignatieff lying to us, or is he just misinformed? I really don’t have and answer to that, but does it really matter? My common sense tells me that Mr. Ignatieff, with no experience whatsoever in government, is not likely to know more about taxation strategy than so many others who disagree with him—he stands virtually alone among Liberal leaders when it comes to corporate tax hikes.

To conclude, I join this morning’s National Post in reminding readers of the words of former Liberal Prime Minister Paul Martin, “Do you want to tie Canada’s hands behind its back? Then increase corporate income taxes.”


© 2011 Russell G. Campbell
All rights reserved.

1 comment:

  1. Couple of distinctions, first it isn't always necessary for provincial parties to act the exact same as their federal counterparts (Danny Williams and the ABC campaign comes to mind). Second in two of the 3 cases you mentioned it is 'small business corporate tax rates' not just 'corporate tax rates'. That alone makes a big difference.