Tuesday, June 7, 2011

A Tax on Tax and Quebec Compensation

In the summer of 2009, my wife and I decided to purchase a new vehicle.  After much looking around, we ended up picking up a Subaru Forester (and thereby securing the employment of 2.41 oilsands workers for 1.7234 years, but more on that later...) as we felt that, for a wide variety of reasons, this would serve our purposes.   And...as good free-marketers,  we purchased the vehicle in North Dakota as the cost savings was nearly $5700 with a full warranty, even after duty and exchange etc.   So...when we went to pay our duties and taxes at the CBSA station, I was a bit surprised as to why the figures out I calculated were off.   As it turns out, I was being charged GST on top of the Air Conditioning Tax I had to pay.  GRRR....Of course, we get into this issue all the time with GST and PST being charged on top of gas taxes...so...I have to go GRRR...again.

Now...expand this little story, if you may to the federal government budget on Monday.    Amongst the bits of the budget (Jim Flaherty had way too much fun to present this, by the way), was an item promising $2.2 Billion in compensation to Quebec for their Harmonized Sales Tax.   As a matter of public policy, I actually like the concept of HST as I think that long term, it creates efficiencies in our overall tax code.  (As an aside, the concept of this as public policy is distinct from how it was sold as per the debacle in British Columbia that led to Gordon Campbell's downfall and Christy Clark's ascendancy).   There are also legitimate concerns about prior partially exempt services that now feel the pinch of the HST, so from a cash grab point of view there are a variety of rebates that could be applied (although to raise corporate taxes as per Christy Clark in BC  would be an epic fail from my perspective).

In any case, Quebec's concerns about not being compensated fairly are legitimate.   If the Atlantic provinces could be compensated in the 1990s, and if Ontario gets $4.3 Billion and BC would get $1.6 Billion respectively from the Feds - well fair is far.

Here is what I have a fundamental disagreement with, though...in Quebec (and to my chagrin...PEI), the HST is calculated on top of the base cost of goods and services AND the 5% GST portion.  In every other province with HST, the PST portion is caculated on the base costs of goods and services ONLY.   Thus...in Quebec...this is tax on tax.  Instead of an advertised 13.5%, this is an actual tax rate of 13.92%.    So...I think that there should be a clawback of $88 Million to reflect the extra 4% in revenue Quebec is getting over other parts of the country that get/proposing HST compensation.  The problem here, though, is that to do this would infuriate the soverignists and then we start getting deeper into the pandering of Quebec/assymetrical federalism issues all over again.   Heck..if a $15 million cut in the Arts somehow became an attack by Stephen Harper on Quebec culture, how would a clawback of $88 Million (to make it in-line with other provinces) look like?

Sigh...

Saturday, June 4, 2011

The Politics of Protest

It was March 2005, and as a member of the local Conservative Electoral District Assocation, I had the priviledge of attending the inagurual Conservative Party of Canada National Convention in Montreal.   It was an awesome time, connecting with other Tory activists, hearing the future Prime Minister give his most fiery speech to the faithful, good hors d'oeuvres, Montreal smoked meat (excuse me while I momentarily drool a la Homer Simpson here) and free booze.  To me...it was a mixture of networking, serious policy discussion and a bit of hero worship.  

And of course...there were protesters that were opposed to certain ideas that the Tories believed in.  About 100 people or so held placards, outside the Palais de Congress convention centre, shouting equal rights for gays and lesbians, hands off my womb, the Tories hate Quebec, etc, etc.  And...they were absolutely entitled to their viewpoints and protest

Now...think about a new scenario (for us right wing types, this might seem straight out of the Matrix, so make sure you swallowed the blue pill!)...in an NDP government where the RH Jack Layton, in his assymetrical federal wisdom, has just shut down the Alberta Oilsands but has allowed development of Quebec's shale oil resources.   Their convention is going on in Vancouver, when all of a sudden, 100 newly unemployed Alberta oilsand workers descend on the Vancouver Convention Centre, shouting that the NDP is killing jobs, hates Alberta, etc.   The fallout begins and the accusations being that big oil is behind these protests, the protesters are redneck uneducated rubes that are being used, Tory donations were used to help with travel expenses, and generally speaking this protest is not reflective of "tolerant Canadian values."

Why do I describe this hypothetical (and possibly really far-fetched) example above...well...the name Brigette DePape, the now turfed Senate Page who displayed the "Stop Harper" sign during the throne speech comes to mind.    Some of my friends on the left have made the argument that as context matters, there is more justification in her actions.   Speaking on the right (and I think for those who are not really engaged politically), I think that her actions should stand by itself.  Labels such as  "she's got spunk" and "rage against the machine" are all of a sudden in-vogue by the left vis-a-vis her actions.

But there is another element to this story that should be considered.   Protest happens whenever people feel disenfranchised.   But...disenfranchised people are not the exclusive domain or monopoly on the left, as the right feels the same way depending on their issue.    And..as I reflected on what I consider the unprofessional nature of Ms. Depape's protest  I started thinking about why is it that when one trends more on the left, it is somewhat acceptable to protest in radical ways.   Think about this...if there were two thousand farmers descending on Parliament Hill screaming their heads off about the continuance of the Canadian Wheat Board, they would be labelled as neo-Nazi, dumb-ass farmers that are standing in the way of progressive policies.    On the other hand, if there were two thousand people descending on the same hill, advocating  the shutdown of Canada's nuclear reactors and a Greenpeace banner was displayed on Centre Block (again), it would be seen as somewhat enlightened, clever, witty, etc.  

It just makes you wonder whether some disenfranchised protesters are more equal than others.