05 October 2010

A leaf from Harper’s political playbook, by J. Layton

Jack Layton and the New Democratic Party want the federal government to drop the goods and services tax on home heating costs.

Layton had a wonderful story to go with his call, as recounted by Aaron Wherry at macleans.ca:

“Mr. Speaker, Frank Rainville is a senior in Sturgeon Falls, Ontario who told me about how his bills for basic utilities have gone up by $20 a month just this past month because of the government’s HST,” the NDP’s Jack Layton reported a short time later. “He asked me how he could cope with heating bills when he has to turn the thermostat on because it is cold up there. The fact is heating bills are going up all across the country and working families are struggling right now. Will the Prime Minister show some leadership, join with us and work to take the federal sales tax off home heating fuel now?”

Yes, folks, Jack Layton and his fellow new Democrats are standing up for the working poor, people and fixed incomes and all sorts of downtrodden, hard-done-by people. Well, at least that’s what the die-hard Dippers out there will tell you.

But just think about it for a second. Mr. Rainville is going to have to cough up an extra $20 a month for heating thanks to what Layton has taken to calling the Harper Sales tax.  Rainville’s on a fixed income and that 20 bucks will come in handy.  Even though Layton’s little HST cut is aimed primarily at voters in Ontario and British Columbia where the HST is very unpopular, there are plenty of Mr. Rainvilles throughout Newfoundland and Labrador and the same cut to the heating costs will help them out, too.

Yay, Jack.

Well, not so fast.

These sorts of blanket tax cuts – the stock in trade of conservatives  - have the wonderful effect of cutting costs and they have the even more wonderful effect – from a Connie perspective of helping rich people proportionately more than people like Mr. Rainville. In St. John’s someone in public housing will get a break, but the person down in King William Estates or one of the other swankier neighbourhoods springing up in St. John’s East will just love the cut on heating oil or electricity that it takes to make their blimp hangers all the more cozy in the cold January night.

If Jack Layton really wanted to help people on fixed incomes, he’d go for something other than a blanket tax cut. Layton and his crew would offer rebates or  - better still - tax breaks tied to income. That way the people who need the help the most could get it and those who can well afford to heat their massive homes can carry right on doing so while footing the bill for their choices.

And actually the problem is not just with giving a disproportionate big break to the wealthy – as the NDP idea would do – or carrying a huge public deficit while helping out the wealthy.  That’s all bad enough just as it is bad enough that the average Republican looking at this scheme would embrace Layton as a discipline of Karl.  

Jack Layton’s tax cut idea is also damned poor environmental policy. Canadians don’t need to be rewarding energy inefficiency or giving people the chance to consume more energy.   An across-the-board tax cut does just that.  It potentially makes the NDP vulnerable on the left from the Greens, but there seems to be a conscious effort in the NDP thinking that they should just look for more votes in places where they can fight Conservatives, like out west or in a couple of ridings in Newfoundland.  That’s pretty much in tune with the NDP position on the gun registry as well.

Now the NDP position isn’t all bad.  They do want to bring back an energy efficiency incentive program.  That’s a great idea and coupled with a targeted tax break scheme, it would be a progressive social policy.

Unfortunately, this isn’t about progressive social policy:  the New Democrats are playing politics like Stephen Harper.  This HST thing is just Connie-style retail politics.

And politically, it is a sensible  - if monumentally cynical - thing to do if you want to get elected.  Jack Harris in St. John’s East will win re-election handily with such an idea.  All the well-heeled people in his district will love his conservative policies while the people on fixed and low incomes will get a bit of cash to make them happy too.  Over in St. John’s South-Mount Pearl, the same thing applies even if there aren’t as many people with giant houses there.

Basically these sorts of Conservative-looking policies might help sagging New Democrat fortunes in a place like St. John’s where, as bizarre as the idea might seem, Conservatives will vote New Democrat if they can’t vote Connie for some reason.

It might work.  Too bad for Jack Layton and the New Democrats there likely won’t be an election for some months yet.  By the time people head to the polls federally, this sort of thing will likely be long forgotten.  But in the meantime it is interesting to see just exactly how much influence Stephen Harper and his Conservative Party have had on Canadian politics.

- srbp -


George said...

But, as regard to saving money for the rich people, the opposite is also true then. If you do keep the tax on for lower income people, it's not like the rich are going to miss paying out an extra twenty in the run of a month. They're not going to make one iota of a difference in showing interest in saving the environment by not using any more energy than they did before.
I believe that, if you keep that extra twenty on lower income Canadians, then you have a form of "enforced energy conservation" that is being done by them at a cost, beit comfort against the cold, or at the expense of nutrition if costs are really exhorbitant.
In March of 2001, our group garnered a good sampling of the people on this question of "tax on heat" and came up with 55,000 names on a petition for the removal of the HST from heat. Those names were gathered in six days and all that during one of the worst winters in recent memory in the province. The petition was presented in the House of Assembly on March 28, 2001.
It's my belief that Jack Layton is only mouthing the words of our group when we had the petition all those years ago. I'll always stand for a renegotiation of the whole HST agreement between provinces and the feds for simple reasons; that the tax is unfair and mean-spirited for a lot of consumers out there, but at the same time, very fair in other aspects of its coverage.
The tax should be removed on such things as basic essentials like heat, home care costs and funerals to say the least...

Mark said...

you'll note that by the time Question Period rolled around, Jack had changed his story. Now he's only proposing that the HST be removed from heating fuel. So if you heat your home with electricity,or with anything else, there's nothing in this for you, aside from having to pay a little more to cover the discount that Layton wants to give to our neighbour.

George said...

Yes Mark I saw that one...
Our petition back then covered all forms of heat, whatever the source. Our group's belief is that heat is a necessity in this country and it should not be taxed. Could cover anything from natural gas to wood as a chief source, but it should all be free of taxes.

Edward Hollett said...

George: I don't doubt people supported that petition but all the well-to-do people on your list will still benefit more from lowering HST on fuel than will people on modest, fixed and low incomes.

If we want to help Mr. Rainville and at the same time do a lot of other public good, I think we can do better than save incremental costs on heating. If you follow the logic the Connies already did more for Mr. Rainville with their lowered HST/GST.

And that's really my point: this NDP scheme is basically just the same thinking that drives Conservative policies. It isn't about standing up for the little guy or any of the other hoary rhetoric.

If you really wanted to help the Rainvilles of the world and do other good things at the same time there are bunch of ways to do it, including funding a good home insulation scheme that targets homes more likely to be owned or rented by fixed/low income individuals. Or improve public housing so that Mr. Rainville can find a place with even lower heating costs.

And as for getting rid of all taxes, that sounds like a wonderful notion. But will it really lower costs to consumers or just open up more room for private sector profit? Not that that would be all bad, necessarily, but just look at gas prince regulation: it turned out to be a great scheme for boosting retailer and government revenues. Consumers? Still getting it in the wallet.