The Agenda Behind Harper's Corporate Tax Cuts

The Conservatives' upcoming $1.8-billion cuts have not slowed government spending on prisons and fighter planes. So which programs will be cut, and which Canadians will pay the price?

What’s really behind the Harper government’s determination to start the $6 billion corporate tax cut with a first-stage $1.8 billion cut commencing Jan. 1, 2011?

The answer starts with the fact that corporate taxes in Canada are already some of the lowest in the industrialized world. Canada’s current corporate tax rate stands at 18 per cent – even lower than those brought in by the second Bush administration in the U.S.

Another clue to the rationale behind this rush to empty the federal coffers through corporate tax cuts – when there’s no desperate outcry from the business community to do so – lies with the historically high $54 billion deficit hanging over federal government spending. The Harper government is already issuing attack talking points, insisting that the only way for the Liberal Party to justify the financial viability of the recently announced family care plan (which would cost $1 billion to fund) would be to raise taxes elsewhere or to roll back the corporate tax cuts starting on Jan. 1, 2011.

The Liberals have already stated that they would not proceed with the $6-billion tax cuts in order to fund expected platform promises on daycare, education, and health care. By attacking those who assert the huge social downside of the corporate tax cuts, Harper is demonizing the opposition as “tax-and-spend” politicians who should not be trusted to be in charge of the federal treasury.

The method to the Conservatives’ madness is revealed in the areas they have chosen to spend scarce tax revenues. The Harper government hasn’t hesitated to drop an astonishing $16 billion on F-35 fighter planes (without neither a proper competitive process nor compelling national defence reasons for the purchase), $9 billion on prisons in the coming years, and tens of millions of dollars on dubious infrastructure projects, not to mention the massive overspending at the G8/G20 summits that doubled as free advertising and photo-ops for Harper, his cabinet, and MPs.

If Harper’s administration can find $1.3 billion for a 72-hour photo-op, a Liberal government may well find the money needed for the family care plan by reducing the planned spending on prisons to accommodate those who have committed “unreported crimes.”

The Harper government’s aversion to implementing major social programs was demonstrated in Human Resource Minister Diane Findlay’s callous rejection of the Liberals’ family care plan. Findlay defended her decision by asserting that family members should just use their vacation time to take care of critically ill relatives. Such a policy vacuum does little to deal with the looming resource challenges of an aging population that will not only demand more home and family care but will also break the budgets of all health-care institutions due to spiraling health and drug costs.

In the meantime, the billions spent on fighter jets, prisons, and other priorities of the Conservative Party will mean that the squeeze on federal spending on post-secondary education, vital cultural and artistic institutions, immigrant settlements, and critical municipal infrastructures will reach crisis proportions.

Ever since Harper took office, his administration’s not-so-hidden agenda has stripped the federal government of any sustainable fiscal ability to engage in major social programs. Serving this agenda has meant emptying coffers that already lack the funds required to improve the lives of First Nations communities and others imprisoned in structural poverty and to deal with new challenges relating to the environment, the loss of the manufacturing base, and productivity and innovation.

The result of Harper’s agenda will be a federal government with only the resources to focus on a muscular defence capability (which may or may not actually meet the country’s needs in a very complex global security environment), a harshly punitive criminal justice agenda even while crime rates are generally falling, and a foreign-policy and aid approach that promotes the values of the Conservatives. Harper’s goals may reflect those of the party, but they do not represent the desires of the country as a whole.