When Ottawa went looking for foreign-made goods on which it could eliminate the import tariff as part of its 2013 budget, it could have chosen garden umbrellas (7 per cent), or bowling shoes (17.5 per cent), or diesel-electric locomotives (9.5 per cent), or even grand pianos (7 per cent). Instead it chose hockey equipment, golf clubs and baby clothes, to the tune of $76-million. The move was an apt demonstration of an unhappy quirk in Conservative fiscal policy under Prime Minister Stephen Harper. Instead of conserving scarce revenues and further reducing the deficit, the Harper government frequently moves to subsidize consumption to the benefit of its middle-class base. It’s cynical, but in a folksy way.
The tariff cut on hockey equipment was seen for the nakedly populist move it is in The New York Times and Wall Street Journal. Their coverage of what both otherwise considered a “frills-free budget” (WSJ) was tinged with the same anthropological marvel that would have been found in stories about a reduction in import tariffs on cricket bats in India, or soccer balls in Italy.
Whether Canadians will recognize the move for what it is remains unclear. Those who play hockey, or whose children play, will be grateful that a full set of gear could come down by $200 (if and only if retailers pass the savings on). But the move will do little to help low-income families that were probably already priced out of the minor hockey world, what with its league fees and other costs. Cheaper golf clubs and hockey sticks are of little consequence, if not an outright insult, to any Canadian struggling to put food on the table.
The fact is that Mr. Harper’s government has repeatedly reduced or eliminated well established sources of revenue in the name of middle- and upper-middle-class spending. The biggest such cut was the decision to twice lower the GST, another populist but fiscally unsound move. The second reduction of the GST, in 2008, has cost Ottawa at least $6-billion to the benefit of Canadians with the most money to spend, and at the expense of future generations that will inherit our debt.
The Harper government could have lowered some of the many tariffs on foods that keep prices higher here than in the United States, which would have been a boon to all levels of income earners. It could have lowered tariffs on factory equipment to help the country’s struggling manufacturing sector. Or, best of all, Ottawa could have maintained its consumption taxes and tariffs and, if not reduced the deficit, at least invested the money in human capital. But the Harper government chose to make hockey pants and putters less expensive. Enough said, really.