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Tories offer GST, income tax cuts

GLORIA GALLOWAY

Globe and Mail Update

Latest comment posted at 6:26 PM EDT 30/10/07

Swelling budget surplus allows Conservatives to cut GST to 5 per cent, Finance Minister announces on eve of Halloween income trust debacle anniversary ...Read the full article

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  1. bill johnson from Quebec, Canada writes: ...it is Don Drummond...

    Can someone explain the importance or benefit of the provinces alinging their taxes with the GST, and why it will cost 5 billion? Do consumers benefit?
  2. R M from Canada writes: Did I just get a tax cut? Both GST and Personal income????

    Wow reading this rag you'd think the Conservatives raised taxes.

    Lets make the story about the anniversay of the Income trust thing.

    I dont recall the Globe celebrating the anniversay of Chretien promising to scrap the GST, or set up national daycare, or anyone of the other 10 or so broken promises and Liberals lies?

    Who gives a $hit what Dion thinks about the GST approach let alone 29 or 30 un named anonymous G&M economy hacks.

    Lowered my taxes.... thank you very much, Good Job!
  3. Brett DAmelio from St. John's, Canada writes: a question... how does GST collection affect recording of inflation? Are inflation statistics based on the base item or are they based on the end cost? ie. a 1% drop in GST is a 1% drop in inflation (just because of the way they measure). I understand that there are goods that don't have GST on them ie. food, insurance.
  4. Jimmy Stewart from Canada writes: I love the subtitle - 'on eve of Halloween income trust debacle anniversary'. The Globe's brand of objective journalism at its best...
  5. J G from port moody bc, Canada writes: wouldn't a harmonized tax end up costing bc'rs more? as it stands, the pst applies to goods, not services. will we need to start paying the 7% on things like restaurants, cleaning services and such? wouldn't it also give the federal government control over our 7% tax and pave the way in future for getting a smaller cut?
  6. Big Red from Toronto, Canada writes: Finally a Conservative Budget. I hope Dion brings down the government and forces an election over this as I woud not think there would be many Canadians that wouldn't support this budget and give Harper a huge majority government that he deserves!
  7. Pierre Dionne from Toronto, Canada writes: Oh man, way to waste a perfectly good surplus. My only hope is that people don't change their buying behaviour, but pocket the extra change and save it.
  8. S S from Calgary, Canada writes: Why does this government think that reducing the GST is a good thing? The GST is a perfect kind of tax - it progressively taxes the population by hitting people who spend more. I believe the government should instead increase the GST and reduce personal and corporate income tax accordingly. But, of course, that answer doesn't have any political oomph.
  9. Art Vandelai from Burlington, Canada writes: A good balance between being progressive on income taxes and the promised cut to consumption taxes. Low income Canadians will see the most benefit from increasing the personal exemption. High spenders will enjoy the GST cut.

    Not so sure about the harmonization - many services that currently have GST in them (such as cost of professional investment management), will now also have PST. That could be an even bigger dent to savings. Need more details on how this will be implemented.

    A real progressive and conservative solution is one that encourages prudent saving and investment, while discouraging excessive consumption. While this isn't exactly moving in that direction, it's not a totally objectionable plan.
  10. Grant Bowen from Saneville, BC, Canada writes: Income tax cut???? They are only reversing the income tax INCREASE they made when they got in. At the time of the last election the lowest tax rate was 15%. Now what are they 'cutting' it to? 15%

    They take us all for fools...

    And to Brett DAmelio: lower consumption taxes increase consumer spending which drives inflation. Income tax cuts tend to drive up saving and investment which do not have that effect
  11. X. T. from Canada writes: No fan of GST cut, but income tax cut is welcome. Wish he cut more on the income side than the sales tax side. That would help us save some good money in pocket, instead of paying less at cash registers.
  12. Greg Van Zandt from Ottawa, Canada writes: bill johnson from Quebec, Canada writes: ...it is Don Drummond... Can someone explain the importance or benefit of the provinces alinging their taxes with the GST, and why it will cost 5 billion? Do consumers benefit? The proposal to harmonize the provincial sales taxes with the GST will improve Canadian productivity for two reasons. First, by eliminating the tax that firms now pay on their purchases of machinery and equipment, firms will find such investment more profitable, thus increasing the stock of productive capital that employees have to work with. This greater 'capital intensity' really matters. In 2001, the average Canadian worker had 15% less machinery and equipment to work with than his or her American counterpart, which explains in large part why personal incomes in Canada are 20% lower than in the United States. Greater investment in Canada will help to close this income gap. A secondary effect of increased investment is an improvement in technology in the Canadian workplace. As firms decide to purchase more capital equipment, they will invariably purchase the latest and most up-to-date machinery, the machinery embodied with the best technologies. Economists have long recognized that such technology embodiment is perhaps the most compelling reason for firms to invest. Workers will also receive pay raises as a result. And government revenues will also increase without the need to raise tax rates, thus making all manner of public programs more affordable. You can read more here: http://www.canada.com/nationalpost/financialpost/comment/story.html?id=57c95b97-292b-4fe5-afd6-878cbab3b86e&p=1
  13. Mark H from Canada writes: The Globe forgot to photoshop horns on Flaherty's photo. Nice caption... this is journalism?
  14. Alistair McLaughlin from Ottawa, Canada writes: Bill Johnson, consumers won't generally benefit from harmonization. Business will benefit from harmonization. Consumers will benefit from the reduction from 7% to 6% to 5%. That won't stop them from complaining when they start paying both taxes on their hydro bills and their haircuts, but overall the combined effect will still work out in consumers' favour. Believe it or not, it will be the very same people complaining about the GST cut (wah! we want income tax cuts instead) who will complain loudest about harmonization. They cried when consumption taxes were lowered, they'll cry again when they rise on a few items. Whiners will always find something to whine about. It's a reflection of their own character rather than government policy.
  15. Not the Alliance from In my opinion, The Harper Gov't is Incompetent., Canada writes: Bill Johnson one of the benefit is that it will simplify reporting - one set of forms for the retailers. As well for the Provinces, will make it optically less of a problem to raise PST when GST drops since consumers will see the one VAT when they buy stuff. Many Provinces WILL have to raise PST on their own in the face of downloading. And you're right - was wondering who this 'Dwight' Drummond fellow was. LOL!

    Is there more to this update though? Broad based tax cuts are going to have to wait?
  16. Grant Bowen from Saneville, BC, Canada writes: This announcement was timed not only to deflect criticism on the anniversary of the Conservatives broken Trust promise, but also to bury the Auditor General's report released today.
  17. Gronck the realist from Canada writes: Once again the idiot, Flathead, screws up, tax changes that make industry more competitive are what are necessary, not a stupid 1% cut in the GST!
  18. Northern Parrothead from Cariboo Country, Canada writes: Sigh - I was really hoping for income splitting for families. That would really help out the families, like mine, where we have chosen for 'quality of child-raising' reasons to have one working parent and one stay-at-home parent like the 'good old days'. It sure bites into our ability to give the kids what they want, but I believe it improves our ability to give the kids what they NEED in order to be the best they can be in the future.
  19. Prairie Boy from Canada writes: Maybe his mom DID give them this picture.
  20. John Silverman from Canada writes: instead of focussing on the 20 unamed economists that are against the gst cut perhaps the media should focus on the fact that a great majority of the people that vote are very much in favour of it. democracy actually working....wouldn't want to report or point that out.
  21. Dave P from Calgary, Canada writes: economists think a gst tax cut wont benefit the economy???? how does more money in my pocket to be spent on something else OR money in savings not benefit the economy?
  22. Alyssa Watson from Canada writes: Dont goverments usually raise tax's? or keep them at current level's wow christmas came early.
  23. Christopher Kiely from Canada writes: S S from Calgary, Canada writes: Why does this government think that reducing the GST is a good thing? The GST is a perfect kind of tax - it progressively taxes the population by hitting people who spend more. I believe the government should instead increase the GST and reduce personal and corporate income tax accordingly. But, of course, that answer doesn't have any political oomph

    It does with some S S... Give me the money I earn!
  24. David C from from the world that is, Canada writes: GST cut.. ok, you kept your campaign promise. Now can you send some cash to the provinces for healthcare? Maybe fix some wait times? Liberals cut the transfers for healthcare, can you restore it? do that, and get my vote. don't fix healthcare then you have not kept all your promises and I cannot promise my vote to ya. Don't you understand that healthcare is important to Canadians too?
  25. Carl C. from Montreal, Canada writes: I am happy about reducding the income tax for low-income earners, but lowring the GST is a bad idea... In Quebec, it is pretty certain that the provincial government will take this 1% decrease for themselves and increase the PST by 1%... BAD IDEA SIR!
  26. Alistair McLaughlin from Ottawa, Canada writes: On the anniversary of the 'income trust debacle?' Geez, and I thought Scott Brisson's income trust leak and subsequent RCMP investigation happened in the winter almost two years ago; not last October.
  27. david sandford from Canada writes: Whoopee doo. it was at 15 percent when they came into power then went up to 15.5 percent, and now they put it down to where the Liberals had it. Has everyone forgotten??? Duh.
  28. Glenn Finockio from Winnipeg, writes: Nothing like having your government ignore top economists, eh? This is just more election 'vote buying'... they are setting the income tax status back to what the Libs had it set at before they lost control. And whatever happen to all the Cons complaining about the GST in general? Why cut it to 5% when you were whining that it should be scrapped altogether?

    Give it 6 more months - the country will realize they were better off under Liberal rule, and will return the country to that status.
  29. Neil Garret from Canada writes: What about incomes above $100K? Are there any tax cust there?
  30. Stan L from Canada writes: John silverman....stop spewing nonsense, why in this very paper a poll revealed that 75% of respondants preferred an income tax cut to the GST...just becuase you want a GST cut doens't mean we will all fall for the pandering.
  31. Pax Canadada from Canada writes: It is important for Canadian economic future to pay off debt. Pay off the national debt. If you lower taxes it in effect frees more money for people to spend and get taxed on. In other words a tax cut is like giving someone a hammer to hit himself with. We should be convincing Canadians to abstain from useless consumption and move towards fiscal responsibility. Our government too.
  32. Calvin harrington from Canada writes: Old Jimmy almost destroyed Ontario, he is well on his way putting Canada in the same ecomonical loser boat as th USA, typical Republician, sorry Conservative. Spend, Spend, and give the tax payers a few crumbs, and make sure your Defence Contract Pals on both sides of the Border get fatter and richer.
  33. billy bob from Timmins, Canada writes: So in about 3 years many trusts will stop paying or for all intents and purposes stop making payouts but at least we will pay less tax on them.So if you are making 100 dollars a month now and paying today's rate of tax but in a few years you are making 10 dollars a month because of the trust changes but paying tax at a lower rate somehow that will all even out? I don't think so!
  34. The Wet One from Edmonchuk, Canada writes: I think that Grant has the rights of it.

    The reversal of the 0.5% increase to the lowest bracket isn't much.

    As well, raising the exemption amount doesn't do a whole lot either.

    I would have preferred to see every bracket moved upwards by a few thousand bucks.

    The GST cut is something, but not the best economic decision. However, the Tories are trying to keep at least some of their promises (unlike say, taxes on Income Trusts).

    Ah well. In the game of baseball, I think I'd rate this tax cut a walk or a single. It's no double, triple, in-field homer, home run or grand slam.

    I suppose I ought not be surprised. Governments of any stripe think they know how to spend my money better than I do.

    Sigh...

    The Wet One
  35. derry decter from Canada writes: once again ther conseravtives offer up proof that they are too stupid to run the finances of this country ...this is a waste ,as virtually every economist in this country has been telling us ,of an opprutunity to help business cope with the high cdn dollar and reduce the strain on taxpayers.
    I can only hope that the liberals will have enough intestinal fortitude to vote out this goverment...it seems to be on the wrong side of every issue for me .afghanistan the economy ,tax fairness, the enviroment the list is endless
  36. R. Carriere from Maritimes, Canada writes:

    HOME RUN!

    To all those who bicker here and disagree, I would advise you to call and e-mail your favourite LPC politician and have this voted down tomorrow! Here, I'll make it easy for you- Call the leader. Go ahead!

    Stephane Dion: Dion.S@parl.gc.ca
    (514) 335-6655
    (613) 996-5789
    .
  37. Reefer Sutherland from The Big Smoke, Canada writes: Why the hell are we cutting consumption taxes???? All progressive countries are moving towards consumption tax and reducing income taxes!!!!! I'm happy to take the 0.5% reduction in income tax, but why must the Cons be so stubborn and not LISTEN TO WHAT 20 TOP ECONOMISTS ARE SAYING!!!!!

    Harper would be a good leader if he would just listen to other opinions and used the best ones. This is the one thing standing between him and his cherished majority.
  38. Alistair McLaughlin from Ottawa, Canada writes: You see Bill Johnson, I told you. The whining has started already. The Liberals are upset because the only issue they had to complain about, the half-point income tax hike, has been rescinded. NOW they'll be stuck crying over a GST reduction and the subsequent harmonization. You can't blame them for being upset really. I mean, they must feel a little silly, given that A) Chretien/Martin promised to eliminate the GST, and B) Failing that, they attempted harmonization, which only 3 provinces signed onto. I'd feel stupid too if I were a Liberal right now. So let's try and have some understanding and compassion. They're going through a difficult time right now.
  39. A B from Calgary Area, Canada writes: These Harpler CONS are itching for an election.... electioneering at it's worst. Buying votes with your own money.
  40. Albin Forone from Toronto, Canada writes: I am measurably poorer this year as a result of the Tory preference for GST cuts over income tax cuts, and panic-stricken decision to impose badly structured taxes on income trusts. Full disclosure, I didn't and wouldn't vote Tory, anyway. Today's announcement seems to have the characteristics of Tory financial policy: quick politically-motivated decisions, avoid economists, avoid Parliament, pander to the 'swing vote' of working high school grads who would like a little more money every month, but don't save, invest or do their own taxes.
  41. art in calgary from Calgary, Canada writes: Carl C. from Montreal, time to change your provincial government!
    Oh yeah, the PQ are worse, and the ADQ-who?

    Bet Ontario riases it's PST before P.Q.
  42. Vern McPherson from writes: He just said the COns govt was like the North Star !! LOL A bright light !!

    WOW !!!

    I guess the astrologer in harper's office is weilding her power !!!
  43. ed fehr from Canada writes: I'M BUYING A NEW CAR IN JANUARY SAVING $500.00, THANKS MR. FLAHERTY.
  44. Matt Stiles from Santiago de Chile, Canada writes: Why don't we eliminate the income tax altogether along with the thousands of beaurocrats it takes to audit, force collection, and do whatever else they do? Boost the consumption tax of everything to 15% (not favouring any industry over another). This way people choose how much taxes they pay and how much government revenue is. If they're rich, they'll spend. If not, they'll save. Simple.

    But I suppose that doesn't fit within the communist manifesto. Yeah, that's right, communists. ALL of them. Conservatives, Liberals, Bloq, NDP. Commies. Dirty, discusting, dispicable Pinkos.

    mises.org - Give me liberty and get government out of my life!
  45. R L from Calgary, Canada writes: More dumb slogans.

    'Like the North Star'......... what is with these ridiculous catchphrase slogans by the cons?

    'New Government (tm)', 'Open & Accountable', etc. they just keep repeating these things and expect it to enter into the Canadian subconscious.
  46. Alexander The Great from Canada writes: Alistair McLaughlin from Ottawa, Canada writes: On the anniversary of the 'income trust debacle?' Geez, and I thought Scott Brisson's income trust leak and subsequent RCMP investigation happened in the winter almost two years ago; not last October.

    weren't you Cons claiming it was Goodale???...your own conservative MPs won't repeat that in public lest they get sued for there despicable lies...but I guess the internet is a safe haven for this kind of crap.
  47. Kin Lo from Canada writes: The lack of any meaningful income tax cut is worrying. Their own projections show that in 5 years, personal income taxes will rise from 46% to 52% of federal government revenues. Not only is high income tax bad for productivity and competitiveness, increasing reliance on a single revenue source increases the risk to government.
  48. klmklm klmklm from Toroonto, Canada writes: I dont care...GST PI tax...just give some back!

    Mayor-tax-a-lot Miller...hands off
  49. Kothar Rumbleg from Canada writes: 3 rounds of tax cuts. Excellent! See this is how a government should work. I say give this team a majority and then see where things go. At least they keep their election priorities, unlike liberals who go back on it and tax you when they say they wouldn't! Keep up the good work.
  50. Uncle Fester from Canada writes: 60 billion in overall tax cuts in over 5 years. I guess Flaherty must be pretty confident in the economy. According to my math that will leave us only with a 3 or so billion surplus each year to put against the debt. I guess he must be expecting the corporate tax cuts to really heat things up. Good news for the working poor, I wonder how Layton will find a negative spin on this one?
  51. Alexander The Great from Canada writes: Kothar Rumbleg from Canada writes: 3 rounds of tax cuts. Excellent! See this is how a government should work. I say give this team a majority and then see where things go. At least they keep their election priorities, unlike liberals who go back on it and tax you when they say they wouldn't! Keep up the good work.

    Yes indeed...make stupid promises and then keep them, that's what we need more of.
  52. b mac from Canada writes: Any party that is opposed to this budget or mini budget is just anti Canadian. These tax cuts benefit everyone. Canadians have waited decades, or more, for tax cut action like this. 3 Cheers to Mr Flaherty.
  53. campbell atkinson from victoria bc, Canada writes: HOWEVER, SENIORS LIVING ONOLD-AGESECURITY PLUS SUPPLEMENT GAIN NOTHING.. iS THIS DUETONEW MODERNCARING CONSERVATIVES?
  54. jeff mactavish from Canada writes: It sure must suck to be a Liberal today!
  55. Wir sind das Volk from Toronto, Canada writes: I wonder how the Premier of Taxtario will react to this? Think he'll match the increase in the basic income exemption to match the feds? If he truly cares so much about poverty, he might question the wisdom of taxing income that is needed just to survive (and using it to give rich people free health care). If he increases the PST, I'm moving.
  56. John Leyland from Vancouver, Canada writes: Ahhh, ignorance is bliss. For those of you applauding the GST cut, you failed both Economics 101 and math! How much do you have to spend to get any real savings from a GST cut of 1% or 2%. It's purely a political move and not a sound economic one i.e. cut the visible tax and a typical Conservative move i.e. don't do the right thing!

    The GST tax is a consumption tax. Those who consume and can afford to consume more - pay more, those who don't, don't. Reducing income taxes would provide Canadians the ability to either spend or save more...their choice.

    If they were to do the right thing it would be to raise the GST to 10% and cut income taxes by 5% across the board as well as corporate taxes.
  57. Harvey Mushman from cambridge, Canada writes: To those who claim Harper 'raised' taxes from 15 to 15.5%...did he also 'raise' the GST from zero to 7%? You guys need to learn the difference between a Liberal promise from reality. Martin promised 15%...but never delivered...just like Chretien promised no GST...and never delivered. On another note...the ball is now is Dion's court isn't it? No doubt as to what he'll do though is there? Principles or pensions?...Principles or pensions?...ah...I think I'll take pensions sil vous plai.
  58. Mike YouHow from United States writes: Nice... 1% off!! Here's an idea... instead take that 5.5 Billion and put it back into what we owe to reduce the debt. Call me crazy... but there will always technically be a fiscal imbalance until our national debt is repayed.
  59. Stan L from Canada writes: Wow...amazing comments, votes are a lot cheaper to buy than I thought.
  60. Alexander The Great from Canada writes: b mac from Canada writes: Any party that is opposed to this budget or mini budget is just anti Canadian. These tax cuts benefit everyone. Canadians have waited decades, or more, for tax cut action like this. 3 Cheers to Mr Flaherty.

    Idiots like you are the target audience
  61. John McMortimer-Boyles from An Undisclosed Underground Location Safe From Nuclear Attack, Canada writes: Toronto Dominion chief economist Dwight Drummond said “The only way I can benefit from a cut (to) the GST is if I consume more.'

    I guess this guy can't be consuming anything. Everything else remaining unchanged, everybody who spends money on goods and services where GST is charged should come out a winner because they pay less GST. That's a bit more money in the pocket to save or to spend on other goods and services.

    Perhpas the G&M and (for that matter the TD Bank) should get themselves some better economists.
  62. James Tod from Vancouver, Canada writes: These cuts are designed to do two things: 1) Neutralize the income trust tax debacle of one year ago and 2) give them a headline. Economically speaking reductions to income taxes are far better than reductions to consumption taxes. Oooh, I get back the half a percentage point in income taxes they added the last time around. Tried and true Conservative philosphy. The Liberals need to get their house in order and bring down this government at the earliest opportunity, and if Canada votes in a Conservative majority, we will deserve what we get.
  63. Vern McPherson from writes: Nothing for cities and nothing for provinces, health care educaton and all that stuff...........................

    Just wait until the provinces fill the GST vacuum by raising sales tax or some other tax as they are now forced to do.

    Downloading works at the federal level too.

    And why stimulate an overheated economy with corporate tax cuts ? We don't have the workers we need now ? Who is going to invest when there are so few human resources ???
  64. Bill Murtagh from Toronto, Canada writes: Hmm, the last time I looked we had millions of people living in poverty; huge, anticipated costs involving both an ageing population and infrastructure; as well as a mind-numbing national debt, and these people are lowering taxes. Very disappointing.
  65. B Todd from Canada writes: D. Drummond of the TD Bank best stick to providing advice to the TD Bank as he has just lost ALL credibility otherwise. Among other things he said ' The only way I can benefit from a cut (to) the GST is if I consume more...'. Will there not be a net benefit when one pays 5% instead of 5%? This individual is brain dead!
  66. E W from Canada writes: As far as im concerned this could be good for Ontario, if Mcsquinty raised the PST then it would just be like Harper and Flaherty giving money right to them, especially since Ontario probably contributes the most to the federal government. So instead of it being divided between all the provinces its been given to Ontario to be put into healthcare and roads...or just squander it like usual.
  67. Cup of Tea from National, Canada writes: .
    Clever (sneaky) bastads.

    They want to force (through the Harmonzation fund) the provinces that have not signed on to HST to do so.

    Funny thing is, each of these non-HST provinces has either a Liberal or NDP provincial government, and introducing the HST is really the kiss of death politically.

    How to lower taxes and remove your opponents all in one announcement. Sneaky sobs...
  68. James O'Keefe from Toronto, Canada writes: GST was introduced to pay off the debt. As I said in a debate prior to implementation, it's a good tax if it is used only for that and if it doesn't cost as much to administer as it brings in (zero net gain). Well it cost a damn lot to administer, and very little went to pay the debt. In fact deficit budgets soon became the flavour, making the GST just a cash grab, nothing done to stop the bloodletting. ---------- The Libs promised to quash it, which they quickly forgot about once elected (and still forget about in Opposition). But although Martin (thank goodness) brought balloon budgets under control, the GST went into the kitty and was used for everything but the debt. Now, some 25 years after implentation, the Cons have started paying down the debt. As the debt goes down, so too does the GST. Good show. And Big Red - don't bet on it, there are a lot of stupid people, esp in Toronto.
  69. William Jefferson Bly III from Canada writes: For all of you who keep asking why Harper cut the GST, it seems like the answer is pretty simple. The conservatives promised they would. Admittedly, they flat out lied (maybe that's a bit harsh) about the income trusts, but lying about one thing doesn't mean that you shouldn't try to keep the rest of your election promises. I know we all got used to Liberal rule where what a party said during the campaign really meant nothing after the election, but the conservatives are at least trying to stick to most of what they promised. [The real question is should they be trying to stick that closely to their platform when less than 40% of Canadians thought highly enough of it to vote for them.] Anyways, whether the GST cut is a good thing or not, kudos to the Reform, I mean Alliance, or whatever they are now for keeping their promise. One more note, there are several economists who argue that consumption taxes are actually regressive. As people earn higher incomes they begin to save more of their money and spend less. Any of the money they do not spend essentially becomes tax free money. Lower and Middle income earners pay a higher percentage of their total income to the consumption tax because they have to consume their entire income. Only high income earners are able to sheild large portions of their money from consumption taxes.
  70. Wheat Sheaf from Canada writes: Lowest taxes since Pearson? What was the public debt when Pearson was prime minister?
    The Harper Conservatives are proving as unimaginative as the Mike Harris PC's - tax cuts are the holy grail. The presence of Flaherty may explain this. What about paying down the debt or reinvesting the money to ensure we have a highly skilled labour force. Just a suggestion
  71. Expert Eel from Canada writes: still doesn't make up for the income trust debacle. I know a director at Bell that had to fire 5 Project Managers and their teams last week because of this.
  72. John McMortimer-Boyles from An Undisclosed Underground Location Safe From Nuclear Attack, Canada writes: S S from Calgary, Canada wrote: 'Why does this government think that reducing the GST is a good thing? The GST is a perfect kind of tax - it progressively taxes the population by hitting people who spend more.'

    I dunno about that logic. If it weren't for the GST credit and some necessities like food being GST expempt, the poor in this country would be dinged a bit harder by the GST. After all, if you are spending most of your money, and the purchases are being taxed GST, you are going to get dinged. Catch is, poorer people don't necessarily have a lot of money to save.

    Fact is, the big beneficiaries of a tax like the GST are the ones who can (and do) maximize their personal savings and reduce personal consumption. Money that isn't spent on goods and services can't be dinged with a consumption tax like GST.
  73. John G from Ottawa, Canada writes: 'The only way I can benefit from a cut (to) the GST is if I consume more.'

    Nonsense. You still have to spend money to live. Now you have to spend less than you did before.
  74. Mister Fartleberry from Toronto, Canada writes: This is just Conservative goofyness. Dedicate the 1% of GST to buying equipment to the 'armed' forces, social housing, northern development, transit, or just paying down debt. What's to be gained by cutting a progressive tax in a good economy?
  75. W M from Canada writes: This makes me ill. By choosing to cut the GST, rather than focusing entirely on corporate and personal income taxes, these guys have proven that they care more about politics than doing what is right for the country. At a time when the soaring dollar is kicking the cr@p out of Canadian companies that compete internationally, our government ought to be focusing 100% of its attention on taking measures that enhance competitive advantage for Canadian companies, not making it cheaper to buy products and services that come from abroad.
  76. Mrs. T from Canada writes: Campbell from Victoria: Old Age Security plus supplement is nothing? Give me that free money.
  77. P Martin from St. John's, NL, Canada writes: Figures. Another budget without any fiscal policy, smaller government or smart governance. Typical of Harper and his goons. As for him fulfilling a promise, it will be one of only a few he has kept. The big ones, on equalization, government, spending, income trusts, accountability, etc., are broken.
  78. R. Carriere from Maritimes, Canada writes:

    One uninformed poster states, 'Nothing for cities and nothing for provinces, health care educaton and all that stuff...........................

    At this time, there have been record transfers back to the Provinces when Flaherty solved the fiscal imbalance that even the BQ doesn't talk about anymore nor does McGuinty.

    That said, why let facts get in the way of potential Liberal spin and the spewing of false info!

    Once agiain, for all the whiners, please call you leader and have him vote this down tomorrow:

    Stephane Dion: Dion.S@parl.gc.ca
    (514) 335-6655
    (613) 996-5789

    .
  79. M Warren from Canada writes: Good point, Vern. All this does is force the cities and provinces to do what they must to maintain themselves. There's not a lot of choice for them.
  80. Wir sind das Volk from Toronto, Canada writes: Paying off every dollar of the national debt would be even stupider than reducung the GST to zero. Canada already has the lowest debt to GDP ratio in the G7. The opportunity cost of using surplus dollars to pay pff bond holders (many of whom are outside Canada) would be huge. Instead we should 'invest' in future growth through infrastructure, innovation, strategic tax cuts and other measures. this is the basic concept of leverage. Even if we didn't apply one single additional dollar to the debt over the next ten years the debt to GDP ratio would drop in half (to about 17%).
  81. Randal Oulton from Canada writes: intro headline on Globe home page:

    >> on eve of Halloween income trust debacle anniversary

    Whatever one thinks of this issue, it's hard not to realize that clearly any attempt to keep editorial separate from reporting is a long-gone practice at the Globe, reducing them to tabloid quality.
  82. paul sheridan from Hawkestone, ON, Canada writes: I'm sure Mr. Mulroney will wade in and claim this brilliant PC windfall was in large part due to his tenure.
  83. Vern McPherson from writes: So 2 years later the COns restore the liberal tax cut to 15 % for low income citizens ?

    After increasing it as the first thing they did in Feb 06 ? ?

    Big deal.
  84. Derek Holtom from Swan River (who's hiding behind a fake name today?), Canada writes: Expert Eel from Canada writes: still doesn't make up for the income trust debacle. I know a director at Bell that had to fire 5 Project Managers and their teams last week because of this.

    and with the handle expert eel, of course, everyone should believe you.
    can't wait for my refund this year!
  85. Alpha Sigma from Canada writes: Neil Garret from Canada writes: What about incomes above $100K? Are there any tax cust there?

    Neil - Incomes above $100K a year do not deserve tax breaks. If you make a lot of money then you deserve to pay a lot of tax to support social programs and the people who have not had the initiative or drive to work as hard as you. It's only fair that you work 60 hours a week, work in a stressfull environment, and be on call so you can afford to provide a nice standard of living to the people who have 'basic' responsibilities at their jobs. Afterall it is a proven fact that the more money you make, the more you utilize our roads and healthcare system. Sincerely, NDP supporters.
  86. carlos g from Vancouver, Canada writes: The Liberals promised to reduce the GST by 7 points. They actually reduced it by 0 points.

    The Conservatives promised to reduce the GST by 2 points. They actually reduced it by 2 points.

    That's the difference between the two, you can actually trust the Tories to follow through on what they say they will do
  87. W M from Canada writes: John McMortimer-Boyles writes: Toronto Dominion chief economist Dwight Drummond said “The only way I can benefit from a cut (to) the GST is if I consume more.' --- I guess this guy can't be consuming anything. Everything else remaining unchanged, everybody who spends money on goods and services where GST is charged should come out a winner because they pay less GST. That's a bit more money in the pocket to save or to spend on other goods and services. Perhpas the G&M and (for that matter the TD Bank) should get themselves some better economists. .'

    John, I can't tell whether you are missing the important point he is making intentionally, or because you don't understand it. It is that a GST cut helps foreign companies doing business in Canada, just as much as it helps Canadian companies, whereas corporate and payroll tax cuts help our companies and not our competitors. Call me naive, but I expect our government to act in the interest of Canadian companies, not the ones we compete against. Even from the vantage point of your bomb proof bunker, I would have hoped you would see the benefits of putting our own companies and jobs, first.
  88. Art Vandelai from Burlington, Canada writes: I forsee a huge increase in retail sales figures in April/May 2008.

    Every Canadian who makes $9,600 or more will see an extra $100 on their tax return from the increased personal exemption retroactive to 2007.

    Someone earning $40,000 will see an extra $152 on their tax return from the lowering of the tax rate which is also retroactive.
  89. Mrs. T from Canada writes: Commenting on some posters here scoffing at a 1% or 2% cut to the GST. Calling it a consumption tax is correct, but it is not only applied to luxury goods. It is also on other necessary goods, such as tampons, pads, diapers, dog food to name a few. So, for me and my family, the few cents or dollars I save each week mean it stays in MY bank account. No problem with that. Oh, and definitely sign me up for the income splitting for familiies.
  90. Ka Put from Lotusland, Canada writes: I suspect the lowering of the GST has more to do with the harmonizing of GST with Provincial Sales Taxes, since the combined taxes will cover many more items and be a windfall for the provinces.
    For example in British Columbia, the combined tax on gasoline would be 12 percent; BC will bring in an extra 7% on top of the 21.5 cents per litre already charged.
    Then there is that extra tax you will pay on your coffee and donut and newspaper and stamps and car repairs and ...........................................
  91. Jermo Sapiens from Canada writes: Excellent job from Minister Flaherty. Canadians are grateful. Liberals are bitter. This is just perfect.

    On the other hand maybe Dion will vote this down and fight an election over tax cuts. That would be even sweeter.
  92. Mark S Noel from Yellowknife, Canada writes: Finally some real tax relief I can use. The 1% tax cut in the GST will save me more than the income tax reductions but hey, I'll take them too.
  93. Not the Alliance from In my opinion, The Harper Gov't is Incompetent., Canada writes: R. Carriere from Maritimes, Canada writes: 'At this time, there have been record transfers back to the Provinces when Flaherty solved the fiscal imbalance that even the BQ doesn't talk about anymore nor does McGuinty.'

    R. Carriere - I realize you're enthused about this update. But 'solved the fiscal imbalance'? That's a bit of a stretch isn't it? How has the fiscal imbalance been solved... by transfers that seem to be under the control and at the whim of the Gov't?
  94. Alyssa Watson from Canada writes: Does jack layton ever have anything good to say? Opposition party or not , does he ever?
  95. F Yue from Abbotsford, Canada writes: Happy about the tax cuts- great news-

    However, incenting the lazy underachievers of the country by cutting their fair share of the tax burden doesn't sit well with me- But as they will always be underachievers and lazy, I suppose I will still need to support their sorry a**es one way or another

    Power to the poor!!
  96. snaglepussed in Ottawa from Canada writes: Now the speculation ends about what the Conservatives would do with that huge surplus. I and many Canadians wanted to know and now we do. The opposition would be nuts to vote his down tomorrow. If they do, we'll have a pre-Christmas election. Guess who is the most prepared for this eventuality? My answer is Harper and the majority of Canadians. The Bloc and the NDP are opposed. Where is Dion and his Liberals? Probably preparing a statement that Canadians DO NOT WANT AN ELECTION so we will support the Conservatives. Ha! Ha!
  97. Michael Jahonneson from Vancouver, Canada writes: W M from Canada writes: This makes me ill. By choosing to cut the GST, rather than focusing entirely on corporate and personal income taxes, these guys have proven that they care more about politics than doing what is right for the country.

    -----

    Accoding to the document I read corporate taxes will be the lowest in the industrialized world by 2012.
  98. RJ Cruz from Canada writes: Flaherty was having too much fun when he snidely giggle when he says 'assuming it pass the ways and means' hehehe. What he is expecting or hoping for? That it won't pass so that they can go to election? They are too manipulative, imagine going to election and they can claim too bad you did not get the retroactive tax refund because the opposition voted against it.

    They cut income tax back to 15% which is what the Liberal cut it to before they raised it and they proclaim it as if they have invented tax cut. Why do they have to do this now and not wait until the next budget? This government is too manipulative and like to play games.
  99. Alistair McLaughlin from Ottawa, Canada writes: • The corporate income tax will fall by one percentage point for 2008, and will drop again until it reaches 15 per cent in 2012. Today it stands at 22 per cent.

    Dion spent the last three weeks running around saying he'd cut corporate tax rates because that would 'stimulate jobs'. What's he going to say now? HAHAHHAHAHA! One thing missing from this mini-budget is a national drug plan. Such a plan is vital, because we're going to see a massive increase in the number of Liberals on antidepressents.
  100. Jack Robinson from London, Canada writes: Well ain't it swell that Steely Steve's shell-game government has 'discovered' a humongous surplus worthy of sharing with the muddled masses... on the cusp of a likely greased-wheel, cynical Silence of the Lambchops election.

    Letz just forget that the Man Who Would Be King has failed to address our quantum commitment to managing Climate Change; has done squat to repair sagging provincial and urban infrastructure; has committed our under-funded military to unachievable objectives ranging from Arduous to the shrinking, highly-contested Arctic; taken no substantive measures as to resuscitating our national health care system and... gee, I'm getting a migraine... hijacked Parliament to a state of dysfunction unseen in Canadian history.

    But hey, hey... give us mugwhumps a few hundred bucks in Canadian trash money so's we can border-shop 'till we plop, take the GST down $40 on a Taiwan-made LCD TV and buy Viagra on-line at a discount... I'll pucker up as a Neo-Conned Johnny Canuck damned well oughtta!!!
  101. Stan L from Canada writes: But Mrs. T......you are OK with more of your paychecque staying int he hands of the government and satisfied with the government allowing you to have the reward of a few pennies off a few household items when you need to buy them.......you are a cheap date, I hope you don't do the books in your household.
  102. Harvey Mushman from cambridge, Canada writes: Vern McPherson from writes: 'So 2 years later the COns restore the liberal tax cut to 15 % for low income citizens ?' What Liberal tax cut Vern?
  103. Vern McPherson from writes: R. Carriere from Maritimes, Canada writes:
    One uninformed poster states, 'Nothing for cities and nothing for provinces, health care educaton and all that stuff...........................
    At this time, there have been record transfers back to the Provinces when Flaherty solved the fiscal imbalance that even the BQ doesn't talk about anymore nor does McGuinty.

    --------------------------------------------

    One poster ? LOL !!

    carrierre this province, Ontario, WILL be forced to raise taxes whether it be in cities or the province itself to make up for the 60 billion given to business through GST cuts. And if you don't think this is cheap Mike Harris style downloading, ...... well I pity you.
  104. b mac from Canada writes: I saw Taliban Jack & Dion complaining on TV about the tax cuts for his constituants & businesses. It reminded me of an old saying. 'Once you learn to lie to yourself, you can lie to anyone.'
  105. F Yue from Abbotsford, Canada writes: Hey Jack Robinson- you're a sour man who'll never be happy whatever you get. All of these issues you've said the gov't should focus on aren't easy fixes that you will see in the next weeks while you sit in front of your tv drinking beer-

    The gov't has given you more of YOUR money back in YOUR pocket- say thanks and then shut the h*ll up .
  106. Michael Sharp from Victoria BC, Canada writes:

    'On the Eve of the Income Trust Debacle?'

    Tell that to the corporations that were going to stop paying corporate tax and convert to Income Trusts as a tax-dodge.

    Income Trust Debacle indeed.

    The Conservatives saw a nightmare scenario about to unfold with distastrous consequences for middle-class taxpayers and nipped it in the bud.

    Hardly a debacle.

    Swift and decisive decison making is more likely.

    HORRIBLE, HORRIBLE GLOBE BIAS.
    LIBERAL GLOBE GTA BIAS.

    SHAMEFUL.
  107. Karin Pasnak from North Vancouver, Canada writes: Alyssa Watson,
    Christmas came early? ROFL
    Yeah if you spend a $100 you can save a whole dollar and that dollar is yours to begin with.
  108. K. B. from Canada writes: Vern, displaying his brilliance: 'And why stimulate an overheated economy with corporate tax cuts ? We don't have the workers we need now ? Who is going to invest when there are so few human resources ???'

    Umm, Vern, do you not think that if there are so few human resources, that perhaps companies should invest in new technology and machinery such that one worker may produce more per hour than they did before? That would mean the automotive factories buying primarily U.S.-built machinery to enhance their productivity while the dollar is at $1.05 usd, so that we're all the more competitive if and when the dollar recedes to $0.85 usd as one group thinks it will (article in G&M).

    And I love how you start your post asking for more spending! Of course, if they did that, you'd drone on about how this is the biggest spending Cdn gov't of all time! You have no shame, no consistency, and no balance.
  109. Michael Jahonneson from Vancouver, Canada writes: Actually, if you disagree with the tax cuts, you can still send the money to Revenue Canada as a gift.
  110. J Brown from Toronto, Canada writes: I think all you GST cut bashers should remember, Harper was elected on the premise he would cut the GST to 5%.......he's only following along with his promise.......something many politicians forget as soon as they are elected......had he not done it, you same people would have roasted him for not doing so.....
  111. Roop Misir from Toronto, Canada writes: Looks like there's good news here.

    If there's ever a time Mr. Harper can win the election, is it now?
  112. Art Vandelai from Burlington, Canada writes: RJ Cruz...good point. I expect that the CPC is planning on introducing some absolutely unpalatable (by the opposition) legislation, such as their repudiation of Kyoto, before these tax cuts come into effect, so that they can use 'cancelling our tax cuts' as ammunition against the Libs in an election.

    I wouldn't put it past 'em. The Cons have so far shown to be far more interested in gaining the power of a majority than they are in providing leadership for Canada.
  113. Carl Baldin from Canada writes: This is positive news, yet many of these comments are negative. Why do many Canadians still like to bash Harper and his people? Are they really that bad!? What are our options....Dion....Layton!?
    They are tackling many issue important to Canadians and while they are not by any means a perfect government, they are doing well & have the guts to make some tough decisions (i.e. the Income Trust issue). Perhaps Canadians should try to be more pragmatic and less negative, then Canada will be even a better place.
  114. Hosannah Q. from Canada writes:
    Jermo Sapiens writes: 'On the other hand maybe Dion will vote this down and fight an election over tax cuts.'

    Harper will quickly run out of 'popular' moves on which to base a confidence vote.

    Very, very, very quickly.
  115. Art Vandelai from Burlington, Canada writes: Michael Johanssen...or donate to the political party that you prefer to support (and you get a huge tax credit for doing so)...
  116. Alistair McLaughlin from Ottawa, Canada writes: Well Vern, why doens't Ontario increase its PST then? If they need the money more than they need the tax cut, that's what they should do. Seems like you want the federal government to raise the revenue, then give it to province and the city so they can take credit for spending it. Harper already increased transfers to the provinces. If Ontarian's decide they're willing to pay the extr 1%, McGuinty should go for it. I understand your frustration. As a conservative, I spent many long years in the political wilderness. I know what if feels like to see your party so far from power that there just doesn't seem to be any light at the end of the tunnel. The good news is, it eventually does end. The Liberals will be back in power....perhaps in less than a decade. Hope that cheers you up. :)
  117. Stan L from Canada writes: F Yue.....just a minute Jack Robinson has brought up good points, Harper made a LOT of substantial promises including health care reduction times, the environment, defense and Afghanistan to name but a few and he has delivered very little excpet these little trifles which keep the illertati distracted....they have not given us more of my money back (a funny concept since it is MY money in the first place), they have not done anything sustantial or revolutionary. It is not even a plan but a series of announcements concerned with the short term vote than any substantive thought....but since Flaherty messed up Ontario...why not let the rest of you see what he could REALLY do to mess things up. Enjpoy your little trifles from Flaherty...trust me you'll pay later.
  118. John Smith from Vancouver, Canada writes: We'll take the cut even though encouraging consumption is not the best way to lower taxes. However, if Harper thinks it'll get him an extra vote from me, he's smoking something.

    When they finally con enough people to give them the majority they're craving we'll see his true colours come out and then we'll all be very sorry.
  119. bob saunders from Belleville, Canada writes: Vern McPherson from writes: So 2 years later the COns restore the liberal tax cut to 15 % for low income citizens ?

    After increasing it as the first thing they did in Feb 06 ? ?------------------ Perhaps my memory fails me, but I believe this was a promise that Martin made if reelected, it never really happened.