Federal Finance Minister Jim Flaherty set some priorities today:
The federal finance minister says Ottawa won't be able to address all its election promises in its first budget. But...the Conservatives will slash the GST by one per cent "immediately."
Let's get a couple of things clear. Imposing the GST initially was a terrible idea and the Mulroney's Conservatives paid for it dearly. But cutting it, by one per cent, is another terrible idea, especially if it results in income tax hikes on certain groups of Canadians.
Because, to put it bluntly, that penny per dollar will be long gone before it gets to Joe or Jane Canada. Everybody along the chain from manufacturer to wholesaler to retailer is going to use the opportunity to hike fees, knowing that this hike will be concealed and cancelled by the cut.
Generally speaking, cuts to consumption taxes never make it to the consumer. And of course the Harper government knows this. They are eliminating income tax breaks for poor Canadians and sending the cash freed up to Corporate Canada. Robin Hood in reverse, but by more devious means.
Sneaky, but what will the Average Canadian say when taxes are cut and they notice no difference?
The story is here: