Harper Government Prepares To Hike Payroll Tax

Because that's what "overcollecting" the payroll tax amounts to. Certainly the effect is identical to a tax hike:

“If they're looking at reducing the deficit by increasing the premiums...it will slow down the hiring process,” Mr. [Jason] Myers [president of Canadian Manufacturers & Exporters] said.

In fact, it appears that Jim Flaherty will rely almost entirely on an increase in EI premiums to bring the country out of its current deficit position. That's it. There's nothing else in Thursdays economic update that could be accurately described as an element in some deficit reduction plan.

Interesting to see the NDP response to this going forward. Jack Layton seems willing to wear the purple sweater, to "make parliament work", as they say, in exchange for some tiny little political bone related to changes in the EI system. An increase to the payroll tax was precisely not what he had in mind.

More NDP Weakness

From Tory whip Jay Hill:

For the second time in a year, Mr. Ignatieff has thrown Jack Layton a curve ball. First Mr. Ignatieff, who had signed-up for a Liberal-NDP-Bloc coalition just days after Canadians returned our Conservative Government to power with a stronger mandate, reneged on the deal. Now, Mr. Ignatieff has called Mr. Layton’s election bluff.

Back in June when the Liberals were ducking Parliamentary votes to avoid an election they didn’t have the money to fight, Mr. Layton could boast he would never support the Conservative Government. He even bragged that the NDP voted against us in 79 consecutive confidence motions in the House.

In August following a meeting with Prime Minister Stephen Harper, a defiant Mr. Layton declared, “The NDP would be the least likely of the political parties to support the Conservatives in office.”

Yet when Mr. Ignatieff suddenly put the election trigger in his hands in early September, Mr. Layton, who is typically the first politician to throw himself in front of a television camera, went into hiding for two days! He sent his deputy leader, Thomas Muclair to deliver an olive branch to our Conservative government, suggesting the NDP would work with us on a case-by-case basis.

On one hand, the NDP are showing poorly in the polls and in their bank balance so Mr. Layton is hedging his bets by now pretending to be conciliatory and cooperative in Parliament. On the other hand, he doesn’t want to waste a rare opportunity for himself and the NDP to be relevant in Canadian politics. So he’s also trying to play the role of ‘power-broker’ by echoing Mr. Ignatieff’s election threats.

Meanwhile, Western Arctic NDP MP Dennis Bevington is willing to don the NDP/CPoC purple sweater of alliance:

While Harper wrote off the idea of working with the NDP shortly after Ignatieff made his comments, Bevington said a coalition was "plausible."

"We didn't support them in their original budget - the Liberals did. The arrangement was between the Liberals and the Conservatives. The Liberals have abandoned that arrangement," he said. "That doesn't mean that we have to have an election now. Prime Minister Harper needs to give a little room to some of the things that we see, or the Bloc see, that are correct. Those are things that he has to do."

If Harper is willing to make compromises, his government will survive, Bevington said.

"If he simply says, 'Well, I'm going to do what I want to do,' then it will be a very difficult situation."

Ah, but difficult for whom, Mr. Bevington, difficult for whom?