To the Editor:
One of the late Jim Flaherty's best features as Finance Minister was his willingness to push-back against Stephen Harper's excessive partisanship. Income Splitting was a case in point.
Mr. Harper trotted it out as a hypothetical campaign promise during the 2011 election, to be honoured at some future date after the federal books had been balanced. Whether Mr. Flaherty disliked the idea from the beginning is hard to tell, but in his latter days in the Finance department he didn't mince words.
He openly challenged Income Splitting as too costly and distinctly unfair because it would benefit "some parts of the Canadian population a lot and other parts of the Canadian population not at all." Mr. Flaherty pushed back.
It is crucial for Finance Ministers to be able to do that. They are among the few who can speak truth to all-too-powerful Prime Ministers. Their authority in Finance can only be used sparingly, but when it's needed it should be exercised.
In his final telling criticisms of Income Splitting, Mr. Flaherty opened the door to principled reconsideration. But as soon as he was gone, Stephen Harper slammed that door - right in Joe Oliver's face. And without a peep of protest from the new Minister. He is there, apparently, just to do Mr. Harper's bidding.
Income Splitting will cost the federal treasury about $2-billion every year. That's a lot of money. The economy remains shaky. Revenues are uncertain, as tumbling oil prices amply demonstrate. The Parliamentary Budget Officer says a "tax expenditure" of this magnitude risks re-creating deficits. That's no doubt one of the things Jim Flaherty worried about.
He would also know only too well that to make room for that $2-billion per year, he imposed hard budget cuts in such areas as services to returning soldiers and veterans, maritime search and rescue, forensic labs, immigration offices, trade offices, emergency preparedness, National Parks, the Census, employment insurance, social benefit appeals, environmental protection, Aboriginal education, public infrastructure ... and more. Mr. Flaherty would not want his "savings" to be squandered on a bad idea.
Income Splitting will help fewer than 15% of Canadian households - more than 85% get left out. Single moms and dads, parents with similar incomes within the same tax bracket, those on low incomes, those without children or whose kids are at the expensive post-secondary level - get nothing from Income Splitting. And among those few who will benefit, the biggest winners are the most wealthy. That's what Jim Flaherty warned against, and it hasn't been fixed.
Perhaps worst of all, Income Splitting misses the target entirely on Canada's most pressing economic problem and that's the lack of substantial, sustained economic growth. By the Conservatives' own figures, after the implementation of this misguided scheme, the Canadian economy will slow down. They are projecting a shrinking economic growth rate in each of the next five years.
Surely it would be more effective and more prudent to invest now in the drivers of greater growth - like transformative public infrastructure, higher learning and skills, science and innovation - which would boost the economic prospects of all Canadians, while also reinforcing the fiscal integrity of all levels of government.
Ralph Goodale, Member of Parliament for Wascana
