Tuesday, January 27, 2009

Conservative Budget Fails to Help People in Need

Today's federal budget gives the appearance that the government has taken its head out of the sand, but it fails to address major issues.

Firstly, the requirement for provinces to match funds means that many of the announcements are smoke and mirrors, as the money won't be spent.

Secondly, almost all of the tax breaks given to individuals are done by raising the income thresholds at which people are no longer eligible for them. Is this a joke? The people in this country who need help aren't the ones whose incomes are pushing against upper thresholds for tax break eligibility! They're the ones whose incomes are pushing at another threshold... the poverty line.

The Home Renovation Tax Credit? Give me a break. The Conservative government is completely out of touch with the world if they think that people who've lost their jobs or have precarious employment are going to be spending $1000-$10,000 on home renovations in order to claim this tax credit.

Similarly, with the income tax breaks, the government fails to help those most in need. Sure, they raised the base tax-free amount by a few hundred dollars. But they also raised the thresholds for moving into higher tax brackets. The first threshold, fine, but the second? Leave it where it is, and increase the basic tax-free amount a bit more. People working part-time at or near minimum wage need a tax break a lot more than people whose income is equal to three or four full-time minimum wage jobs.

I was also disappointed to see precious little for the environment, or to encourage investment in alternative energy and green jobs. Here's where a tax credit for individuals buying renewable energy from sources such as BullfrogPower would have been good. It would have stimulated a market-driven shift to green energy.

Another missed opportunity... the Conservatives could have extended the Children's Fitness Tax Credit to all Canadians regardless of age. The payoff in health care savings would dwarf the cost of the credit. Physical activity is also an essential tool in warding off stress and depression, so making it more cost effective for Canadians to participate in physical fitness programs would have been a great idea in tough economic times.

Employment Insurance reforms are where the Conservatives again failed us. They could have reduced the number of hours necessary to qualify (currently 700), which would have reflected the reality that many jobs are part-time and largely temporary in nature. They could have increased benefits from the 55% (maximum $447/week, from which taxes are deducted) EI currently pays, or increased the amount which workers are allowed to earn (currently 25% of their EI payment or $50, whichever is greater) before their EI benefit is clawed back, which effectively penalizes workers for trying to supplement their income with part-time work.

The hours required to qualify for EI benefits need to be reduced, the benefit rate needs to be raised to 60%, and the clawback threshold raised to 100%. This will relieve the financial stress placed on unemployed workers who can't pay their bills while looking for work. The Employment Insurance fund is running a huge surplus, so why won't the government return that money to workers?

Given that this budget is (in appearance, at least) quite different from what the government had been planning prior to proroguing Parliament, it will require a great deal of courage for the Liberals to defeat it and press forward with their plans for a Liberal-NDP coalition government. I hope they do, though, because this country needs a budget that actually helps people in need, instead of people who are already well-off.

The Conservatives have chosen to ignore Canadians who have lost their jobs, and instead decided to give tax breaks to people who have enough discretionary income that they're contemplating $10,000 home renovations. That's neither leadership nor responsible government.

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