Tuesday, October 20, 2015

New government in Canada; new fiscal policy

Canada's federal election unfolded last night with a decisive victory for the Liberal Party under the leadership of Justin Trudeau. Campaign promises include a much needed commitment to transparency, including budgetary "honesty" as outlined in the party's Fiscal Plan. Here are the main promises:

  • cancel child benefit cheques for millionaires, increase child benefits for the middle class & below 
  • increase the marginal tax rate on Canada’s 1%, cut taxes for the middle class
  • review tax expenditures, target tax loopholes that particularly benefit Canada’s 1%. 
  • be honest about the government of Canada’s fiscal position, base projections on Parliamentary Budget Officer report. 
  • run modest deficits for three years, invest in growth for the middle class.
  • offer a plan to balance the budget in 2019.
Here's the revenue picture: 

Hmm, I am not seeing any revenue from legalizing & taxing marjuana, suggest Canada take a page from Colorado on this point. I predict the revenue impact will be more than zero.

Will be fascinating to watch how the promises play out IRL.

1 comment:

  1. Legal(and technically illegal marijauana) is subject to GST/QST unless it is prescription(GST zero rated) so there should be some type of revenue bump. Also prostitution(under the guising of escorting I guess) is also already in the GST net too. I believe if you look on Backpage.com and other sites where this type of activity is advertised there is usually mention that GST is required to be charged.

    **In the early days of my anti FATCA advocacy I ran into someone who before they retired used to prepare tax returns for sex workers and "escorts" in Vancouver. And yes they can and do claim business expenses and GST input credits for clothing and other expenses they incur in the course of doing business.