Tuesday, March 4, 2008

Press Release - NDP candidate Rob Moir raises concern with Harper budget

3 MARCH 2008

Fundy Royal NDP Candidate and economics professor, Rob Moir, expresses concern with the third budget of Mr. Harper's minority government. After considering the budget for a few days, he finds little in the document that helps ordinary hard-working Canadians.

"There's a great deal of 'flash-in-the pan' about this budget," notes Moir, "but the picture is not at all focused. Numbers are bandied about in an attempt to confound the issue, but these are not numbers that help ordinary Canadians who work so hard for their paycheques."

Many speculate this muted budget was designed as a challenge to the Liberal government to call for a new election. Unwilling to proceed to the polls, Liberal MPs have been caught in a contradictory stance, simultaneously criticizing the budget yet arguing that it contains the essence of any Liberal budget.

NDP Leader Jack Layton points out, "For every one dollar the 2008 Harper budget allocates in new spending, it spends six dollars in corporate tax giveaways. Yet this budget fails to train a single doctor, make a single prescription drug more affordable or build a single unit of affordable housing."

Dr. Moir outlines some of the key components and omissions of Mr. Harper's 'Liberal-light' budget as it relates to the people of Fundy Royal, and New Brunswick as a whole.


The National Anti-Poverty Organization (NAPO) has denounced the budget noting that individuals earning $15,000 per year can expect $215 in reduced taxes in 2008-2009; while those earning $150,000 will pay $3,265 less in taxes.

"Mr. Harper has obviously forgotten our international committment to invest 0.7% of our gross national income toward the eradication of global poverty," says Moir. "We're talking 70¢ out of every $100. If Mr. Harper fails to see the humanity in this investment, then consider the returns from additional security and international goodwill."

A New Savings Plan

The budget offers Canadians the option contributing up to $5,000 annually in a registered savings account where interest, dividend, and capital gains income can grow tax-free.

"Let's look at the numbers," suggests Moir. "Suppose $5,000 is put away in an account that earns 5% - the interest accruing is $250. In the highest income bracket, this money would have been taxed at about 46%, which means a person saves just $115 in taxes. But, there's a more fundamental problem. As a professor with a self-employed wife and a young family, I know I can't afford to take advantage of this new savings vehicle; if I can't, I suspect few hard-working families can, given how much we're all feeling squeezed these days."

"This plan helps the rich escape from paying their fair share of taxes, increases the tax paid by the average Canadian family, and diminishes the services many Canadians use," states Moir.

Post-Secondary Education

Mr. Harper's budget pledges increases in scholarship funding and reforms to Registered Education Savings Plans. While these initiatives have merit, Dr. Moir contends that the budget ignores the root of the problem for Post-Secondary Education in Canada.

"Students gain security in scholarships and more flexible RESPs," he states, "but what they all need is an affordable education in the first place, and that simply means higher transfers to the provinces for post-secondary education."

Employment Insurance

The budget proposes the creation of a Canadian Employment Insurance Financing Board, a Crown corporation that will administer the EI program.

"I see the potential for improvements in the EI program by ensuring that surpluses are kept within the program," says Moir, "but I worry about what Mr. Harper might do to dismantle the program in the future. I see nothing in this budget for skills development, which we sorely need in New Brunswick with the struggles of the forestry industry. This need will continue once the 'boom-times' associated with Saint John's proposed energy hub are over."

Natural Resources & Agriculture

The entire forestry industry, so vital to the New Brunswick economy, will receive only $10 million over two years to promote sales overseas. It is not clear how fishermen and farmers in New Brunswick will fare under this budget.

"Dairy farmers in New Brunswick are rightfully concerned about Mr. Harper's past attacks on Canada's agricultural supply management system," comments Moir. "Who knows if he will come after the New Brunswick Milk Marketing Board?"

The Environment

Moir saves his largest criticism for the budget's environmental policy. He reminds people of the message of Sir Nicholas Stern, once Head of the Government Economic Service (UK) and past Chief Economist of the World Bank, that climate change is a serious economic issue with costs that quickly grow in the absence of any attempt to implement credible plans immediately.

"I like the new directed investments in R&D and the extension of the 50% capital cost allowance for the floundering manufacturing sector," says Moir, "but allowing firms in the oil sands in Alberta to write-off 100% of their capital costs immediately amounts to a transfer to Alberta (Mr. Harper's province), a subsidy to the super-wealthy, and a tax on the environment. The wealth goes to a few but all Canadians are forced to pay the environmental price. This just isn't fair to working people across the entire nation."

"Mr. Harper chooses to subsidize the Canadian nuclear power industry, which has been troubled of late, and to spend heavily on risky carbon sequestration research," argues Moir, "but invests nothing in energy conservation and can only afford to find money to research carbon taxes and emissions trading systems."

"Mr. Harper, I hope you are listening, because I might be able to save Canada $66 million or so," says Moir. "I worked in the McMaster Experimental Economics Lab, and that lab alone has produced 15 papers on the topic of emissions trading systems, including a 1999 paper I co-authored, 'A Laboratory Test of Canadian Proposals for an Emissions Trading Program.' The research is in; the systems work. What we need now is to begin implementation."

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