Little Fish in a Giant pond

Thursday, January 03, 2008

When is a promise fulfilled?

By now just about everyone is aware that the GST has officially been cut from 6% to 5%, thereby fulfilling Prime Minister Stephen Harper's election promise to cut the GST by 2% (it was at 7% when he was elected). There is considerable debate right now about the move, as many in the opposition have been suggesting that an income tax cut would have been more fair, but for the moment at least I don't really want to get into the soundness of this decision as I'm not exactly an expert on fiscal policy and it is without a doubt a very complicated subject. What really catches my attention is the notion of when a promise is kept. In politics, the failure to keep a promise can be lethal to a candidate or party's electoral success (though this is not always the case).

Whenever former Prime Minister Jean Chrétien was confronted about not eliminating the GST, he was always quick to reply that he never promised to eliminate the GST, only that he would replace it, which is what the first Red Book stated he would do. Of course by now, many of us are probably familiar with the famous clip from This Hour Has 22 Minutes, in which appeared various clips of Chrétien promising that the GST would be gone. To be fair, if something is replaced, it is gone, and in some cases, Chrétien actually managed to reduce the overall sales taxes that are paid in certain provinces by merging the GST with the provincial sales tax. Evidently Canadian voters either accepted the explanation or found it in their hearts to forgive Chrétien because they granted him a second majority in 1997 and a third in 2000.

More recently, Ontario Premier Dalton McGuinty faced heavy criticism during the fall 2007 elections (as well as throughout his mandate, which began in 2003) for having raised provincial income taxes via the reviled "health premium". McGuinty justified this reversal by referring to an independant audit of the province's finances, which revealed that Ontario was actually running a deficit of several billion dollars, even though the previous government under Conservatives Mike Harris and Ernie Eves had reported the budget to be balanced. Evidently, Ontario voters considered this to be an acceptable excuse, since they granted McGuinty another majority in October.

On the other hand, one of the major issues in the last Québec election, was premier Jean Charest's not having reduced income taxes as he had promised to do when elected with a majority government in 2003. As a result, his majority government was reduced to a minority government.

Now the current Prime Minister of Canada, Stephen Harper, has made good on one of his election promises by reducing the GST by 2%. Just the same, Harper has already come under heavy fire for having broken his promise not to tax income trusts, as well as for having broken his promise to honour the Atlantic Accord. Harper seems to have taken lessons from Chrétien, by claiming that neither act constitutes a breach of an election promise. He and his finance Minster, Jim Flaherty, are both denying that they are taxing income trusts, and that the funding formula they recently adopted constitues a breach of the Atlantic Accord. He even managed to talk Nova Scotia into a new agreement, but Newfoundland and Labrador Premier Danny Williams is still slamming the federal government for having broken its promise.

Considering the enormous victory Williams recently won in his own provincial elections, the PM is in for one Hell of a fight if he intends to win any seats in Newfoundland. There is also some doubt that things will go over quite so smoothly in Nova Scotia as well, since despite being booted from the Conservative caucus for having voted against the budget that contained the disputed funding formula, Nova Scotia MP Bill Casey has since been re-nominated by his riding association, which of course was not accepted by the party. Casey will likely run as an independent, and may become the next Chuck Cadman (may he rest in peace). Right now it is hard to tell whether or not the entire province of Nova Scotia will punish Harper's Conservatives. In fact even Casey is not assured victory. With a possible federal elction due this Spring, it will be interesting to see whether or not Harper is able to appear as a man of his word, or if he is blasted for not keeping his promise. As with everything else in politics, perception is everything.

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