On Tax Cuts and Cash Giveaways

They were never meant to be well considered policies.  The Liberals' promise to reduce the provincial sales tax and the NDP cash giveaway of $1000 per household were both the standard stuff of populist-driven electoral politics.  Still, it would be nice if during the leaders' debate or other forums, there was some serious discussion about government taxation and spending in this province - where the parties want to go over the medium to long term.

While one can justify virtually any fiscal stimulus including tax cuts and cash giveaways in the wake of Covid, in the not-too-distant future government will have very hard choices to make.  The government won't be able to sustain the on-going deficits it is currently incurring and yet there will be demands for more government resources in a whole host of critically important areas.

The homelessness and despair in our parks and streets is both a tragedy and disgrace.  There are no simple answers but one thing is clear.  It will require a Covid-level commitment to address the underlying problems and the resources to match. 

Reducing greenhouse gas emissions is a universally shared objective, but it too will require serious commitment and resources to get beyond high-minded targets and achieve major reductions.  Infrastructure and other investments will be needed to make affordable, green energy alternatives available for households and industry.  Comprehensive programs and plans will be needed to support fossil fuel-dependent workers and communities in their transition to new employment and economic activity in the face of their industry's decline.  

The benefits of high quality early education and child care, both for long term child development and the more immediate needs of parents, are now widely recognized and accepted across the political spectrum.  But for that to be provided throughout the province on more than a piecemeal basis will require major investment in facilities and staff training, and on-going commitment to operating costs. 

And then there is the aging population and growing need for health care facilities and services.  There is backlog in transportation infrastructure; the on-going need to seismically upgrade, refurbish and expand school facilities; and other major demands as well.  The list could go on.

Of course, government must make choices -- not everything can be done to the extent we would like.  But if we are to take these challenges seriously, government must commit to doing more than they have in the past.  The question is whether and how the Liberas or NDP are willing to do so. 

The short term fixes the parties are offering are of no help in dealing with these critical needs.  Cutting taxes as the Liberals are offering, which will be difficult to reverse in future years no matter what their current intentions, will only make the problems worse.  Government will need more resources and unless the Liberals have some other tax in mind, their tax cut proposal will make it more difficult to address the fundamental fiscal challenges government will face. 

The NDP cash giveaway is not much better.  It will add to the deficit in the short term and increase the fiscal challenge government will face to allocate more resources to the pressing medium and long-term needs.

It is no doubt naive to think any party will want to talk about how much resources they will devote to the problems we know have to be addressed, and more to the point, how they think they will raise the required revenues.  But it still would be nice to hear whether the leaders appreciate the challenge, and in suitably election-tainted general terms, tell us how they plan to deal with it.