New finance minister plays same old federal numbers game

New finance minister plays same old federal numbers game

Ottawa - Thursday, June 20, 2002 - by: Walter Robinson, Federal Director, Canadian Taxpayers Federation

our man
Sunday

With the firing of former Ottawa Citizen publisher, Russell Mills, this past Sunday, some folks in Ottawa wondered whether John Manley, the Deputy Prime Minister and Minister of, well, almost everything, would become the new publisher of the paper. Why not? He’s received other promotions on recent Sundays.

infomercial
Amidst this chaos, the Deputy Prime Minister donned his Finance Minister’s cap and appeared before the Commons finance committee this week to provide parliamentarians — and Canadians — with an economic infomercial. The only things missing were a 1-800 order line and paid studio audience.

busy
man
In fairness to Minister Manley, he’s only been on the job for three weeks. Between acting as the Prime Minister’s apologist during question period, chief political minister for Ontario, federal infrastructure guru, border crossing point-man with the Yanks, Tim Horton’s drive-thru guy, Member of Parliament, husband, father and a marathon runner, at best he’s spent all of twenty-eight minutes at the finance department … with four minutes lost to elevator rides.

blah
blah
blah
His remarks were textbook

“our economy grew at a robust rate”,
“core inflation remains well within the target range”,
“opportunities for Canadians and their families”,

blah, blah, blah. His testimony was calmly reassuring but hardly enlightening.

pay down
debt
However, we did learn a few things. First, Mr. Manley confirmed that the federal surplus for 2001/2002 is about $6 billion. By law, this amount will go toward the national debt, now pegged at $547.4 billion.

$10
billion
surplus
What this really means is Ottawa raked in almost $10 billion in over-taxation last year. Take $6 billion and add $500 million for the Africa fund and $2 billion for the Strategic Infrastructure Foundation, both funded out of last year’s taxes -- courtesy of last December’s budget — and voila, an $8.5 billion surplus. Add some corporate tax rebates and year-end adjustments and the surplus easily climbs close to $10 billion.

growth
of 2.9%
The Minister also told the committee that Canada’s economy experienced real growth of 2.9% in the fourth quarter of 2001 and an annualized rate of 6% in the first quarter of 2002. With the OECD and International Monitary Fund both predicting that Canada will lead the G-7 in growth for 2002 and 2003, it's safe to assume surpluses in both years will likely top $15 billion. The Minster promised a full update this fall which foretells a February 2003 budget.

blatant
falsehood
Of course, John Manley’s testimony was problematic in what he said and what he did not say. With respect to further tax relief, he promised tax cuts when “fiscal resources permit.” Translation: don’t hold your breath. Sadly, he continued the fiction — no, let’s be clear, the blatant falsehood — that the feds cuts taxes by $100 billion in 2000. Not true!

tax
cuts?
When bracket creep is factored out, Canada Pension premium increases are factored in and the Canada Tax Child Benefit is measured as a spending program (that’s what it is) instead of a tax cut, this figure becomes $47.4 billion over five years. Impressive, yes ... but not a $100 billion as originally advertised.

avoided
The finance minister also skirted the issue of any plans to pump needed dollars into Defence or to engage other levels of government on the cities agenda as his predecessor, Mr. Martin, had promised.

policy
failures
Mr. Manley also failed to reveal the tab for anticipated farm subsidies and softwood lumber bailout packages. Place your money on the details of these initiatives floating out during the dog days of summer when Parliament is in recess and no one is around to point out that reason for both packages is a direct result of Ottawa’s policy failures at the international trade table.

''C'
Overall, Minister Manley’s first committee appearance warrants a “C” grade. As our teachers used to write,

“there’s plenty of room for improvement, especially when it comes to simple mathematics.”

Walter Robinson
Federal Director



New finance minister plays same old federal numbers game

Ottawa - Thursday, June 20, 2002 - by: Walter Robinson, Federal Director, Canadian Taxpayers Federation

our man Sunday	With the firing of former *Ottawa Citizen* publisher, Russell Mills, this past Sunday, some folks in Ottawa wondered whether John Manley, the Deputy Prime Minister and Minister of, well, almost everything, would become the new publisher of the paper. Why not? He’s received other promotions on recent Sundays.

infomercial	Amidst this chaos, the Deputy Prime Minister donned his Finance Minister’s cap and appeared before the Commons finance committee this week to provide parliamentarians — and Canadians — with an economic infomercial. The only things missing were a 1-800 order line and paid studio audience.

busy man	In fairness to Minister Manley, he’s only been on the job for three weeks. Between acting as the Prime Minister’s apologist during question period, chief political minister for Ontario, federal infrastructure guru, border crossing point-man with the Yanks, Tim Horton’s drive-thru guy, Member of Parliament, husband, father and a marathon runner, at best he’s spent all of twenty-eight minutes at the finance department … with four minutes lost to elevator rides.

blah blah blah	His remarks were textbook
	“our economy grew at a robust rate”, “core inflation remains well within the target range”, “opportunities for Canadians and their families”,
	blah, blah, blah. His testimony was calmly reassuring but hardly enlightening.

pay down debt	However, we did learn a few things. First, Mr. Manley confirmed that the federal surplus for 2001/2002 is about $6 billion. By law, this amount will go toward the national debt, now pegged at $547.4 billion.

$10 billion surplus	What this really means is Ottawa raked in almost $10 billion in over-taxation last year. Take $6 billion and add $500 million for the Africa fund and $2 billion for the Strategic Infrastructure Foundation, both funded out of last year’s taxes -- courtesy of last December’s budget — and voila, an $8.5 billion surplus. Add some corporate tax rebates and year-end adjustments and the surplus easily climbs close to $10 billion.

growth of 2.9%	The Minister also told the committee that Canada’s economy experienced real growth of 2.9% in the fourth quarter of 2001 and an annualized rate of 6% in the first quarter of 2002. With the OECD and International Monitary Fund both predicting that Canada will lead the G-7 in growth for 2002 and 2003, it's safe to assume surpluses in both years will likely top $15 billion. The Minster promised a full update this fall which foretells a February 2003 budget.

blatant falsehood	Of course, John Manley’s testimony was problematic in what he said and what he did not say. With respect to further tax relief, he promised tax cuts when “fiscal resources permit.” Translation: don’t hold your breath. Sadly, he continued the fiction — no, let’s be clear, the blatant falsehood — that the feds cuts taxes by $100 billion in 2000. Not true!

tax cuts?	When bracket creep is factored out, Canada Pension premium increases are factored in and the Canada Tax Child Benefit is measured as a spending program (that’s what it is) instead of a tax cut, this figure becomes $47.4 billion over five years. Impressive, yes ... but not a $100 billion as originally advertised.

avoided	The finance minister also skirted the issue of any plans to pump needed dollars into Defence or to engage other levels of government on the cities agenda as his predecessor, Mr. Martin, had promised.

policy failures	Mr. Manley also failed to reveal the tab for anticipated farm subsidies and softwood lumber bailout packages. Place your money on the details of these initiatives floating out during the dog days of summer when Parliament is in recess and no one is around to point out that reason for both packages is a direct result of Ottawa’s policy failures at the international trade table.

''C'	Overall, Minister Manley’s first committee appearance warrants a “C” grade. As our teachers used to write,
''C'	“there’s plenty of room for improvement, especially when it comes to simple mathematics.”

	Walter Robinson Federal Director