Monday Morning Links

Miscellaneous material to start your week.

- Rhys Kesselman rightly points out how the populist message that propelled the Cons to power has given way to elitist policy-making:

Once the federal budget is balanced, the Conservatives plan to double the TFSA’s annual allowance to $10,000 and to permit income splitting for couples with children under 18. These are costly schemes, each running ultimately to billions a year.

While these proposals may appear to have wide appeal, most Canadians would gain nothing from them. The tax savings would flow disproportionately to the highest earners. Moreover, the ostensible goals of these proposals would be much better achieved by major changes to their structures.

Consider the proposed doubling of the TFSA annual limit from its current $5,000 level. Low and moderate earners typically can’t save even this amount, so any increase is worthless to them. For most middle-income earners, the tax savings from contributing to RRSPs trump those of the TFSA, and very few are using all of their allowable RRSP limits. Thus, few middle earners will gain from expanding the TFSA.

Only among the highest earners, above $125,000, are the full RRSP limits often used, so this group would be the primary beneficiaries from expanded TFSA access. And for this group, most of the additional TFSA room would be used simply to shield existing taxable assets with little inducement for new saving.
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Now consider the proposal to allow income splitting by couples with children. One motivation might be the view that couples with the same total earnings should pay the same total tax. But this ignores the fact that a one-earner couple has more effective income (in the form of home-produced, untaxed services) than a two-earner couple with the same earnings. Moreover, this reason would not justify confining splitting to couples with kids.

A more plausible motivation for allowing income splitting but restricting it to couples with children is the desire to give parents the option to spend more time rearing their children. High-earning parents already have this opportunity. Yet, the government’s proposal for income splitting would be of no benefit to couples where neither spouse earns above the bottom tax bracket of $41,500, partners with higher earnings but in the same tax bracket, and single parents. In fact, the largest beneficiaries would be couples with one very high earner – those in least need of aid.

- Which raises the question of how best to counter the Cons' plans. And while I don't agree entirely with Bruce Anderson's take on the state of Canadian politics, there's some reason for hope to the extent his message about the new Parliament takes hold:

(S)o far at least, the tone of this Parliament has changed. It feels like Question Period has gone off caffeine, taken up yoga, become almost Zen.

Questions are still pointed, but not as poison tipped. Response patterns from the government side have been re-engineered, letting ministers come off as smart, decent people. There’s no spiking the ball in the end zone, or other “excessive celebrations” as they say in football.

Watching Foreign Affairs Minister John Baird respond genially to a pertinent and precise question from NDP finance Critic Peggy Nash last week reminded me of how I felt when I was watching the courtly but very effective Liberal minister Allan MacEachen practice his craft in the House some 30 years ago. Any voter watching last week's Baird-Nash exchange would have come away feeling good about both politicians, I suspect.
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Strong leaders, with clear ideas for the future, passionately argued: This is the recipe for the success enjoyed in the last election by Stephen Harper and Jack Layton, and on these criteria Michael Ignatieff and Gilles Duceppe fell short. In this Parliament, with Mr. Harper, Mr. Layton and Bob Rae, Canadian voters may see a pretty good contest of will, brainpower and communications talent – one of the best we’ve experienced in years. Based on the Prime Minister's speech to the Conservative Party convention in Ottawa this week, the policy choices of the Tories will provide plenty of room for other parties to differentiate themselves. While a competition on this level may seem less scintillating on a daily basis, it has a far better chance of reversing declining engagement than what has been tried for the past couple of decades.

- It took awhile after the initial report was released, but Postmedia's Doug Schmidt is catching up on the realities of wage theft.

- Finally, I'd consider it a general plus if the Regina Public Library and Globe Theatre end up joining forces in the development of a downtown Regina cultural centre. But to the list of follow-up concerns raised by Carle Steel about the RPL Film Theatre and Dunlop Art Gallery, I'd add a more fundamental concern: surely we'll want to make sure that any project is actually driven by the needs and best interests of the RPL and the Globe, rather than merely serving as an excuse to turn them into cash cows for a private building owner. (And the leaked possibility of a building consisting mostly of commercial space doesn't offer much reason for confidence.)