Danielle Smith’s child tax credit bad policy, but smart politics
PCs’ response accuses Wildrose of bad math
Markham Hislop is the publisher of Beacon News
By Markham Hislop
Why do conservative parties decry tax credits for special interest groups but don’t hesitate to trumpet credits for their own pet interests? That’s the question policy analyst Steve Lafleur was asking after Wildrose Leader Danielle Smith proposed a $200 per child annual tax credit Thursday.
“What this amounts to is that you’re taking money from young people and giving it to married people with families,” said Lafleur. “Statistically speaking, young people earn less money. You have to do this fairly. You can’t pick and choose who to give money to.”
Lafleur, who works for the Winnipeg-based Frontier Centre for Public Policy, says child tax credits are bad public policy and the worst kind of pandering during an election campaign.
Smith says the credit would provide parents and guardians with a $2,000 tax deduction for each child under the age of 18, meaning families will have an extra $200 per year for each child.
“Wildrose believes that families are the cornerstone of our province and they face unique costs associated with raising children. With the rising cost of living, we recognize that families are having a tough time making ends meet, and that is why the Wildrose Family Pack focuses on making life more affordable for Alberta families,” said Smith. “For a family of four, the Wildrose Child Tax Credit means they can count on an additional four hundred dollars per year to help manage their household budget.”
The Wildrose leader estimates the child tax credit will cost Alberta taxpayers $130 million a year.
Rather than take issue with the idea of a tax credit, Alison Redford and the Progressive Conservatives accused Smith of bad math. They pointed out that there were 884,645 children aged 0-18 in Alberta according to Statistics Canada, for a cost of $176,929,000.
“Where in the Wildrose’s Balanced Budget Pledge is the funding for this?” Redford asked.
Lafleur says both parties are missing the point. Further complications to the tax code are the real enemy. Every year Canadian governments add more and more tax credits and exemptions. While that may sound like undue pessimism from a policy wonk, Lafleur points out that eventually Canada could find itself in the same position as the United States, where decades of social and economic engineering via tax credits has created a disaster because only 50 per cent of people pay taxes anymore.
Policy issues aside, I recall the 1982 Saskatchewan election in which Conservative leader Grant Devine was languishing until he declared he would end the provincial gasoline tax. That cynical ploy kickstarted his campaign and he went on to to score a big win over Alan Blakeney and the NDP.
Danielle Smith obviously has similar aspirations. Even if a child tax credit is bad policy, the worst case scenario is that it costs Alberta $177 million a year, a drop in the bucket for a $40 billion budget.
As I write this, Smith has just announced a Wildrose government will ban mandatory fees levied by all Alberta schools, including public, Catholic and charter. She estimates they cost families $100 per child annually.
But cost isn’t the real issue. As the Beacon reported last week, some school districts, including the Calgary Board of Education, are sending unpaid school fees to collection agencies. Collection actions aren not specifically prohibited under current legislation. To make matters worse, parents have told Beacon News that schools have threatened to prevent their children from attending their graduation proms.
With two fell swoops, Danielle Smith has taken the initiative on key issues of concern to parents, and most Alberta voters are parents, grandparents or wanna be parents. PC Campaign Manager Stephen Carter seems to have been blindsided by the Wildrose move, given his campaign’s tepid response.
Like Saskatchewan voters 30 years ago, I suspect Albertans will be less interested in the tax policy implications of the Wildrose announcements and delighted to have extra dollars in their jeans.
That could spell big trouble for Alison Redford at the ballot box.
Category: Alberta Election, Analysis
Subscribe
If you enjoyed this article, subscribe to receive more just like it.
Comments (18)
Trackback URL | Comments RSS Feed
Sites That Link to this Post