March 9th, 2020

HUGHES MARKS INTERNATIONAL WOMEN`S DAY IN PARLIAMENT

Ottawa – With parliament reconvening after a constituency week, Algoma-Manitoulin-Kapuskasing  MP, Carol Hughes reminded MPs there is so much work that remains to ensure women are full and equal partners in society.

``Yesterday was International Women’s Day and while we celebrated gains that have been made, there is still much work left to do,” said Hughes.   

The MP went on to itemize the challenges that MPs should concern themselves with  such as  barriers to women’s full economic, social and political  participation in our society, the need for pay equity legislation, an affordable national universal child care program, affordable housing.  

Hughes also challenged MPs to work to address violence against women and reject all restrictions on women’s reproductive rights; to improve  the lives of indigenous women and girls; and  to address the specific challenges faced by women of colour, members from the LGBTQI2S+ and the disability community.

``A long list for sure but, all women deserve fairness, affordability, opportunity, value, the freedom to live without fear,” said Hughes.

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For More Information: Jamie Burgess, Office of Carol Hughes, 613-996-5376 - hughec0@parl.gc.ca

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It’s time for corporate Canada to earn their tax breaks

It’s an established economic principle that people respond to incentives such as a reward for good behaviour or punishment for bad behaviour.  Most people understand this on an innate level without ever looking at the studies that backs this up.  An example of this is the classic carrot or the stick motivators that parents use to modify the behaviour of children.  It’s no surprise that governments use these same motivators to coerce the population to do things like file taxes (stick) or make their homes more energy efficient (carrot).  Where use of this idea tends to be abandoned is when governments pursue measures based on dogmatic belief and ignore empirical evidence.

An example of that took place on January 7th of this year.  That was the day that corporate Canada had, on average, completed paying their taxes (for the year!) and started accumulating wealth.  The theory behind such a woefully small contribution to the public coffers argues that a low tax rate will allow corporations to re-invest in their businesses’ machinery and equipment and even employ more people.  This is the trickle-down economics theory that has been ham-stringing western economies since it’s ascension.

Corporate Canada has enjoyed multiple tax cuts for two decades and the rate they are charged has been cut in half over that period.  When examining the outcome of those measures over the same time, it’s clear that the tax breaks are not performing as anticipated.  Instead of investing more in machinery and equipment, these businesses are hording their returns.  In fact, investment in those areas has been cut in half over the same period that taxes have gone down. 

These are global examples for all of corporate Canada and there will always be outliers – some companies do invest in their capacity at a much higher rate and there are those that don’t at all.  But best and worse case examples are not what government policy should be developed upon.  That’s why studying the rate of investment as a share of the Gross Domestic Product (GDP) offers the best window into the performance of tax incentives.  When judged that way, corporate tax cuts are not performing. 

The Fraser Institute, a right-wing think tank, reminds us yearly about tax-freedom day for individuals.  They use the individual tax burden as a rallying cry call for tax breaks, but their campaign is disingenuous, and they say nothing about the disproportionate burden placed on individuals as compared to corporations.  The silence is deafening, and it shows us all we need to know about the Fraser Institute.

Throughout the decades of corporate tax relief another trend has been growing - inequality.  As the rich get richer, there is less for everyone else.  Even the Managing Director International Monetary Fund has stated that it’s time to properly tax the rich.  This is the same organizations that prescribed austerity budgets for decades, which makes the call all the more surprising.

The truth is we need taxes – perhaps now more than ever given the significant increase in catastrophic weather events – but the wrong people are carrying most of the freight.  There is room to encourage corporations to earn tax breaks by investing in the way that had been hoped for when low rates were handed to them without strings.  Most other tax incentives are conditional.  It’s time to apply that idea to all of them.  Without that, inequality will continue to grow, and the cost will become the services and programs most people rely on.  Nobody complains about tax bills when the fire truck shows up to save their house.  Keep that in mind the next time a politician starts promising tax cuts.

Service cuts coming home to roost!

While it’s tempting to view the role of a government through the lens of big national and international issues, there is a lot of administrative work that comes with the  job as well.  Ministers inherit full departments staffed with bureaucrats responsible for fleshing out and administering policy directives and legislative initiatives.  While this may not sound as flashy as some of the issues that grip parliament, it has a  huge effect on people’s lives. 

This has been coming for years and for some front-line workers it is old news, but the ability of the government to administer many of its programs has slowly become less  effective and the proof of that is now out in the open.   A recent study from the Canadian Federation of Independent Businesses provides the latest example of the problems people are having accessing necessary services and information from federal departments.   The report focuses on CRA wait times which have gone up.  CRA claims they are dropping less calls, but it’s clear that the system is only accepting more calls while adding longer wait times to speak to an agent.  In addition to that nearly 40% of the calls  that were processed provided the callers with incorrect information.  According to the CFIB, most of those calls related to the GST/HST which should be fully understood by those answering on behalf of the department.

This shouldn’t be too surprising. For decades governments have cut into the meat of our public service to the point that they are not able to meet our needs.  Now that we have more proof of  this, it is time to consider a reinvestment in those services which have proven to be under-staffed. 

CRA has been hit, like all departments, by governments choosing to pursue balanced budgets while handing out tax breaks at the same time.  That means that although some Canadians received  tax breaks, we all paid for those with reduced services from thread-bare departments. For example, Veterans Affairs and Human Resources and Skills Development Canada lost 24 per cent of their staff between 2012 and 2016. In the same time period, the Canadian  Food Inspection Agency lost 20% of its staff, and Statistics Canada lost 35 per cent of its full-time staff.  That’s cutting meat, not fat.

Adding to the problem is the fact that most people don’t receive much in the way of tax cuts.  Those have always flowed to top earners who rely less on services like employment insurance.   Despite that the promise of tax cuts continues to be sold – quite successfully – to Canadians who receive little and lose a lot in the process.  It’s also affecting businesses – especially small ones – who may not have the resources to spend exorbitant amounts  of time of the telephone waiting to speak with someone. 

It’s time to build this up again so that Canadians needs are met by their government. The problem has been building for a long time and we knew that it was getting worse before the CRA phone  issue was confirmed.  CRA attempted to address those issues with a new phone system which only resulted in more callers waiting in a queue to speak to an agent and then again to speak to someone in the department if the agent was unable to provide an answer.

What’s missing from the equation is an over-arching plan to ensure Canadians receive the service they require in a timely manner.  Government demands on individuals never cease and there are  penalties for those who don’t comply in time with their taxes.  Yet there are no penalties for governments that make it more difficult for us to receive accurate information to fulfil these responsibilities.  

Carol Hughes MP