Did you see Finance Minister Joe Oliver’s dance of the seven veils last week? This guy is right in his element playing Peek-a-Boo. At least it makes more sense than his budgets—if we even get one this year?
When last heard from the other day, he said he might have a budget for us in April—or maybe May. Or did we just come up with a reason for the Prime Minister to call the federal election this year in April?
While nobody gives the federal Finance Minister much credit for intelligence or wit or anything else for that matter, Mr. Harper just expects him to do as he is told. Mr. Harper has already announced goodies for the voters for this year based on there being a budget surplus. And he expects Oliver to deliver it. Since the budget surplus was forecast at $1.9 billion just last November, declining revenues from the oil and gas sector have obviously wiped out the surplus.
And Mr. Harper does not like to look foolish.
Even though the former Conservative Finance Minister, the late Jim Flaherty, had made it clear that income splitting for rich families was a really bad idea, Mr. Harper went ahead and announced its implementation for this year.
Most experts cannot see how Oliver could possibly announce an honest surplus this year even by wiping out the $3 billion surplus built into the figures. It shows how much this government relies on oil and gas revenues and how heavily Canadians have been taxed on their gasoline consumption.
Industry users and consumers are currently basking in gasoline costs at about two-thirds of previous rates. By gradually decreasing prices as crude oil prices fall, refiners and gasoline retailers have been maintaining their profit margins while provincial shares of the crude oil price have been falling rapidly. That is why Alberta, and to a lesser extent Newfoundland, have been feeling the fuller impact at a faster rate. With no sales tax, the Alberta government is finally paying the piper.
In his speech late last week, Joe Oliver admitted that “The impact of lower oil prices on the Canadian economy is complex and creates both benefits and harm.” We will hope that most of the harm befalls the Conservatives for their failure to take into account the volatility of commodity prices.
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Copyright 2015 © Peter Lowry
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