Yogi
10-05-2005, 09:10 PM
By: ALEXANDER PANETTA
OTTAWA (CP) - Every taxpayer in the country will get a cheque from the federal government each year that it posts larger-than-expected surpluses, sources say.
The Liberals' Surplus Allocation Act will promise taxpayers a slice of the surplus along with their income-tax return, federal officials told The Canadian Press.
"Canadians would be getting a dividend on the performance of the economy," said one official.
The legislation, to be tabled Friday, sets out a broader spending plan for the unplanned surpluses that Ottawa frequently racks up.
One-third of all unexpected surpluses will go to debt relief, one-third to program spending and one-third to taxpayers.
The government has drastically underestimated its surpluses since balancing the budget in 1997-98. In one of the most dramatic examples - 2002-03 - Ottawa estimated a $3-billion surplus that ended up at $9.1 billion. Under the proposed formula, the extra $6.1 billion would have been divided three ways, with $2 billion going to taxpayers.
That would have provided cheques averaging $133 each for Canada's 15 million taxpayers, depending on their tax brackets.
Under the plan, taxpayers who owe the government at year's end will see the bonus deducted from what they owe. For those slated to get money back, the bonus would be added to their tax cheques.
It is unclear whether the legislation will get through Parliament before an election expected within several months.
The opposition ridiculed the plan.
"It looks like peanuts," NDP finance critic Judy Wasylycia-Leis told CTV.
"It's not even enough to buy a cup of coffee every week. I think we've got to look at the real motive of the Liberals - which is a pretty transparent way of buying Canadians' loyalty back and get ready for the next election."
The opposition has been demanding for years a more democratic way to allocate surpluses.
They accuse the Liberals of short-circuiting democratic debate by racking up giant surpluses and then automatically allocating all the extra money to debt relief at year's end.
One high-ranking government source said the Liberals will continue paying down the debt - which stands at almost $500 billion.
He said the current debt-to-GDP ratio of 38.7 per cent will continue falling and will meet the 25 per cent target by 2015.
"We are in no way detracting from our commitment to debt relief," he said.
The Canadian Taxpayers Federation was unimpressed with the plan, calling it a gimmick leading up to the next election.
"Smells fishy to me - smells like election herring," said John Williamson, head of the federation.
"I think Canadian taxpayers would welcome any kind of rebate cheque from the federal government. But . . . it's not a real tax cut." He said the more transparent way to proceed would be guaranteeing tax cuts that Canadians could count on every year.
Williamson cited an example from 2004-05, where private-sector forecasters predicted a $7 billion surplus as late as this summer.
But the government went on an end-of-year spending spree and wound up with a rare smaller-than-expected surplus of $1.6 billion.
That means taxpayers would have received nothing this year - and would get nothing whenever the government chose to go on a late-year spending spree, Williamson said.
But a federal official defended the so-called formula of thirds.
"That equal distribution between debt relief, tax relief and program spending just strikes Canadians as a reasonable thing to do," he said.
"This legislation reflects the wishes of Canadians."
Yup, government vote-buying (bribing us with our own $$ ?) is set to begin just in time for the next election :p
OTTAWA (CP) - Every taxpayer in the country will get a cheque from the federal government each year that it posts larger-than-expected surpluses, sources say.
The Liberals' Surplus Allocation Act will promise taxpayers a slice of the surplus along with their income-tax return, federal officials told The Canadian Press.
"Canadians would be getting a dividend on the performance of the economy," said one official.
The legislation, to be tabled Friday, sets out a broader spending plan for the unplanned surpluses that Ottawa frequently racks up.
One-third of all unexpected surpluses will go to debt relief, one-third to program spending and one-third to taxpayers.
The government has drastically underestimated its surpluses since balancing the budget in 1997-98. In one of the most dramatic examples - 2002-03 - Ottawa estimated a $3-billion surplus that ended up at $9.1 billion. Under the proposed formula, the extra $6.1 billion would have been divided three ways, with $2 billion going to taxpayers.
That would have provided cheques averaging $133 each for Canada's 15 million taxpayers, depending on their tax brackets.
Under the plan, taxpayers who owe the government at year's end will see the bonus deducted from what they owe. For those slated to get money back, the bonus would be added to their tax cheques.
It is unclear whether the legislation will get through Parliament before an election expected within several months.
The opposition ridiculed the plan.
"It looks like peanuts," NDP finance critic Judy Wasylycia-Leis told CTV.
"It's not even enough to buy a cup of coffee every week. I think we've got to look at the real motive of the Liberals - which is a pretty transparent way of buying Canadians' loyalty back and get ready for the next election."
The opposition has been demanding for years a more democratic way to allocate surpluses.
They accuse the Liberals of short-circuiting democratic debate by racking up giant surpluses and then automatically allocating all the extra money to debt relief at year's end.
One high-ranking government source said the Liberals will continue paying down the debt - which stands at almost $500 billion.
He said the current debt-to-GDP ratio of 38.7 per cent will continue falling and will meet the 25 per cent target by 2015.
"We are in no way detracting from our commitment to debt relief," he said.
The Canadian Taxpayers Federation was unimpressed with the plan, calling it a gimmick leading up to the next election.
"Smells fishy to me - smells like election herring," said John Williamson, head of the federation.
"I think Canadian taxpayers would welcome any kind of rebate cheque from the federal government. But . . . it's not a real tax cut." He said the more transparent way to proceed would be guaranteeing tax cuts that Canadians could count on every year.
Williamson cited an example from 2004-05, where private-sector forecasters predicted a $7 billion surplus as late as this summer.
But the government went on an end-of-year spending spree and wound up with a rare smaller-than-expected surplus of $1.6 billion.
That means taxpayers would have received nothing this year - and would get nothing whenever the government chose to go on a late-year spending spree, Williamson said.
But a federal official defended the so-called formula of thirds.
"That equal distribution between debt relief, tax relief and program spending just strikes Canadians as a reasonable thing to do," he said.
"This legislation reflects the wishes of Canadians."
Yup, government vote-buying (bribing us with our own $$ ?) is set to begin just in time for the next election :p