What's a surplus?

  • October 5, 2007
{mosimage}Prime Minister Stephen Harper was in a rather indecent rush recently to turn the $14-billion federal surplus from last year into a $725-million tax cut for all Canadians. Granted, we’d all love an extra $30 or so to go shopping at the mall, but before we accept this as a fait accompli, shouldn’t we at least talk about it.

It’s not like there are no alternatives. There are and some of them make far more sense, both morally and in the interest of the country, than a quickie tax break.

It must be said that this annual dance around the surplus didn’t start with Harper and the Conservatives. As finance minister under Jean Chretien, Paul Martin turned it into an example of the Liberals’ virtuosity, showing they could save money and cut down the debt. In the mid-1990s, reducing federal debt was urgently needed, considering the sorry shape of the government’s finances. Now that the country is on a much happier plane, economically speaking, the necessity isn’t as dire. Still, paying down debt is never a bad policy as it lowers interest payments and frees money for other uses.

{sidebar id=2}But it’s those “other uses” that need some discussion. Since the economy is rolling along rather nicely, with only a few minor bumps, the government can safely turn its attention to other issues that were put on the back burner back in the days when the country was purportedly heading for a frontal collision with that immovable “debt wall.”

For instance, what about public infrastructure such as public transit, roads, hospitals and schools? In 1961, the federal government covered 33 cents of every dollar spent on public infrastructure; in 2005 it was 12 cents. Meanwhile bridges are collapsing in Quebec, Toronto’s transportation system is approaching gridlock and our medical system is so overstretched that people are desperate enough to pay out of their own pockets for treatments and procedures their tax dollars used to cover.

Then there’s social housing. According to the Catholic Charities of the archdiocese of Toronto election guide, “the waiting time for some 187,000 low-income families across the province for decent, affordable housing is eight to 10 years — 67,000 households in Toronto alone. More than 120,000 people who are developmentally disabled still lack supportive housing.” While some federal money has been forthcoming, the need has not disappeared.

There are many other areas that could be mentioned. But the point is that the “surplus” is not just found money, suddenly available thanks to Ottawa’s careful stewardship. It is money not spent on necessary public goods.

The collecting and spending of tax dollars requires moral choices all along the way. When governments decide to offer one-time tax breaks, they forego helping to foster other important public goods and contribute to the country’s health and society’s common good. And isn’t that what governments are for?

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