Comment
If not this, then what?
I will happily give Councillor Bill Roberts the last word in the debate about the best way to raise money for the County’s roads, bridges and waterworks. But not today. The good councillor acknowledges that the crisis faced by rural communities across this province is “serious” and “structural”. That means he knows there isn’t a provincial or federal Band- Aid big enough to cover this wound. Roberts’s words show he understands, too, that a major reinvestment is required by the two senior levels of government and that it will take over a generation to fully address the decay.
That is a good start. Too many of his colleagues have a poor understanding of the scale of the issue burdening this and other communities. Sadly, many cling to the notion that there is something they can do around the council table “if only they get serious about the problem.”
Naiveté is precious in its purest form, but it risks perilous outcomes when the fluffy pink unicorns form policy. The risk, of course, is that our local politicians in their enthusiasm, strap on more debt and punish County ratepayers with more taxes just to throw this money blindly down a deep, dark hole. The risk is that they perpetually fund projects such as Union Road or County Road 49. Or $800,000 on a road without homes or taxpayers in Athol, while the pace of overall infrastructure decay proceeds unchecked.
Bill Roberts understands this. But he mostly dodges the question put to him in my column on this topic. He rejects the notion of adding a point to the Harmonized Sales Tax (HST) in Ontario, despite the unanimity of the Association of Municipalities of Ontario (AMO) in proposing the plan to Ontario Premier Kathleen Wynne last month. I suggest it is too easy to reject a workable plan without putting a realistic proposal on the table.
If not this plan—then what?
The good councillor repeats his assertion that a steep new tax on the wealthy will do the trick. But he has barely put his suggestion to paper before he recommends a significant loophole—arguing that the rich might avoid the pointiest end of his new wealth tax if they were to, instead, invest in job creation initiatives.
Is the councillor seriously proposing to add several new chapters to Canada’s 2,000-page tax code to fix our infrastructure hole? Sure, it might create a few new jobs—but I expect most new additions would come inside Canada Revenue and among the ranks of tax attorneys. Is that really what Councillor Roberts has in mind?
The wealthy are an attractive target. Perhaps too easy. If the councillor, or anyone else, can demonstrate an effective and workable way to extract $5 billion from these folks—I am all ears. But nearly every taxing jurisdiction around the world wants to make the rich pay more. Figuring out how to do this—without spending more money trying to capture this revenue than bringing it in—has proved daunting. Worse, we risk punishing capital, investment, philanthropy and innovation—sending it to more welcoming shores.
Councillor Roberts dismisses this effect as “economics eugenics”, and while we might find it deplorable, our moral discomfort moves us not one centimetre toward solving the infrastructure problem at hand.
Councillor Roberts has yet to explain how his tax levy on the wealthy would work and how much new revenue it would generate. He says his new wealth tax will differentiate between Grandma and her savings and Scotiabank. He will need to show us how. Other jurisdictions have stumbled mightily attempting this trick. Most have found it well-nigh impossible to tax wealth without discouraging domestic saving.
If the councillor has unearthed an otherwise undiscovered way to do this, and generate the amount of revenue needed, he needs to put it on the table so that we can all examine it.
Council is deliberating its position on the AMO proposal on Thursday. That would be and excellent opportunity for the Sophiasburgh councillor to make his case.
The councillor wanders into especially murky water, though, when he suggests that businesses are more sensitive to global market pressures than domestic taxation. It is a similar argument to the one Federal Finance Minister Bill Morneau makes when he proposes to eliminate tax measures used to empower small business.
Both the councillor and the finance minister conflate small business and multi-national business as the same thing. They are not. The key difference is mobility. Large businesses make decisions every day based upon return on investment. It matters not at all where. If they can process metal a few cents on the tonne cheaper in Quebec, Kentucky or Brazil they can and will do so. ROI takes in variables such as taxation, regulation, distribution and market access.
Fully half of Scotiabank’s capital is deployed outside of Canada. Grandma can’t shelter her savings this way.
The grocer next door is in an even tougher position. He doesn’t enjoy the luxury of deciding where to deploy his capital. He is held ransom to the whims of the governments of the land. His electricity bill has tripled over the past decade. His electricity charge represents only about a fifth of his Hydro One bill each month—the remainder going toward delivery, taxes and the global adjustment— a catchall line covering among other things the absurd amount we are paying renewable energy developers and subsidizing Michigan’s power bills. Moreover, his water bills and property taxes are more than double the amount he was paying 10 years ago.
But the biggest mistake Roberts makes is ignoring the increasing burden being loaded upon families here in the County. As our roads, bridges and waterworks decay, the municipality, in its professional zeal to remain compliant with provincial standards, steadily piles more and more costs on ratepayers and water users. With little regard for their ability to pay.
This, I argue, weighs more on County families than would a single point increase to the sales tax.
Councillor Roberts is trying to solve income inequality and infrastructure at the same time, by the same means. It won’t work. Council needs to focus on the challenge in front of them. We know a one per cent increase in the HST is a big step toward fixing our infrastructure crisis. Let’s do that. Then we can turn to our other problems.
Comments (0)