On Mrs. Volpe, Al Hogan’s Hummer and financing tax cuts with Equalization

Just a couple of points this A.M. two of which were pointed out to me by my ‘sources’.

You remember when Jeannot Volpe was discussed in the Globe & Mail as Mrs. Volpe? That had to hurt.

But I digress.

Somebody pointed out to me an interesting tidbit in Mr. Volpe’s response to the recent Liberal budget. I didn’t see this but apparently Volpe, while defending the Lord record, mentioned how the Liberals in 1999 left Lord with a toll-highway deal that was incredibly expensive to “fix” when he took the tolls off. This is interesting because at the time, the Tories said that taking the tolls off was actually less expensive than leaving them on. Now, it would seem, this had considerable negative consequences for the province’s finances. When I saw that deal back then, I knew that the Tories got shafted because they made a promise. I said then, and now, that they should have backed away from the promise on the grounds it was too expensive (how many times has that happened). But they didn’t and even old Volpe is admitting how costly this was.

Al Hogan’s Hummer
Al’s a good Tory through and through – unless it hits his pocketbook. His story this AM – Gas guzzler tax ‘heavy-handed’ – seems a little cliched don’t ya think? Former Premier Lord found this out as well. Al adored Lord but when he was basically ignored by Lord over the ‘cath lab’ in Moncton – do you remember the dozens of stories and editorials? – he (Al) wasn’t that happy.

Equalization for tax cuts
There’s a front page story in the Globe this morning saying that Quebec will use its Equalization windfall to finance personal income tax cuts. There was a story last week in MacLeans entitled “Can you spare a dime, frère?” with the same theme. These stories, no doubt, are meant to annoy folks from the ‘have provinces’ even more. You don’t read stories in the Globe or MacLeans about Equalization being critical to provide health care.

Anyway, I had to chuckle when I saw the Globe article because of a flashback to a blog I wrote on Volpe/Lord using Equalization to fund tax cuts in New Brunswick and whether or not that was good public policy. Long before Charest, Lord was scooping in hundreds of millions more in Equalization and then shaving a few points of the income tax rate. Hard core Tories believe that if you cut taxes, you will stimulate economic growth. In New Brunswick, cutting taxes led to the need for more Equalization.

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0 Responses to On Mrs. Volpe, Al Hogan’s Hummer and financing tax cuts with Equalization

  1. Scott says:

    Hard core Tories believe that if you cut taxes, you will stimulate economic growth. In New Brunswick, cutting taxes led to the need for more Equalization.

    I think their approach to creating a sound economic vehicle [the province of New Brunswick] through tax cuts was definitely the right thing to do to make us more competitive. However, if you can’t find a driver [big business, foreign investors, immigrants, etc.] to use that vehicle, than you will be deemed a failure by the experts.

    That is why I think it was bad policy and the wrong approach by the Liberals to raise taxes, especially since they are now receiving a more generous share of the federal pie as the new formula favours provinces with a low fiscal capacity.

    IMHO, it’s now all about selling [marketing] the province, not changing its framework.