Andrew Scheer came out with his first economic policy plank yesterday, and it was pretty much a tepid reheated policy of the Harper era that plans to be packed into a private members’ bill at some point this parliament. The idea is a “tax credit” for parental EI benefits – because Harper-era Conservatives loved nothing more than tax credits, and tax credits are the loophole in private members’ bills that let them spend money without actually spending money, because the rationale is that they’re reducing income rather than raising revenue, but if I had my druthers, I would see that loophole closed because a tax expenditure impacts the treasury just as much as an actual spending programme does. Add to that, tax credits are generally not tracked by the Department of Finance, so their ongoing impact is not reported to Parliament, nor is their effectiveness really tracked either – and yes, there is an Auditor General’s report from a couple of years ago that states this very problem with them.
https://twitter.com/InklessPW/status/959085766029713408
And add to that, this announcement is yet another sop to the suburban family voter that the Conservatives want to try to recapture from the Liberals. Of course, like most of the plans of the Harper era, the tax credit structure doesn’t actually help a lot of the families who need it, and the benefits tend to go towards those who make more money in the first place, which one suspects is why the Liberals’ Canada Child Benefit was seen as a more advantageous plan to that same voting demographic that Scheer wants to target. And don’t take my word for it – here’s Kevin Milligan and Jennifer Robson to walk you through why this isn’t a well though-out plan from an economic or policy standpoint.
https://twitter.com/kevinmilligan/status/959082561090670592
https://twitter.com/kevinmilligan/status/959085082827882496
https://twitter.com/kevinmilligan/status/959087061453033473
https://twitter.com/kevinmilligan/status/959088530117967872
Low & modest income parents are less likely to qualify for & claim EI. Middle/upper income parents are more likely and, all else being equal, would benefit more from tax free status.
— Dr. J Robson (@JenniferRobson8) February 1, 2018
Middle/upper income parents also more likely to get an employer top-up on EI benefits. So tax-free status will cut their tax burden even if take-home income is near 100% of working income
— Dr. J Robson (@JenniferRobson8) February 1, 2018
What’s the rationale for making only *some* EI special benefits tax-free? Why not sickness? Or compassionate care?
— Dr. J Robson (@JenniferRobson8) February 1, 2018
To clarify: I don’t mean *ought to not be taxable*. Rather, I mean this is opening a can of problems/worms. Distracts from focus on more better options to improve each EI & support for new parents.
— Dr. J Robson (@JenniferRobson8) February 1, 2018