Don Drummond, Chief Economist, TD Bank
Note: This article is also published on Reuters.
It's a cynical political stunt, something that, by the way, would only help students of wealthy parents or at least parents with significant amounts of disposable income to invest in a Registered Education Savings Plan. Emphasis mine.
"Obviously tax deductions are more valuable the higher your taxes are," Drummond said in an interview Friday, adding that RESPs already tend to benefit upper-income families who can afford to make the contributions.
(...)
"It's probably not that far-fetched a statement to say that on the tax side, our financing of post-secondary eduction is now a transfer away from the less well-off to the better off," he said. "And this just exacerbates it, which is really bizarre."
Drummond added that "this is not an education savings plan . . . it's a very powerful income-splitting tool." Parents will use it to split their income with their children, allowing up to $5,000 a year to be taxed at a lower rate, he said. "It's going to be very popular."
The cost "is going to be $2 billion, not $900 million," Drummond said. That's on top of $400 million a year in federal grants that already go to students -- mostly from families with annual income above $75,000, he added.
Would you believe that this move to benefit the wealthy and forget about the needy is actually the brainchild of the Liberals, the New Democratic Party and the Bloc Quebecois, all of whom are self-labelled as "progressive" and love to claim that they care about the needy and to blast the Conservatives as allegedly only "caring about the rich and big corporations".
What blatant hypocrisy.
What cynical, cavailer uncaringness as to the risk of plunging Canada back into deficit and adding again to the national debt. This is proof positive that the "progressive" parties are grossly fiscally irresponsible.
It's nothing more than a cynical, ill-advised political stunt. Shame on the Liberals, NDP and Bloc.
The voters will not like this. Not unless they're rich, anyway. See, the "progressives" are pandering to the wealthy and leaving the needy to fend for themselves. Isn't that nice?
And the risk they're taking is that the Prime Minister, I've heard, can actually call an election over this kind of serious issue which has the Opposition hijacking the agenda, taking control away from the duly elected government, taking fiscal control into their own hands for selfish, mean-spirited partisan reasons. Wonder if this is what they want? Do the Liberals realize that they may well have to face the wrath of the voters before they're prepared to do so? We know they aren't, as we know already that they'll do anything it takes to avoid this. Clearly, they're nuts. And the NDP? The Bloc? Well, I think they want an election, as they think they can pick up a couple of new seats from the Liberals, maybe. And they really don't care whether Canadian voters want an election now.
Interesting. We'll see how it unfolds. Will the Senate do the right thing or will it do the wrong thing? It's up to the dominant, unelected, unaccountable Liberals there. Depending on what they do, they could either make the case for themselves, or they'll make the case for their abolition or for serious Triple-E reform.
Rather like chess, isn't it? And like poker. It's about strategy and bluffing.
Speaking of bluffing, I think the Liberals are counting against all odds that the Conservative government will fold. But from what I'm hearing from Finance Minister Flaherty, this isn't going to happen. The bluffers will have to either fold or show their cards to the electorate. I think "checkmate" will be for the Conservatives to declare.
Oh, and... very, very importantly, guess what? The government has already legislated a savings plan that will shelter up to $5,000 per year. And guess what? This savings plan can indeed be used to pay for one's kids' education.
We don't need an RESP. We already gave the People the means with which to save exactly like that. And the Liberals, NDP and Bloc know this. Yet they pull such a stunt? I predict they'll pay at the polls.
UPDATE: Rather than kiss up to the unelected, unaccoubtable, Liberal-dominated Senate, Finance Minister Flaherty will move to terminate the Opposition's RESP stunt bill
In other words, Minister Flaherty is declaring to the Opposition: "Go ahead, make my day".Flaherty said he'll include a provision to nullify the bill in legislation, expected to be introduced as early as this week, to implement last month's budget.
The private member's bill "imperils the fiscal plan of the government," Flaherty said Monday.
"It runs the risk of putting the balanced budget of our government into a Liberal deficit and we are not going to run a deficit. So we're going to kill the bill."
(...)
He's also raising the stakes. By putting a provision to kill McTeague's bill in budget implementation legislation, Flaherty is making the RESP issue a confidence matter over which the government could potentially fall.
Just watch the Liberals go out of their way, yet again (I've lost count of the number of times they sat on their hands or hightailed it out of the House) to ensure that, this time, the bill they voted for recently is terminated. Par for the course for the Liberal Party, the laughingstock of Canada.
Hey, thanks for the votes of confidence in the Conservative government, Liberals! You know, this minority thing isn't so bad after all!
