Time for a GST Referendum
A couple of things are clear from the Conservative government’s Throne Speech delivered this afternoon at the opening of Parliament:
- The government is largely in a quandary on what to do to insulate Canada from the global economic meltdown
- There’s going to be a big effort to cut Ottawa’s spending — which will help to keep the deficit to a minimum, but won’t contribute to economic stability
- There’s going to be a federal deficit in the 2009-2010 fiscal year, for the first time since Parl Martin finished slaying the deficit dragon of Brian Mulroney.
Short on details, and short even on principles, the Throne Speech has one clearly regressive step — a ban on bulk exports of fresh water.
Canada has more fresh water than we’ll ever be able to use. It’s simply stupid not to consider ways in which we can prudently turn this resource into revenue for Canadians. Especially at a time when we’re experiencing declining revenues from other resources, especially oil and forestry. Revenue from water sales would help to offset these reductions, as well as help ease losses from the decline in manufacturing exports.
But the big question is: How much is Ottawa going to do to help steer the economy through the global recession? And how far dare the Harper Conservatives go into deficit?
The Liberals are hammering the Harperites for having bumped up spending by 12 per cent in the last two years while cutting the government’s revenue base through such actions as peeling back the GST. That’s meant a reduction of $11 billion a year in Ottawa’s revenues — money that would go a long way toward pumping up the economy.
So how about going back to a 7 per cent GST?
It would add almost nothing to the cost of living for the average Canadian. Prices are stable and not likely to rise in the current deflationary environment. The money we’re saving at the gas pump would easily offset the restoration of the two points on the GST.
The GST did a lot of harm when it first came in. Canada was being hammered by free trade and a lot of Canadian branch plants were closing down as a result. We’re not in that situation now.
So let’s have a referendum on the GST. Here’s how we could word the question:
DO YOU AGREE, YES OR NO, WITH RESTORING THE GST TO 7 PER CENT, USING THE REVENUE TO FUND BALANCED INCOME TAX REDUCTIONS, PROVIDE FUNDING FOR ECONOMIC STABILITY, AND MINIMIZE ANY NECESSARY FEDERAL DEFICIT?
The government could require a 60 per cent Yes vote for passage. It would be a “clear” question requiring a “clear” majority (no hanky panky like the Separatists play in their referendums). The government would not take a position for or against. The opposition parties would have a hard time opposing it, as they opposed the reductions in the first place.
It would allow Mr. Harper direct the money to where it’s most needed in the economy, and stay out of any major deficit.
When Mr. Harper was a Reformer, referendums were a key part of his party’s policy. So it shouldn’t be hard for him to sell the idea to his Conservative caucus.
An impracticall idea, you say? I call it a win-win proposition.
