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MCCOLL: A Back to the Future interview with Jason Kenney

Young Kenney: “In fact, when one takes into account the effect of the deindexation of the tax brackets, this sneaky, back door, malicious tax increase imposed on Canadians by the Tory party”

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On October 24th, Jason Kenney’s government tabled its first budget. While not focused on by the mainstream media, one of the budget’s most notable moves was to de-index income tax rates. As inflation grows, taxpayers will be moved up income tax brackets every year even though they have had no real increase in their incomes, a phenomenon otherwise known as “bracket creep.” 

I recently stumbled upon Doc Brown’s DeLorean and traveled back in time to interview a younger Jason Kenney with his thoughts on bracket creep. 

Me: “Mr. Kenney, you are the Reform Party MP from Calgary Southeast. How would you describe this Alberta budget?”

Young Kenney: “I am talking about truth in advertising and that is not offered in the budget. I said that bracket creep prior to the re-indexation of the tax code constituted an annual tax increase, but I also said that stopping a tax increase was not a tax cut. People running stores increase prices every year. It is ridiculous to say if one year they decide not to increase them they are therefore cutting their prices. I thought the member was an accountant. I do not know how he gets that twisted logic.” – February 7th, 2002

Me: “Wow, tough criticism. What would you say to a government MP who insists this is a tax cut?”

Young Kenney: “They want to take credit for that as a tax cut. I am afraid it simply does not wash. If we tried that kind of accounting as a CFO at a company, we would end up making license plates in a provincial institution. That does very little to correct the significant disadvantage we continue to face vis-à-vis our major competitors and trading partners.” – May 14th, 2001

Me: “Do you think Alberta should bring back the single rate?”

Young Kenney: “The optimum tax policy is not to penalize people for working hard. We would adopt the generous exemptions I have outlined plus eventually a single rate which is progressive.” – May 14th, 2001

Me: “If you could ask the Finance Minister one question, what would it be?”

Young Kenney: “How can the minister continue to stand in his place and justify a tax system which taxes people without their even knowing it through this pernicious tax grab called bracket creep?” – Question Period, February 10th, 1999.

Me: “Is deindexing the brackets really that big a deal?”

Young Kenney: “Bracket creep… is a serious systemic flaw in our tax system.” – February 25th, 1998

Me: “You seem to feel very strong about bracket creep. Tell me more.”

Young Kenney: “Income taxes paid by the average taxpayer went up by 10 per cent largely because the government had kept in place Brian Mulroney’s hidden tax grab called bracket creep which the OECD says is hammering our economy. I went on to say that if the finance minister will not commit to broad based tax relief, will he at least commit to stop raising taxes through the hidden tax grab called bracket creep?” – February 25th, 1998

Me: “Can it really be that bad?

Young Kenney: “In the budget released yesterday there was a claim that there was tax relief for Canadians, particularly low and modest income Canadians. In fact, when one takes into account the effect of the deindexation of the tax brackets, this sneaky, back door, malicious tax increase imposed on Canadians by the Tory party…, one will find more Canadians paying taxes next year than they did last year and more Canadians paying more taxes than they ever did before.” – February 25th, 1998

Me: “Oh, wow. Powerful stuff.   If you could stand in the Legislature and talk about this, what would you say? Could you quote a Liberal who agrees with you?”

Young Kenney: “The sneakiest tax increase of all was the deindexation of personal income tax. The minister keeps quiet about this. The finance minister did not even mention it in his budget this year. It is a very simple decision that will cost Canadians billions of dollars more annually but he kept quiet about it. Here again, low and middle income Canadians will carry the heaviest burden. The leader of the opposition went on to say that such underhanded and clandestine deindexation represents the most massive and heavy tax increase in Canada’s history. It will cost Canadians billions of dollars. Sneaky, hidden, silent and automatic.” – Jason Kenney quoting John Turner on February 25th, 1998

Me: “Could you explain how low income Canadians are the hardest hit by this tax increase?”

Young Kenney: “Part of the story is that since 1993, 1.2 million low income Canadians – those who can least afford it – many of whom are under the poverty line, single mothers and single parents struggling to get by or seniors on fixed incomes, have seen themselves pushed on to the tax rolls by the government’s pernicious back door tax grab called bracket creep, by the pernicious tax on inflation. If these people get a cost of living adjustment in their pension cheques or their minimum wage income from working in the labour force, if they get an automatic COLA, a cost of living adjustment, they end up paying taxes not because they are making more in real terms—they are making the same in real terms—but because the government decides to generate more revenue to finance its insatiable appetite for spending in a way that is not transparent, in a way that Canadians cannot see it and in a way that parliament cannot approve it.” – March 2nd, 1999

Me: Are there independent reports about the perils of deindexing income taxes?

Young Kenney: “In a study released last week by the Canadian Taxpayers Federation, an organization with which I have some familiarity, it was reported that since 1986, since the then Progressive Conservative government brought in bracket creep and deindexed the tax system with respect to any inflation under 3%, the government has generated an annual revenue haul of $12 billion. That is just as a result of bracket creep. Next year Canadians will end up paying $1,300 more than they did before as a result of the consequence of bracket creep. The government has added 1.2 million people on to the tax rolls. It has pushed millions of modest income Canadians into higher tax brackets.” – March 2nd, 1999

Me: Thanks for looking at this future budget. Do you have any last words about the new Premier who wants to bring back bracket creep?

Young Kenney: “A hypocrite says one thing and does another.” – April 22nd, 2005

Links to the direct quotes above can be found HERE and HERE

Opinion

GRAFTON: Canada’s corruption rating falling under Trudeau Liberals

Guest columnist Ken Grafton writes that under Trudeau, Canada’s high rating on corruption is falling fast.

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Notwithstanding five investigations by the Office of the Conflict of Interest and Ethics Commissioner, and the potential of an RCMP investigation into possible criminal activity in connection with the Lavalin-Gate scandal, the ethically-challenged Trudeau government was re-elected last October. Despite holding the distinction of being the first prime minister to be found guilty of violating federal conflict of interest rules and then doubling-down with a second violation, a surprising 5,911,588 Canadian voters felt that Justin Trudeau should continue as the head of government for another four years.

In addition to the two key centres of Toronto and Montreal, large swaths of the Maritimes, Yukon and Northwest Territories cast their votes for a government wreaking of corruption. Astounding to many – especially in view of the fact that SNC-Lavalin had a history of bribery, was again up on bribery charges following an RCMP investigation into its actions in Libya with terrorist sponsor Muammar Gaddafi, and had been found guilty of illegal campaign contributions to the Liberal Party in 2016 – Lavalin-Gate didn’t appear to be an issue for Liberal voters at the polls.

Now the prime minister is being investigated yet again by Ethics Commissioner Mario Dion in connection with the WE Charity scandal. Conservative Shadow Minister for Ethics MP Michael Barret addressed an open letter to RCMP Commissioner Brenda Lucki on July 10th, calling for a criminal investigation into the matter. 

While the Trudeau government may be awash in corruption, it doesn’t appear to be a concern to most Canadians. A July 27th poll by Angus Reid showed that only 16 per cent of Canadians choose ethics and corruption as one of their top three issues facing the country, and 56 per cent believe that WE-Gate will have little impact on Trudeau’s government.  

Berlin-based Transparency International (TI) is a non-governmental organization that monitors government corruption globally. It publishes an annual Corruption Perceptions Index (CPI), rating 180 countries by perceived levels of public sector corruption, and defines government corruption as “the abuse of entrusted power for private gain.” The CPI is the leading global indicator of public sector corruption, rating countries on a scale of 100 (very clean) to 0 (bring cash). The 2018 CPI rates Denmark at the top of the list, with a score of 88; and the lawless war-torn state of Somalia at the bottom, with a score of 10. The US falls in 22nd place, with a score of 71 (down from a pre-Trump placing in 2015 at 16th, with a CPI of 76). Canada scored high in 2018 with a CPI of 81, placing a very respectable 9th out of 180. 

That number fell to 77 in 2019, moving Canada off the Top 10 List to number 12. As Transparency Canada explains, “Last year, issues surrounding corruption came to the forefront in Canada and grabbed international headlines that let the world know that our modest, polite country had nefarious dealings.” Lavalin-Gate was a major factor in the downgrade, raising concern from the OECD Working Group on Bribery in a March 2019 warning statement.

In addition to providing data to corporate compliance officers, TI is a reference point for leaders and journalists around the world. The Economist has stated “No country can ignore its reputation for corruption. That means that no country can ignore Transparency International.” 

It’s no surprise perhaps that Denmark and Germany enjoy the highest credit ratings possible, while lawless Somalia is at the bottom with a CPI of 180. Although there are other considerations involved, many of the factors that determine a country’s CPI also affect credit ratings. The same factors can determine where a corporation chooses to locate or otherwise invest, contribute to wealth inequality (OECD), affect immigration patterns (with the least corrupt countries generally offering the best prospects for new immigrants), and impact tourism (as corruption and public safety are often linked). 

There are many arguments against corruption, and many reasons to embrace ethics and transparency. The UN has stated “Corruption undermines democratic institutions, slows economic development and contributes to governmental instability.” A 2016 OECD report “Putting An End To Corruption” sums up the threat to democracy. 

“Corruption undermines sustainable economic, political and social development, for developing, emerging and developed economies alike. Corruption endangers private sector productivity…hinders public sector productivity…and is a threat to inclusive growth by undermining the opportunities to participate equally in social, economic and political life and impacting the distribution of income and well-being. Corruption also erodes trust in government and public institutions, rendering reform more difficult.” 

This should be required reading on Parliament Hill.

According to TI, the Corruption Perceptions Index is a composite index, a combination of different international surveys and assessments of corruption, collected by a variety of reputable institutions. The index draws on 13 surveys from independent institutions specialising in governance and business climate analysis covering expert assessments and views of businesspeople.

How will WE-Gate impact upon Canada’s international standing as a relatively corruption-free market environment? 

A glimmer of hope perhaps from Angus Reid. Trudeau’s approval rating has dropped to 44 per cent. Troublingly for Trudeau, this lost approval comes primarily from those who voted Liberal in the last election. Although four-in-five Liberal voters still approve of the prime minister, there has been a drop of nine points in two weeks.

Since the CPI – by definition – is a measurement of perceptions, it follows that the ethics violations by Prime Minister Trudeau must result in damage to Canada’s good standing. 

Look for a further downgrade in Canada’s CPI. Corruption is a slippery slope.

Ken Grafton is a freelance columnist

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Opinion

GEROW: Western Canada needs its own currency

Darcy Gerow writes that currency manipulation from Ottawa is a hidden tax on all Canadians, but robs the West more than others.

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With a united Wildrose Independence Party in Alberta and Jay Hill at the helm of Wexit Canada, the independence conversation has gotten serious. A May 2020 poll conducted for the Western Standard found that 45 to 48 per cent of Albertans supported independence. That’s real close to a 51 per cent tipping point. Though, for a lot of Albertans, independence is only an opportunity to lean into Ottawa for a fair deal on equalization and the constitution.

There is enough support for a fair deal to build a solid footing for Western independence, but that foundation will be useless if this house is framed using the Canadian dollar.

The Canadian dollar is consistently hitting new lows every year when measured against indicators like the consumer price index, which measures the price impacts of inflation caused by the Canadian government’s manipulation of the money supply. 

An independent West (or just Alberta) should reject a foreign government (in this case Ottawa) devaluing its currency. Unlike Quebec sovereigntists – who want to continue using the Canadian dollar – Westerners would be better off with their own currency, a Western dollar which is free of manipulation.

Junior high civics classes have conditioned Canadians to trust the government with the money supply as a noble endeavor, that the marketplace can’t provide a product sound enough to be used as a medium of exchange or a store of value. The federal government took that trust and printed up a trillion dollars in debt for all kinds of corporate welfare programs. Most recently, to give to their buddies in the mainstream media and WE charities, or to conduct the massive Covid-19 vote-buying welfare scheme, and they’ve done it at the expense of impoverishing those who trusted them with what little wealth they had. All while the marketplace has given us a product that is sound enough to be a medium of exchange and a far superior store of value – gold. 

The Canadian Dollar was backed by gold until 1914 when the Finance Act was passed. This allowed the dollar to be artificially devalued to fund the First World War. The dollar reached a new all-time low measured in gold at the end of 2019 from which it will never recover.

A fair deal on equalization, or better yet, the end of equalization is a great thing, but if the West keeps the Canadian dollar, the door to unfair treatment by Ottawa will always be open. The ability to manipulate the money supply is akin to a tax. Instead of confiscating the actual dollars – like they do with equalization – they are confiscating the value of a dollar. They are stealing purchasing power. As Western provinces have historically out-performed Eastern ones when it comes to productivity, a tax on purchasing power disproportionately affects the West.

If Albertans or the entire West succeed in achieving independence, it would be foolish to continue paying the inflation tax to Ottawa. 

While the West does not have the gold to completely back a currency yet, it isn’t necessary to get the ball rolling. The Western dollar can be pegged to the price of gold at a rate similar to the Canadian dollar and legislation will be required to restrict devaluation by Western governments. As Canada continues to devalue the loonie, our share of the Canadian debt – which would presumably follow us into independence – will be wiped out by inflation.

Here in the West, people are dumping dollars and turning to gold. Remember that Western Standard poll? Having a gold backed Western dollar on the table is enough to tip the scales towards independence.

Even for those not convinced that independence is the right course, Westerners should be demanding sound money as part of a fair deal with Ottawa. What’s the point of keeping those equalization dollars if the money itself is worthless?

Darcy Gerow is a columnist for the Western Standard

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Opinion

LETTER: Stop repatriating ISIS fighters to Canada

A reader says that Canada must shut the door on returning ISIS fighters.

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RE: Calgary man charged with terror crimes after allegedly training with ISIS in Syria

The arrest of a Calgary man by the RCMP on terror-related charges linked to his time with the Islamic State should be a stern reminder to Canadians that the old foe of Islamic extremism hides beneath current tensions. The RCMP say there are 190 Canadians linked to Islamic terror groups. Sixty have returned to Canada. The most notorious organization, Islamic State, butchered its way across nations and conquered sizable territory and resources.

We should never forget that these groups intend us harm. ISIS, more than any other, seduced many individuals into committing crimes for them – many of these persons were never officially linked to Islamic State. Alberta Premier Jason Kenney is right to counsel Ottawa to never allow the repatriation of ISIS fighters back into this country. Last month, Human Rights Watch accused Canada of abandoning some of these people inside prison camps variously controlled by the Kurds and the Turks.

The problem of terrorist repatriation is a global one. The Kurds and the Turks, by turns, have demanded their return and an end to their unwanted global responsibility. Britain’s appellate court has been lambasted by critics for allowing its former citizen, dubbed the Jihadi Bride, an ISIS member, to return home. Shamima Begum left Britain for Syria and stayed with the terror group for three years. Now sitting inside a refugee camp, she apparently begged to be repatriated. Britain’s Conservative MPs argue her return sets a dangerous precedent. They are correct in saying so.

Global, indeed Middle Eastern, security has always depended on a powerful alliance between the U.S, Israel, and a few Arab nations. States like Egypt and Jordan share military and economic partnerships with Israel. The American withdrawal from parts of the Middle East like Syria was a mistake. They enabled the Taliban to rebound and Hezbollah to resume attacking Israel. The China-Iran alliance could enable the tracking of Western forces. 

Christopher Mansour
Barrie, ON

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