Editorial: Money in the bank is political strategizing

No one is going to argue with Canadians keeping more of their hard-earned tax dollars, but economists aren’t convinced

It’s pretty clear its election year. The Trans-Canada Highway between Golden and Revelstoke is finally getting the millions needed to address long overdue upgrades, and “Christmas in July” is what federal employment minister Pierre Poilievre is calling the cash influx Canadians with children under 18 are seeing appear in their bank accounts this week.  Not only have child care benefit payments increased, but the maximum age for which parents can receive the payment has been raised from five to 17, meaning many parents across the country are getting a nice little boost to help with all the necessary expenses that go along with raising future generations.

This is absolutely a good thing overall. No one is going to argue with Canadians keeping more of their hard-earned tax dollars, but economists at both ends of the political spectrum aren’t convinced the consumer impact of this giveaway will be enough to stimulate Canada’s sinking economy. Unless new money is found or old money is stealthily moved around, a deficit is being predicted when results from the second quarter come out on September 1st, which means the funds being paid out as the enhanced Universal Child Care Benefit may actually be borrowed money.

Interestingly enough, although $3 billion seems like a lot of money, it’s a drop in the bucket compared to the subsidies and direct support the Canadian government offers the energy sector. In a report released in 2013, the International Monetary Fund estimates energy subsidies in Canada come to $34 billion each year.  While a more equitable tax break across the board would have received a warmer welcome by more people (plus the expanded benefit is a taxable payment, which basically equates to paying more taxes on taxes already paid), cash in the bank is something every one understands.

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