2011 Canadian Election Thread

[Tinordi]

Canadian Development Expense

Canadian Exploration Expense

Are the two big ones.

Existing ACCA is still a subsidy until it's phase out by 2015

[CaptainCrunch]

Originally Posted by fotze

NDP really pandering to Quebec with this quote. That is some real creative math. What are these subsidies anyway?

“Under Stephen Harper, every single Quebecer is sending roughly $75 a year to subsidize dirty fossil fuel producers,” Layton said at a recycling business in Montreal on Thursday, his first campaign stop in the province of Quebec.

Thats the one thing that really bugs me about Layton.

I remember in the last election he made this point of flying over the oil sands and talking about basically how Alberta had to pay.

But I didn't see that same play flying over the factories in Ontario's manufacturing belt.

If he's going to mention what Quebecers pay, the honest next step would be to mention what Quebec receives from the Have provinces.

But no politician will ever be that blatent to Quebec.

[burn_this_city]

Meanwhile Alberta sends Quebec over $1000 each in equalization. Layton is a total moron when it comes to economics, I have my doubts he could balance a chequebook.

[crazy_eoj]

Originally Posted by fotze

NDP really pandering to Quebec with this quote. That is some real creative math. What are these subsidies anyway?

“Under Stephen Harper, every single Quebecer is sending roughly $75 a year to subsidize dirty fossil fuel producers,” Layton said at a recycling business in Montreal on Thursday, his first campaign stop in the province of Quebec.

CEE and CDE both require companies to spend money and then they dont pay tax on the amount they spend until it is recovered.

Eliminating these subsidies generally just means the companies won't invest as much and jobs go down the drain. Nothing will be 'saved'.

Trying to paint it as sending money from Quebec is just ludicrous when Alberta sends billions upon billions of equalization every year. Equalization made from oil investment and production.

[Tinordi]

What do you mean nothing will be saved? The tax subsidies (ie spending) will be saved. Income taxes from new jobs are essentially revenue neutral.

[Cowboy89]

Originally Posted by crazy_eoj

CEE and CDE both require companies to spend money and then they dont pay tax on the amount they spend until it is recovered.

Eliminating these subsidies generally just means the companies won't invest as much and jobs go down the drain. Nothing will be 'saved'.

Trying to paint it as sending money from Quebec is just ludicrous when Alberta sends billions upon billions of equalization every year. Equalization made from oil investment and production.

What's actually more appalling about the Quebec situation is that they seem hellbent on preventing a natural gas industry from developing there so more has to be paid on equalization. They too can benefit from CEE and CDE if they allow companies to drill!

[Ducay]

So Ignatieff dogs Harper on spending and then throws another $2B down the tubes with the Student and Childcare proposals?

[Frequitude]

Originally Posted by Tinordi

Canadian Development Expense

Canadian Exploration Expense

Are the two big ones.

Existing ACCA is still a subsidy until it's phase out by 2015

How is CDE a subsidy?

CDE assets are allowed to be expensed at 30% per year on a declining balance for tax purposes, as oppose to fully in the year incurred. So they actually spread out the tax write off over a number of years instead, thereby increasing the present value of taxes collected.

Or are you suggesting that its a subsidy because CDE assets could be expensed over a much longer period of time, thereby decreasing their tax savings?

[Tinordi]

CDE is a subsidy because it's a tax deduction you would otherwise have to pay if you were any other business that couldn't qualify for the expense. In otherwords its foregone tax revenue, the definition of a tax subsidy.

[Ducay]

Originally Posted by Tinordi

CDE is a subsidy because it's a tax deduction you would otherwise have to pay if you were any other business that couldn't qualify for the expense. In otherwords its foregone tax revenue, the definition of a tax subsidy.

Ya, but they wouldn't have spent anything in the first place (ie losing a huge chunk of income taxes, GST etc) if the deduction wasn't in place.

[Tinordi]

Originally Posted by Ducay

Ya, but they wouldn't have spent anything in the first place (ie losing a huge chunk of income taxes, GST etc) if the deduction wasn't in place.

So you're saying you need to spend tax subsidies to accrue tax receipts? That doesn't make sense.

Why not, y'know, let the market determine what the optimal level of exploration and extraction is?

[Frequitude]

Originally Posted by Tinordi

CDE is a subsidy because it's a tax deduction you would otherwise have to pay if you were any other business that couldn't qualify for the expense. In otherwords its foregone tax revenue, the definition of a tax subsidy.

Its an expense that goes against revenue, like any other capital or operating expense. How is that any different than my company "writing off" my salary or any of the many costs of doing business that are incurred.

CDE just defines how quickly you can write it off. Perhaps I'm missing something here?

[Tinordi]

It isn't different at all. Governments choose provide tax subsidies all the time to promote various economic activity, in the case you mention its to promote small business and the like.

All I'm saying is that it's a subsidy. Full stop.

[CaptainCrunch]

Originally Posted by Ducay

So Ignatieff dogs Harper on spending and then throws another $2B down the tubes with the Student and Childcare proposals?

He thinks that he can make that up with the corporate tax cuts.

I'd be interested in seeing if anyone has actually done a study of what would happen to tax revenue and unemployment if you jacked up Corporate tax rates.

[Frequitude]

Originally Posted by Tinordi

It isn't different at all. Governments choose provide tax subsidies all the time to promote various economic activity, in the case you mention its to promote small business and the like.

All I'm saying is that it's a subsidy. Full stop.

Ya, but fundamentally speaking all business are taxed on income, not revenue. To call CDE a "subsidy" goes against the underlying structure of corporate tax.

Whether its an Albertan drill hole, an Ontario manufacturing plant, or the pencil some Yukon car dealership buys, costs get netted off of revenue to determine taxable income.

If anything, CDE is a "penalty" because costs must be spread out instead of writing it off as it occurs.

Ah well, we digress...

[Frequitude]

Originally Posted by CaptainCrunch

He thinks that he can make that up with the corporate tax cuts.

I'd be interested in seeing if anyone has actually done a study of what would happen to tax revenue and unemployment if you jacked up Corporate tax rates.

Its a pretty slick move targetting the soft NDP'ers. Take from the corporations and give to the people.

I fall on the other side of that one obviously. Give corporations a break and the benefits flow down to the public.

[crazy_eoj]

Originally Posted by Tinordi

What do you mean nothing will be saved? The tax subsidies (ie spending) will be saved. Income taxes from new jobs are essentially revenue neutral.

Spending decisions are based upon the subsidies as they exist.

Likely a huge number of projects will or would not happen without the subsidies, so your 'savings' are nothing on projects that wouldn't happen.

Similar argument to raising royalties; you can't collect the tax on wells that won't be drilled anymore than you can't 'save' subsidies on projects that won't happen.

[CaptainCrunch]

Todays promises

http://www.canada.com/news/Leaders+f...307/story.html

"Every child deserves the best start in life," Ignatieff said on Day 6 of the federal election campaign in announcing $500 million a year for the provinces to create new childcare spaces. The amount would rise to $1 billion annually by the fourth year, he said. "Our party believes passionately that the most important thing a government is investing in is child care."

Details of the pledge were vague, but the Liberals said they were "not ruling out" any plans the provinces suggested.

The money could go toward public or private spaces; it would be up to the provinces to make proposals.

So Liberal spending if my math is right is up to between 2.2 and 2.6 billion

Harper, meanwhile, was focused on a proposed hydroelectric project in Newfoundland and Labrador. But during the morning he was silent on whether the federal government will back it with a loan guarantee.

Harper was to travel to St. John's later in the day, amid reports that the province has reached a deal with the federal government on federal assistance.

If so, that could affect the campaign in Quebec, where the provincial government has had long-standing opposition to the funding because it believes it should also get help with hydroelectric projects.

Newfoundland and Nova Scotia have been seeking federal loan guarantees for the $6.2-billion project that would send power from Labrador's Lower Churchill River to Newfoundland, and on to Nova Scotia via underwater cables across the Gulf of St. Lawrence.

That could cost them in Quebec but help them gain seats in the Maritimes. I'm not sure of the spending increases on the Con side as this is a loan guarantee and the income splitting is 5 years from now. Yesterday they announced new equipment purchase write off incentives to manufacturing

Greener jobs was Jack Layton's theme Thursday. He said he wanted to cancel some $2 billion in subsidies to oil producers and to invest that money into renewable energy projects and green jobs.

Under Layton's plan, $1 billion would go toward projects such as providing Aboriginal communities with solar hot water heaters and helping bring clean technology ideas to market.

Another $500 million will go toward job training for renewable energy researchers, technologists, designers and energy auditors, leaving a surplus of $500 million.

Not a good strategy for the NDP to roll out to oil producing provinces

[CaptainCrunch]

Oh and as the older single childless minority guy, there's nothing in Ignatieff's spending for me.

If he comes out with a porn subsidy maybe I'll listen.

[troutman]

Originally Posted by Frequitude

. Give corporations a break and the benefits flow down to the public.

The obligatory picture: