Editorial cartoon by Graeme MacKay, The Hamilton Spectator – Tuesday March 31, 2015
Austerity budgets of provinces will offset 75% of Ottawa’s tax cuts: BMO
About three-quarters of the billions in federal tax cuts and increases in benefits promised to Canadians this year will be offset by provincial tax hikes and cutbacks, the Bank of Montreal says.
In a research note early Monday, BMO economist Robert Kavcic calculates that the provincial budgets unveiled in British Columbia, Saskatchewan, Alberta and Quebec have announced a collective $2 billion in new tax hikes on citizens, or cuts to services, to balance the books — part of a new age of austerity prompted by lower oil prices.
By Kavcic’s reckoning, Ottawa has promised a combination of tax cuts and benefit hikes that add up to about $4.5 billion back to Canadians in its current fiscal year.
“It looks like the provinces will take back about three-quarters of it,” he said.
Finance Minister Joe Oliver has delayed releasing the federal government’s budget to give it more time to gauge the impact of oil prices, but a few election-year tax cuts have already been telegraphed. While it’s uncertain what Ottawa has in store, Kavcic says, “most of what Ottawa will be returning to one taxpayer’s pocket, the provinces will take out of the other.”
With debt-laden governments in Ontario and Atlantic Canada yet to telegraph their spending plans, it’s a good bet the theme of austerity will continue, which means even more ways that top-level tax relief will be clawed back in one way or another. (Source: CBC News)
Posted to Yahoo Canada News.