Federal Finance Minister, Jim Flaherty, announced his fall financial update this week. In reality it was more of a mini-budget but the conservatives aren't admitting as much.
The "update" will see a further 1% cut in the GST, personal and corporate income tax cuts and a small reduction in EI premiums for business and individuals. The most interesting part of the announcement is that the personal tax cuts are retroactive to January of 2007 meaning that they affect this year's tax returns and the GST cut takes effect on January 1.
It seems Stephen Harper has made up his mind to force an election in the spring or early summer. Most likely they'll accomplish this by structuring the March budget in a way that it offers a few more tax breaks they can run on yet includes something that even the Liberals, as desperate as they are to avoid an election, will not be able to sit by and take a pass on.
All the signs are there.
A week ago, the Finance Minister was all over the news presenting himself as a champion for consumers after Canadians vented frustration because a high Canadian dollar was not being reflected in prices at the checkout.
The truth is that Flaherty did nothing to change this reality but by spring many prices will be in the process of falling naturally as old inventories work their way through the system and as retailers, hit by low Christmas sales, begin to force prices down. Whether a natural process or not, thanks to Flaherty's antics, the Conservative party is likely hoping for a bump when prices begin to fall in a few months.
In addition, the retroactive tax cuts announced this week will mean that spring is also the time when many taxpayers will receive a bigger tax refund than they would have otherwise. Spring is also the traditional time of year when large numbers of people consider two of the biggest purchases any of us ever make, automobiles and homes. Though the GST cut introduced this week will save the average buyer very little, anyone buying big ticket items will see substantial savings at a very opportune time for the Harper government.
The conservatives appear to be strategically aligning their stars in order to best position themselves for a spring majority election win.
As one opposition MP recently put it recently, "Don't be fooled and make no mistake, the conservatives claim to be governing but they aren't. In reality they've been campaigning ever since the last election."
I guess it's nothing new under the sun for a government to buy votes with the taxpayer's own money, but the conservatives are clearly more strategic, calculating and subtle about it than governments have been before them.
