Responsible Leadership

On Thursday the Globe & Mail reported that Stephen Harper's Prorogressive Conservative government is projecting significant drops in corporate income tax revenue over the next few years. Ottawa now expects its revenue from corporate income tax to fall by $6.5 billion from 2008 to 2009, and by a further $1 billion in 2010.

The reason for this alarming "wallop" to corporate income tax revenue, according to corporate economists and the Globe, is hardship and "plunging profits" in the banking and oil sectors resulting from the current global economic slowdown. No mention is given to the acceleration and deepening of corporate income tax cuts since 2007 under the Harper government, or the unprecedented cuts planned over the next few years.

According to the government's "Budget Plan 2008: Responsible Leadership," its "historic broad based" corporate tax reductions "will provide over $50 billion in tax relief to Canadian businesses over this and the next five fiscal years." In 2008-09 alone, says the budget plan, the Harper government's corporate tax cuts will provide "tax relief totaling $5.2 billion."

It would appear, then, that for the most part the Conservatives themselves are the mechanics of, what the Globe calls, the government's "stalling" corporate "tax engine."

The Globe notes that with the tax engine stalling, "policy analysts are focusing on how the government can...stimulate growth in the corporate sector." No doubt those analysts will be recommending further corporate tax cuts.