• Program spending up 35% in 6 years, outpacing inflation and population growth
• Tax burden borne by Canadians remains unchanged after a decade of Liberal rule
• Employment Insurance cuts welcome, but payroll tax burden remains high
• Move to abolish/phase-out corporate capital tax applauded but must be accelerated
• Action on "flying tax" good first step yet security policy questions remain
• Budget ignores CTF calls for legislated debt reduction further income tax cuts

OTTAWA: The Canadian Taxpayers Federation (CTF) has reacted to Budget 2003 tabled by federal Finance Minister John Manley in the House of Commons this afternoon.

"You don't need to be Columbo to find the Prime Minister's legacy seeking fingerprints all over today's budget," said CTF federal director Walter Robinson. "The nine-year projection from 1996-1997 through to 2004-2005 yields a shocking 46% increase in program spending. Mr. Chretien continues to spend his way into retirement at the expense of hard-working Canadian taxpayers. Mssrs. Chretien and Manley have continued the previous Chretien/Martin binge through the taxpayer stocked candy store."

Program spending is out of control
" Program spending has risen 35% since 1996/1997 and is projected to climb by 26% over the four-year period from fiscal year 2001 to fiscal year 2004." Robinson observed. "This outpaces the combined impact of inflation and population growth over this same period and breaks the government's own Budget 2000 guideline that spending would be limited to inflation and population growth."

While measures to phase out capital taxes - albeit slowly - raise RRSP limits and cut EI taxes next year are welcome, this budget continues to measure government performance by how much the government spends as opposed to evaluating what we're getting for a record levels in program spending."


" Federal personal income taxes as percentage of the economy remain virtually unchanged at 7.40% of GDP, higher than when the Liberals came to power in 1993," said Robinson. And he went further noting: "In fact, Ottawa continues to dine out on individual taxpayers to satiate the lion's share of its overall revenue appetite. In 2003/2004 personal income taxes alone will account for 47.12% of all federal revenues collected, the second highest level they've been at since 1993."

Payroll Taxes: Still Way too High

"The EI payroll tax cut planned for 2004 will save employees $47 and employers $65 per employee at the maximum contribution level. However payroll taxes are still up 40% over the past 12 years," added Robinson. "These are profit-insensitive job killers and certainly do nothing to boost the government's innovation agenda."

Infrastructure Initiatives - The Cities Agenda
The 2003 budget announced an additional $3 billion in infrastructure funding over the next decade including $1 billion for municipal infrastructure. "While the needs for infrastructure improvements in our cities are pressing, a greater deal of accountability for the spending of federal funds is needed," stated Robinson. "Over $8 billion has already been allocated in separate iterations of the Canada Infrastructure Works program, $2 billion was devoted in Budget 2001 to the Strategic Infrastructure Foundation and $250 has been previously announced for municipal green funds. Could someone come forward and tell taxpayers where all this money has gone "

Flying Tax Reduction - Basic Policy Questions Remain Unanswered
In today's federal budget, the government announced that it was reducing the air travellers security charge - commonly referred to as the flying tax - by $5.00 on domestic flights reducing the total domestic round trip charge from $24 to $14.

"Of course we welcome this news but it is akin to making someone miss their flight then offering to buy them a coffee for their troubles," Robinson observed. "This tax was - and still is - a horrendous example of shoddy public policy. The federal government never did explain the difference between improvements that benefited public safety in general and those that were of unique benefit to Canadians that travel by airplane. And of course we must not forget that Ottawa imposed this charge without any impact analyses thus violating its own guidelines. But hey, who cares about the rules when you have taxpayers to fleece "

Child Poverty
Budget 2003 announces a host of measures to address child poverty and family issues including a $935 million five-year national day care strategy. "Again Ottawa thinks it knows best. Instead of these measures and other income support schemes, the federal government should adopt our recommendation to hike the basic personal exemption and spousal exemption to $15,000 over five years," stated Robinson. "This would permanently remove 2.1 million Canadians from the tax rolls and allow lower income Canadian families to the dignity of providing for their families on a daily, weekly and monthly basis as opposed to depending on monthly and quarterly government cheques."

Final Thoughts
" Today's budget is basically a walk through the federal candy store with spending treats for everyone, sadly it is taxpayers that will suffer with fiscal tooth decay," concluded Robinson. "Further debt reduction, gas tax cuts and a fundamental re-think of government will have to wait for a new Liberal leader or a change of government."