Last week the Canadian Taxpayers Federation (CTF) made its annual trek to the House of Commons Finance Committee to participate in the committee's annual national pre-budget consultation.

Unlike previous years when the committee's report - habitually released in early December - has been viewed as the first insight into the following February budget themes and direction, a cloud of uncertainty hangs over this year's process. From the lackadaisical attendance and questioning of MPs to a noticeable lack of media interest, the hard work that groups from across the political spectrum have put into these submissions may all be for naught.

It is another example of the dysfunctional and surreal climate in official Ottawa given the ongoing power game within the government, from parallel caucus meetings to dueling PMOs to competing news conferences - it's brings a whole new meaning to government overlap and duplication.

And it's patently unfair to Canadians.
The wheels of government have ground to a halt - although in some corners this is seen as a good thing (think no more corporate welfare announcements) - and advocacy efforts aimed at changing public policy from committee testimony to meetings with bureaucrats and politicians are best described as long shots for successful outcomes.

Nonetheless, the CTF made its pre-budget submission to the Finance Committee. The main recommendation in this year's submission is to:

Increase the basic personal exemption (BPE) from the 2004 target of $8,000 to $15,000 by 2008. Coupled with a consequent increase in the spousal exemption, this would remove 2.1 million Canadians from the tax rolls, mostly lower income and working-poor Canadians.

This proposal is both affordable and practical. It represents the next front in the battle for tax relief and similar to the government's decision in 2000 to re-index the tax system for inflation thereby ending "bracket creep", represents the ideal combination of good fiscal and great social policy.

If the BPE had been indexed since the inception of the federal income tax back in 1917 (BPE = $1,500), it would be over $20,000 today.

Other proposals in this year's CTF pre-budget submission include:

Abolition of wasteful corporate welfare programs (e.g.: Technology Partnerships Canada) and grants and contributions to business deliver through regional development agencies which tally over $4 billion each year.

Instituting a legislated scheduled of annual debt reduction payments equivalent to 5% of every tax dollar collected.

Ending $750 million in annual EI and CPP over-contributions paid by employers.

Plowing 50% of federal gas tax collections - $2.2 billion annually - back into roads and infrastructure in Canada's cities and towns; and

Limiting increases in overall annual federal expenditures to a maximum amount of inflation plus population growth.

If and when a federal budget is delivered, fiscal prudence should be the guiding principle for Paul Martin and his Finance Minister. Above all else, Mr. Martin should heed the words of Winston Churchill from a century ago:

"We contend that for a nation to try and tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle."