Who knew that Paul Martin's Canada had something in common with Victorian England On Friday, Finance Minister Ralph Goodale treated taxpayers just like Oliver Twist, working them to the bone, doling out barely a dollop of tax relief and expecting gratitude (read votes) in return. He tabled the Surplus Allocation Act, whereby the federal government promises to "give back" one-third of any future surpluses remaining at the end of the year. That is, if the surplus exceeds the $3-billion contingency set in the budget every year. The remaining two-thirds will go to new spending and to pay down Canada $496-billion national debt.

At a time when taxes consume close to half of the average family's income, when Canadians work from Jan. 1 to June 25 just to pay the tax man (Tax Freedom day arrives on June 26), and when the government is awash in gas tax and GST revenue, the Surplus Allocation Act is little more than a pre-election gimmick and an insult to taxpayers, plain and simple. Since the budget was balanced in 1998, Ottawa has amassed multi-billion dollar surpluses. But instead of returning that money to taxpayers, the Liberals would rather keep on collecting it so they can dole it out as they see fit.

What's wrong with rebating taxes based on future surpluses Let us count the ways.

First, over the past seven years, successive Liberal governments have shown a complete inability to estimate Canada's surpluses. Traditionally, they have underestimated surplus numbers and ended up looking like incompetent forecasters at the fiscal year end. Wisely, the excess money was used to pay down some of Canada's debt. But if Ottawa cannot predict surpluses, then this new plan means taxpayers have no guarantee of tax relief.

Canadian families should be able to know how any tax-relief package will help their home budgets. However, Mr. Goodale's plan presents them with an empty promise: If there is no surplus left at the end of the day, taxpayers get squat.

Second, the proposed law will allow the federal government to spend down any expected surplus over the course of the year to ensure that nothing is left to pay back taxpayers. Instead of giving taxpayers a break up front, money will be spent on more pre-election goodies, corporate welfare boondoggles and other wasteful projects. Instead of allowing taxpayers to keep their hard-earned dollars, government will keep tax rates high and spend what it collects.

Third, despite Mr. Goodale's insistence that the surplus split is "a third, a third, a third," an explanatory document provided by his office states otherwise: "The guiding principle will be to allocate the unanticipated surplus equally among these priorities, but the precise allocation could vary in any given year according to the absolute size of the funds available and government priorities." In other words, the Liberals are committing themselves to nothing at all.

Finally, even if taxpayers do get a refund cheque -- which will likely come every four years, just prior to an election -- the amount will be minimal. This is because taxes will only be returned to the extent the surplus exceeds $3-billion. This means that, for the year 2003, when the surplus topped $9-billion, Canada's 15.5 million taxpayers would each have received an average of $130. If all tax filers are included in the rebate scheme, the amount drops to less than $90 per person. Last year, taxpayers would have received nothing. That is because spending under Messrs. Martin and Goodale jumped by an astounding 15%, or $21-billion, and the surplus came in at a mere $1.6-billion.

The Liberals should instead follow up on the successful five-year tax-relief plan rolled out by the Chretien government in 2000 and offer Canadians meaningful tax relief to all income earners. They should begin by increasing the basic personal exemption to $15,000 over the next five years. This change would take over one million low-income Canadians off the tax rolls altogether. At the same time, both the top two income tax rates of 29% and 26% should each drop by three points over three years. This will return surplus money to Canadians and bring Canada's tax rates more in line with those of our neighbour to the south.

Most Canadians understand that "surplus" is just a fancy word for over-taxation. So when will Ottawa realize that taxpayers' money is not theirs to give back, but something they should not be taking in the first place

The Liberals' Surplus Allocation Act is a phantom tax break that can neither be measured nor predicted. Like Oliver Twist's empty bowl, this plan is an empty promise and very thin gruel.