GST tax cuts and "Trickle Down Economics"

Is anyone else concerned when they see the upper-tier governments post HUGE budget surpluses, while we here at the municipal levels can't afford to replace our water mains?

Barbara Yaffe had an excellent op-ed in this weekend's Windsor Star that helps link the two issues.

While the municipalities struggle with providing the basic requirements to live, only receiving $0.08 out of every dollar, our federal government is posting $13 billion surpluses and passing out tax cuts like Hallowe'en candy.

Canadian Federation of Municipalities president Gord Steeves pulled no punches in this press release, following Finance Minister Jim Flaherty's October 30 economic statement;

"The federal government obviously has room to cut taxes and invest in our cities and communities. Even after all the debt payments and tax cuts announced today, the government will still have $26 billion more than it needs over the next six years.

If the Government really wants to provide Canadians with tax relief, it should start by sharing the equivalent of one cent of the GST with cities and communities and making the gas-tax transfer permanent.

By providing cities and communities with more resources to meet growing needs, this would take the pressure off the property tax—the most regressive tax we have. This would also help our cities and communities compete with the best in the world, providing a sound basis for Canada’s future prosperity.

This year’s $13.8-billion federal surplus showed the government has been collecting more tax than it needed. The cost of not renewing our municipal infrastructure —pushed off the balance sheet where we can’t see it—is a massive municipal infrastructure deficit pegged at between $60 and $100 billion.

The government has so far failed to tackle this deficit, one of the most critical issues facing Canada’s cities and communities, with a long-term plan and commitment. The government’s Budget 2007 infrastructure investment of approximately $18 billion over seven years is important, but it pales when compared with the massive and growing municipal infrastructure deficit.

Today’s actions by the government leave this deficit untouched and continuing to grow, and the longer we fail to tackle it, the greater the cost when we finally do. Declaring victory and walking away from the battleground will not fix our cities. We need a plan, and we need long-term commitment.”

Think of this as we enjoy our GST cut. I think that I would prefer to spend my tax dollars on what's important to my family and my community. The first place I would start is to preserve an affordable flow of water into my house and alleviate the sewers backing up into my basement.

I would gladly forego a cut in GST for that.