Budget Officer Questions Government Figures On Corporate Tax Cuts, F-35 Fighter Jets

By Meagan Fitzpatrick, Postmedia News February 25, 2011

OTTAWA — Parliament’s budget watchdog released a report Friday that challenges government figures on corporate tax cuts and profits, and also backs the efforts of opposition MPs who are trying to force the Conservatives to give them more information about the cost of their law-and-order agenda.

The main theme from Kevin Page’s report is that the federal government still hasn’t given him, or the committee, the information they say they need to hold the Conservatives fiscally accountable on crime bill costs, the F-35 fighter jet purchase and costs to the federal treasury of corporate tax cuts.

« The government is not giving Mr. Page or Parliament the information we need to evaluate the efficacy of their programs or proposals, » said Liberal finance critic Scott Brison. « Mr. Page is clear, the government has not fulfilled its constitutional requirements to provide members of Parliament with the information we need to do our jobs. »

In response to a motion passed in October, the government provided some dollar figures related to the 65 jets it plans to buy as part of the multinational Joint Strike Fighter program, and the corporate tax rates, but on the justice legislation, it said a majority of the bills could be implemented « without any incremental fiscal costs » and that any new costs have already been incorporated in the government’s fiscal projections.

The committee then passed another motion in November trying again to get detailed cost analyses on all three issues, and was stymied, which prompted Brison to table a question of privilege in the House of Commons. Under threat from that motion, the government introduced some figures last week — a total of $647 million for five crime bills, for example, and projected corporate profits — but the opposition said the response fell short. House leader John Baird, however, said the government did provide what was asked of it.

Page, meanwhile, was asked to verify what numbers the government has put forward and its claims about the law-and-order bills.

On the justice legislation, Page wrote that he couldn’t determine whether the money has indeed been set aside, as the government has said, and added the data it has introduced is « inadequate. » The lack of information means he can’t assess whether the government’s estimates are reasonable, nor can he come up with his own estimates, Page wrote in his 16-page report.

The few figures released last week by the government didn’t include any analyses or methodologies, Page noted.

On the F-35 procurement deal, which the Liberals have vowed to cancel if elected, in favour of an open bid to replace the military’s fighter jet fleet, Page said there are « insufficiencies » in the government data made public to date.

He also suggested no proof was provided by the government to back up its response that the Joint Strike Fighter program does not require new or unplanned sources of funds.

Page said he plans to release a separate report on the F-35 acquisition in the next few weeks.

The budget officer, who in the past, has been at odds with the government over fiscal evaluations, also calls into question the Finance Department’s estimates on projected corporate profits and the estimated cost of corporate income tax rate cuts, which are shaping up to be a key issue in any upcoming election campaign.

Page’s analysis of the department’s figures indicates the corporate profits may be overstated while the cost of tax cuts may be understated. In 2014, the department estimates corporate profits will be $18.9 billion higher than Page’s own estimate and he says its estimates also don’t match those of leading private-sector economists.

Page and the government also conflict when it comes to the cost of corporate tax cuts. Page estimates them to be several million dollars higher over the next three years than the government does, but he can’t explain the discrepancies because he says he has not been made privy to the Finance Department’s methodology.

Page declined an interview request but he writes in his report that the information sought by the finance committee « constitutes a prime example of the type of information to which Parliament must be free to make reference. »

Brison argues that if the government is so confident in its policies, it should be telling Canadians how much they cost, and it should show how it arrived at the numbers.

« The parliamentary budget officer’s report makes indisputable our argument that the Harper government is not meeting its constitutional requirement and is disrespecting both Parliament and taxpayers, » he said.

Source: montrealgazette.com


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