Thursday, September 30, 2010

Tax increase time for Tories?

Update (6:15 p.m.) below.

Postmedia reports yes:
The Harper government is expected to announce Thursday it is lifting its freeze on employment insurance premiums, but not raising them as high as recommended by a rate-setting board appointed by the government.
Essentially the same thing is being reported in the Globe. Much will be made by the government (and sympathetic columnists) of the fact that their EI payroll tax hike is apparently not going to be as much as that recommended by the independent EI panel, that the Harper cabinet will ride to the rescue with a smaller increase. That looks to be the big sell we'll hear, judging by the headlines in those papers and the early spin. But a hike is still a hike that will show up on paycheque stubs across the nation. Every little bit matters these days.

This increase comes as Jim Flaherty reveals that the deficit from last year will exceed $53.8 billion, much higher than the anticipated $47 billion they projected this summer. The deficit increase is being attributed to unforeseen "accounting issues" in the form of having to account for the billions paid to the provinces (B.C. and Ontario) for HST adjustments, all within one financial year. Yes, that sounds unforeseeable, that a major expense like the HST billions would suddenly have to be booked in an entirely different manner than they'd planned, cough, cough.

It should be a difficult moment for a government that has dined out on portraying their opponents as the tax raisers. But watch the big sell.

Update (6:15 p.m.): Tories raise taxes.