By ALEXANDER PANETTA
Wednesday, October 5, 2005 Posted at 5:57 PM EDT
Canadian Press

Ottawa — Every taxpayer in the country will get a cheque from the federal government each year that it posts a larger-than-expected surplus, sources say. The Liberals' Surplus Allocation Act will promise taxpayers a slice of the surplus along with their income-tax return, federal officials told The Canadian Press.

"Canadians would be getting a dividend on the performance of the economy," said one official. The legislation, to be tabled Friday, sets out a broader spending plan for the unplanned surpluses that Ottawa frequently racks up. One-third of all unexpected surpluses will go to debt relief, one-third to program spending and one-third to taxpayers.

The government has drastically underestimated its surpluses since balancing the budget in 1997-98. In one of the most dramatic examples — 2002-03 — Ottawa estimated a $3-billion surplus that ended up at $9.1-billion. Under the proposed formula, the extra $6.1-billion would have been divided three ways, with $2-billion going to taxpayers. That would have provided cheques averaging $133 each for Canada's 15 million taxpayers, depending on their tax brackets. The plan proposes that for those who owe the government money at year's end the surplus bonus will be deducted from what they owe. The bonus money would be added to the cheques of those slated to get money back.

It is unclear whether the legislation will get through Parliament before an election, expected within several months.

Opposition parties have been demanding for years that the government find a more democratic way to allocate surpluses. They have accused the Liberals of short-circuiting democratic debate by racking up giant surpluses and then allocating all the extra money to debt relief at year's end. One high-ranking government source said the Liberals will continue paying down the debt — which stands at almost $500-billion. He said the current debt-to-GDP ratio of 38.7 per cent will continue falling and will meet the 25 per cent target by 2015. "We are in no way detracting from our commitment to debt relief," he said.

The Canadian Taxpayers Federation was unimpressed with the plan, calling it a gimmick leading up to the next election. "Smells fishy to me — smells like election herring," said John Williamson, head of the federation.

"I think Canadian taxpayers would welcome any kind of rebate cheque from the federal government. But ... it's not a real tax cut." He said the more transparent way to proceed would be guaranteeing tax cuts that Canadians could count on every year.

Williamson cited an example from 2004-05, where private-sector forecasters predicted a $7-billion surplus as late as this summer. But the government went on an end-of-year spending spree and wound up with a rare smaller-than-expected surplus of $1.6-billion.

That means taxpayers would have received nothing this year — and would get nothing whenever the government chose to go on a late-year spending spree, Williamson said. But a federal official defended the so-called formula of thirds. "That equal distribution between debt relief, tax relief and program spending just strikes Canadians as a reasonable thing to do," he said.

"This legislation reflects the wishes of Canadians."

Maybe it is. I got a letter from the government today stating that my loans were being slashed. Bring it on! LOL For whatever reason I won't complain.

I want the government to pay me every year just for simply living here... I could grace another country with my presence insted!
;)

At first sentance, I thought this was the most stupid idea possible. It was like the stunt Mike Harris did, and Klien is about to do. A complete waste of resources.

However, upon reading the article further. It makes sense. The reason being is that it is a 1/3rd allocation so that all priorties are being met. Spending, debt reduction, and tax relief. However, unlike true tax relief, it is NOT permanent, meaning that when the economy inevitably declines at a recession, the government is not forced to re-raise taxes, slash spending, or go into deficit.
As it is a on a per year basis and will not even take place in a deficit situation, it makes prudent finances.

However, Canadian Taxpayers Federation is correct. This is merely a gimmick. How many years will the govt actually stick with this 33/33/33% allocation. Probably just once or twice (assuming Lib's are re-elected)

Maybe it is. I got a letter from the government today stating that my loans were being slashed.

I got something like that too. I'm not complaining lol

This year my student loan was about 65-70% grants! I was totally surprised. I’ve never seen so many grants before. Guess the feds and provincial government is finally doing something right about post secondary education.

I SAY THE GOV. SHOULD KEEP THE F@%KING MONEY

here's why...

recently, my fiance and I were jerked around because Revenue Canada thought we were given too much GST Credit.

In a nutshell, we were to give back money that was given to us that we had originally given as taxes. Almost sounded like some kind of pyramid scheme.

What a fucking joke... the beauracracy (sp?) kills me

maybe if they keep my money, the next time our troops hit a desert country, they'll be wearing Khaki, not Forest Green.

:bash: :bash: :bash: :bash: :bash: :bash: :bash: :bash: :bash:

I got something like that too. I'm not complaining lol

This year my student loan was about 65-70% grants! I was totally surprised. I’ve never seen so many grants before. Guess the feds and provincial government is finally doing something right about post secondary education.


Now watch them put up the tuition so those grants won't go as far!! LOL Still thank god for those grants, eh Hamilton? hehe Every bit helps afterall.

I SAY THE GOV. SHOULD KEEP THE F@%KING MONEY

here's why...

recently, my fiance and I were jerked around because Revenue Canada thought we were given too much GST Credit.

In a nutshell, we were to give back money that was given to us that we had originally given as taxes. Almost sounded like some kind of pyramid scheme.

What a fucking joke... the beauracracy (sp?) kills me

maybe if they keep my money, the next time our troops hit a desert country, they'll be wearing Khaki, not Forest Green.

:bash: :bash: :bash: :bash: :bash: :bash: :bash: :bash: :bash:

First of all, you should have demanded to keep the money. Don't EVER give money back to the government, even if they made a mistake and sent you 6 million dollars.
And our troops have desert uniforms!!

First of all, you should have demanded to keep the money. Don't EVER give money back to the government, even if they made a mistake and sent you 6 million dollars.
And our troops have desert uniforms!!

we didn't... we figured out a loophole and took advantage of it. It still caused us alot of stress, as I had just lost my job, we had already forked over a big wad of tax money, and my daughter had just been born. A wee bit of stress we didn't need, but it taught me a lesson about government beauraracracseee (god I have trouble spelling that word, I won't even bother)

Our troops had the wrong uniforms when they first arrived in Afghanistan, didn't they?

Now watch them put up the tuition so those grants won't go as far!! LOL Still thank god for those grants, eh Hamilton? hehe Every bit helps afterall.

I've been told that next year the province will unfreeze the tuition rate :rant: Watch for something like a 25% increase in tuition lol.

Personally I don't have a huge beef against the tuition rate but what really pisses me off is the cost of textbooks. Holy shit there expensive should put a freeze on textbooks cost.

Yes! it's time to rein in those greedy textbook publishers.

They now stuff goodies (unfortunately, many profs use them) in their textbooks and then jack up the price. Now I can't even buy used texts.

Maybe it is. I got a letter from the government today stating that my loans were being slashed. Bring it on! LOL For whatever reason I won't complain.

Must be nice, the government doesn't seem to give these perks to former students AFAIK, I'm still paying as much as my rent every month.

About 2 weeks ago I bought this book that's about 200 pages and the size of a bible. I went up to pay for it and the lady said something like "That will be $210.23 please". My chin dropped right there in shock lol. Think about that almost a dollar a page! And I haven't even used the book yet.

I'd rather see it spent on something more useful. Perhaps RENEWABLE RESOURCES!!!!... duh! Energy Crisis anyone? What the hell is $133 worth anyway? It'll just be spent on sex, booze, and many other great activities. $2billion as a whole goes much further than $133 in everyone's pocket.

Yes to me its stupid. I would rather the government spent that 2 billion in debt repayments. We still owe money guys so lets pay some back and use the intrest savings instead to give away or cut taxes. I think the Klein scheme of using a third of the extra surplus to give cheques was bad but now the feds are doing the same. At least the province is debt free.

Our troops had the wrong uniforms when they first arrived in Afghanistan, didn't they?

Yeah...they did have their forest uniforms on...lol...but that ended quick.

How about 50/50 between debt reduction and social spending. However, there will be no tax cuts or cheques in this scheme

Just to clarify, when I said "renewable resources," I meant renewable energy...same idea though, lol.

Surplus should go to education: McGuinty

CANADIAN PRESS

QUEBEC — A federal plan to cut cheques to Canadian taxpayers out of future, unexpected surpluses amounts to bad financial planning, Ontario Premier Dalton McGuinty said today.

"I think it's bad public policy to paint yourself into that corner and give up any flexibility you might need in this world where the only constant appears to be change," McGuinty said following a meeting on post-secondary education.

The federal Liberals will table the Surplus Allocation Act tomorrow, a bill that will commit one-third of all unexpected surpluses to debt relief, one-third to program spending and one-third to taxpayers.

Quebec Premier Jean Charest said the federal government has underestimated revenue by $100 billion over the past 10 years.

If Ottawa is awash in cash, the money should go instead toward filling the financial shortfall of provinces, particularly in post-secondary education, according to McGuinty and Charest.

"How many times over that period have you heard them tell us the surplus won't be that big?" Charest said.

``This is a movie that they have played every year for 10 years. When I hear this trial balloon, they are confirming they have the money."

The premiers met with provincial ministers in charge of education and finance to set out a plan to pry more money out of the federal government for post-secondary learning. They have set out an initial benchmark of a $2.2 billion annual boost to bring funding to 1995 levels.

They also set out a series of meetings to forge a plan to get the money. With a federal election looming and the Liberal government handing out cash to Canadians, McGuinty said he isn't worried the money will all be spent before the provinces are ready to act.

"I don't believe the money is all spoken for, I think there are considerable surplus dollars that are going to be available for an extended period of time," McGuinty said.

Quebec has long complained of a so-called fiscal imbalance which allows Ottawa to rack up surpluses while provinces struggle to balance budgets and provide the bulk of services, such as education. Ontario recently raised the same complaint.

The provinces say boosting transfers from the federal government is the answer. Critics argue the provinces should raise their taxes to correct the imbalance.

Charest said the provinces have made progress getting more money from Ottawa for health care and day care. He said he's hopeful Prime Minister Paul Martin will see the political advantage of giving a similar boost in education.

I'd rather see the surpluses given back to the provinces that fund net equalization. But if that the case, no doubt the feds would start spending even more frivoulously.

I just have a real problem with the feds buying votes in this manner especially when we have a debt of 500 billion

It is important not to make programs we cannot afford after the one year.
I think that the government should make one time infastructure announcements.
Just one year cash to the CITIES and they can use it not for ongoing expenses as it may not be there next year but things that only require one cheque.
For example bus/rapid transit fleet renewal, one time sewage update, community centres, library expansions. Anything they want where they are given the cheque for a one time purchase. If they have a surplus next year they could do the same thing.

Yes i understand the issue with the program spending. But I would rather they did that with the intrest savings from the debt and continue to speed up debt repayment. It would do wonders if we didn't have the debt at the federal level as the intrest payments still take up a huge portion of federal spending.