Friday, August 7, 2009

Promises, Promises...

Source: CTV NEWS: Renovation Tax Credit not yet Approved: Expert

Here's a scenario for you all; you're sitting at home on a weekday night, watching some television after a hard day's work or play or what have you. Your show takes a commercial break, and suddenly there is a happy couple telling you about the Tax Renovation Credit and how it helped them get up to $1,350 dollars back from their renovation.

The commercial ends with a friendly voice over telling you all about how the Renovation Credit is all part 'of Canada's economic action plan' and tells you where to find more information. Well, according to an expert, there is a key piece of information that they are leaving out: This program has not yet been approved by Parliament.

Yes, that's right; a program which is being given massive television screen time (personally, I see this commercial about 2 - 4 times a day, depending what channel I'm on) has yet to actually be legally put into effect.

To compound matters, the ruling Conservatives seem to be neglecting this fact. Our illustrious Prime Minister has gone on the record saying that 'there's no better time to renovate your home' than now, a message which seems to refer to this program. Has no one told the PM that the program isn't legally active yet?

Allow me to try and put some perspective on this:

Let's say instead of a commercial for a tax credit; it is a movie trailer. The movie looks like something you'd like to go and see this weekend, but then it ends by telling you that it doesn't open in theatres until 2010.

Now, consider it without that warning and to make it worse, theatres are already selling tickets. You buy one, or several, and then read closely in the fine print that the movie isn't in theatres until 2010. Now, this is a bit of ridiculous example, I'll admit, but it does prove my point.

Most people wouldn't rush out and buy something that they're not going to be able to use for a little over a year; with the exception of die-hard fans for a very anticipated movie, for example.

By not telling Canadians that the tax credit isn't actually approved, this leaves Canadians in a bit of a jam. Someone may decide and agree with our PM that now is a great time to redo the plumbing in the bathroom, or adding on that garage; and they will spend money on those projects expecting to get some of it back through taxes.

However, there is no guarantee that Revenue Canada will honour these tax credits given that they are not legally bound to do so. After all, since the law isn't on the books there is no rules that really govern them about how to proceed. Sure, it's all there in the bill, but that's not legally binding and could change by the time the bill is actually passed.

So, if Revenue Canada wanted to play it safe, what would they do? Deny, deny, deny (to borrow a phrase from Nova Scotian singer-songwriter Joel Plaskett) the claims and reject the tax credit for those who apply for it.

But, I hear you asking, why would the Conservatives spend all this money advertising and why would Harper add his two-cents if the program isn't actually working yet?

I'm glad you asked.

Since the economic crisis began, the Conservatives have taken the typical laissez faire attitude in regards to economics. The idea that the market is self-regulating and will eventually work itself out; the idea that markets have highs and lows, and that we are simply experiencing a natural downturn that will eventually change on its own.

That sounds silly, doesn't it?

Of course, Her Majesty's Loyal Opposition weren't too happy with this classical Liberal view and began to demand the government act to 'right the ship' so to speak. Eventually, the government agreed to spend money on stimulus spending and various programs to keep Canada from being swept under financially.

Since the dawn of the announcement, there has been nothing but debate. The Liberals demanded Economic Updates in the House of Commons to see how this stimulus money was coming along; while everyone else continued to say that the money wasn't coming fast enough or wasn't being spent in the right places.

You know there's trouble when programs that would qualify for public works money (such as railways) are denied the funding they've applied for, and many others outside of Parliament continue to say that the money is not being approved or provided fast enough, and that there isn't even enough of the money to begin with.

John Baird, Jim Prentice, Jim Flaherty, and even Stephen Harper have likely heard these complaints at one point or another.

And speaking of points, here's mine.

The reason why the Conservatives are advertising this renovation tax credit is a ruse; a simple means of showing Canadians what they are doing during these tough economic times. It's a simple idea and a simple gesture to show their 'good governance' and provide Canadians (who were faced many times with threat of an election) a reason to vote Conservative.

To put that simply; the Conservatives are hyping this tax credit as proof of why they should be in government.

But now that the truth has come out, will the bubble burst?

That remains to be seen. What doesn't remain to be seen however is the ever growing possibility that those who take advantage of this not yet approved tax credit could see themselves paying more than they bargained for when their tax credit is denied.

And in that case, the Conservatives, much like those home owners, are going to find themselves paying for their policies.

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