Plenty of Harper in Trudeau budget

Prime Minister Justin Trudeau tried to make Canadians forget about 10 years of Conservative rule with Tuesday's federal budget but still kept plenty of Stephen Harper around.

Harper dropped the Goods and Services Tax from seven per cent to six per cent in 2006, his first year in power, then to five per cent in 2008. Economists and even members of his own party thought he was crazy because when it comes to taxes, small-c conservatives like consumptive taxes like the GST best. People who spend more money pay more tax, an elegant concept that enjoys broad support across the political spectrum. By its very nature, the GST is a tax on the rich, who spend more money and consume more goods and services than people with less income.

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In other words, Harper slashing the GST was a tax benefit for high-income earners.

Worst of all, with each percentage cut, Harper decreased annual federal government revenues by more than $7 billion.

So take that $30 billion deficit Trudeau brought in Tuesday and cut it in half, simply by restoring the GST to 2006 levels.

Before Rona Ambrose, Todd Doherty and Bob Zimmer get too excited about painting Trudeau as the classic "tax and spend" Liberal, Trudeau just needs to remind the Conservatives about the great prime minister -- Brian Mulroney -- who first introduced the GST to Canada. Most modern countries continue to rely on value-added consumer charges as a fair and efficient taxation system, which is why the Jean Chretien Liberals didn't touch the GST when they swept into office.

This budget is a credit-card budget because it's not being paid for in 2016 but in the years to come. Money was showered to various constituencies across the country Tuesday with no new revenue streams announced to help pay for that largesse. A few minor tax exemptions and loopholes were closed but nothing significant, such as a GST hike, was introduced.

Trudeau can't claim the economy and consumer confidence is too fragile right now to absorb a GST hike, since Canada is not in recession and overall household spending has not decreased. Times are certainly tough in Alberta but the national economy has shown surprising resilience and global energy prices have not only stabilized from the 2015 freefall but have actually increased in recent weeks.

Keeping Harper's GST rate isn't the only part of the Harper Conservatives playbook Trudeau has adopted. Harper was a master at politicizing the budget process by anticipating unreasonably low government revenues and then trumpeting year-end surpluses. Trudeau is shamelessly playing this shell game with taxpayers, as well.

The Liberals anticipate the average price for a barrel of oil in 2016 to be a measly $25, a price it never reached even before the rebound to its current levels around the $40 mark. For every day the price of oil remains over $25, the Liberals will enjoy unanticipated oil revenue, which they can then use at the end of the budget year to demonstrate their prudent management of government coffers.

That's the short game.

The long game is to predict deficits for years to come, while privately betting on significant improvement in global commodity prices and the Canadian dollar from their current doldrums. If that happens, watch for the introduction of a balanced budget in 2020, closely followed by a visit to the governor-general for permission to hold a general election.

Along with the GST and shady revenue forecasting, Trudeau is keeping up Harper's big-talk-no-action policy when it comes to the Canadian military.

Harper showed his love for the Canadian Armed Forces by encouraging everyone to celebrate the bicentennial of the war of 1812, by adding the word "royal" to the official names of the navy and air force, by closing veteran offices and by ignoring the growing number of veterans diagnosed with post-traumatic stress disorder. Harper promised to buy the military new equipment, particularly a modern fighter plane, but never got around to it.

Meanwhile, under his watch, actual military dollars remained frozen at half of what Canada is contractually obligated to spend each year as a member of the North Atlantic Treaty Organization (NATO).

Trudeau's budget is a mirror image of Harper's treatment of the Armed Forces. Trudeau's first budget orders the veterans offices, including the one in Prince George, reopened but puts $3.7 billion aside for new ships, plans and vehicles on indefinite hold. It seems increased infrastructure spending is great for everyone except the Canadian Armed Forces.

Trudeau promised Canadians real change from Harper during the endless election summer of 2015. Turns out he likes Harper's ways more than he let on. Worse, he's shown himself to be like too many politicians in their eagerness to spend money but their unwillingness to implement the necessary tax regime to pay for those programs.

-- Managing editor Neil Godbout

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