Look for tax cuts today

They cut everything a little, no focus.

I wanted to see substantial cuts to the debt. Reduce the debt while surpluses exist.
� GST reduced to 5% effective January 1, 2008
� basic personal exemption increased from $8,900 to $9,600 retroactive to January 1, 2007
� further increased of the basic personal exemption to $10,100 effective January 1, 2009
� personal income tax rate cut from 15.5% to 15% retroactive to January 1, 2007
(this undoes their hike)
� corporate income tax rate cut from 21.5% to 19.5% cut effective 2008, and will be cut in steps to 15% by 2012
� small business income tax cut to 11% in 2008

He mentioned specifically that the GST rebate won't be eliminated, and the GST credit on new home purchases won't be reduced. All this and they promise to reduce the debt by $10 billion this fiscal year.

It all sounds good, but eliminating the $467.5 billion debt will take a bit more. The outstanding debt as of the end of fiscal year 2004-05 is a moving target; the Liberals told me in December 2005 it stood at $499, but the 2006 budget said the 2004-05 debt was $494.4 billion, then the 2007 budget said the debt for 2004-05 was $494.7 billion. The figure for 2005-06 in the last budget was $481.5 billion. Using that last figure and the 2005-06 debt payment of $14 billion, a mortgage calculation to pay off the debt by the end of 2021 would require a payment this year of $17.8 billion. For 2008-09 it would require $19 billion. That keeps the total of interest plus payment to the principle a fixed total every year. Their $10 billion payment for this year will be just a little better than half that. Truly substantial tax cuts won't happen as long as the debt remains.

Jim Flaherty also claimed he was cutting spending vs the previous Liberal government. However, spending for 2004-05 was $176.4 billion, and for 2005-06 was $175.2 billion. Those were the last two Liberal years, the Conservative budget didn't kick-in until March 2006, the start of the 2006-07 fiscal year. Spending under the Conservatives is budgeted as 2006-07 $189.0 billion, for 2007-08 $199.6 billion, and for 2008-09 $206.8 billion. While Liberal spending continued to decline, Conservative spending is higher and continuing to increase. If Jim Flaherty wants to cut spending, he has to start with his own budgets.

They're expecting to reduce the surplus to $2 billion for next year. That means no more debt reduction.