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Guts, glory and the longest-standing Mayor By Linda Leatherdale Oct. 1, 2009 — I am sitting across the table from a woman I hold in awe, and wondering how different Canada might be if she was Prime Minister. It blows the mind that Hazel McCallion — one of the greatest Mayors on the face of the earth — is 88 years old, has more energy than many 40 year olds and shows no sign of slowing down. “I'm going for another term as long as my health holds,” the feisty Mississauga Mayor tells me, her cell phone ringing non-stop throughout our lunch. Yet, though she takes every call, her train of thought never wanes. It also blows the mind that this powerful woman came into the world at a time when women were fighting for the right to vote and the freedom of no longer being considered second-class citizens. McCallion was born on Feb. 14, 1921 — only a few years after Manitoba became the first province to give women the right to vote in 1916, with other provinces following the lead from 1916 to 1925. But not her native Quebec (Hazel was born in Port Daniel on the Gaspe Coast of Quebec.) It wasn't until 1940, Quebec gave women the right to vote — and not long after Hazel moved to Toronto, where she would meet Sam McCallion, settle in Streetsville and bear three children. She resides in Streetsville to this day, though Sam has since passed away. Though not a die-hard feminist, it's a no brainer Hurricane Hazel would have been at the forefront of this female revolution, had she been old enough to join in back then. That's just her way: Fighting for what is right. Today, it's a power plant crisis that has her back up. And in her usual style, she's up for a fight and never suffers fools gladly. “Tell me that again,” she presses an aide, who's just advised her that both Ontario's Energy Minister George Smitherman and Environment Minister John Gerretsen confirmed they will not show up for a Monday night town hall meeting where angry citizens are expected to vent their opposition to Premier Dalton McGuinty's plan to build a $1-billion, 850-megawatt gas-fired power in Clarkson, in Hazel's riding. “This is political suicide,” cautions McCallion, as she prepares a tersely-worded email to McGuinty where she'll warn hiding is not the answer. In the end, McGuinty sent in Ontario Power Generation's vice-president of communications, Ben Chin, to face the wrath of the people. But not before McCallion fired a shot over his bow, announcing Ontario's chief medical officer of health Dr. Alene King had agreed to investigate the impact on people's health, where pollution is already a burning issue in this pollution-stressed area. McCallion wants McGuinty to kill the project. So, too does a growing grassroots group of citizens from Mississauga and nearby Oakville. And they're spitting nails over some compromises being floated. One comes from Oakville Mayor Rob Burton, who suggests he'll support the plan if two units of pollution are cut for every one unit of new pollution from the power plant. “It's preposterous. It defies the laws of mathematics and physics,” complained a spokesperson from MIRANET, a coalition of 25 citizens' group. She pointed out there are 57 industries in the area and even if all of them were closed, you couldn't do the two-for-one trade because of pollution from other sources, like cross border and air/highway traffic. McCallion, meanwhile, is adamant: “We're not prepared to gamble with the health of our citizens.” What sets McCallion apart from so many is she is loyal to her gut instincts and lives by common sense — and that means staying apolitical, no matter the issue. Believe me, in her 33 years of holding office, she's dealt with many burning issues, each one with its own political agenda. “Basically, I am a Conservative with a Liberal point of view and social conscience, who is looking for a lot of reform in government,” she explains. McCallion voices disappointment that “common sense” left Mike Harris Tories' Common Sense revolution to usher in a number of bone-head policies, like the amalgamation of cities and the downloading of social services costs. “We will never recover from downloading,” she says. But rather than looking for hand-outs, McCallion prefers to run a tight ship and prides herself that Mississauga has remained debt-free since 1978. At the same time, despite infrastructure challenges and battles over use of GST money — McCallion has grown Mississauga from a small collection of towns and villages into the sixth largest city in Canada, with a enviable mix of commercial, residential, industrial and recreational areas. “I think we give value for tax dollars, we run our city like a business,” says McCallion, who also takes pride of “no waste” at City Hall, which is contrary to the City of Toronto where exposing waste of money has become a daily political sport, while debt skyrockets and the people are taxed to death. McCallion is also a believer in true democracy, and government for the people and by the people. That is why she was the first Mayor of a major municipality to submit its annual operating budget to residents for their input and scrutiny. Bottomline is she realizes tax dollars are the hard-earned money of her constituents. “I only spend taxpayer's money, like I spend my own,” says McCallion, who admits to being frugal. Now, she's worried how harmonization of the 5% GST with Ontario's 8% PST will impact families — as a new 13% tax hits many items, like gasoline, heating fuel, running shoes, hydro, home renovations, even funerals, when the HST hits in July 2010. “It's the wrong tax at the wrong time,” she says, pointing out Ontario's economy is still bleeding from a high dollar, fallout from a severe U.S. recession and the subprime crisis, a crippled auto industry, etc. — which has reduced the once manufacturing envy of the world into a have-not province. She also worries about the sad state of family finances, record household debt, and warnings that one missed paycheque could push many families over the edge. Closer to home, she finds it ludricrous that after Mississauga reached out to lower-income families to give them a break on the cost of recreational facilities, these fees will now be hit with a 13% tax. As for our new global world, McCallion is an advocate of “fair trade” not just “free trade.” She understands good jobs and a healthy middle class is key to a free democratic capitalist society — not growing the gap between the rich and the poor with casino capitalism and greed. So, I wonder — as our country digs itself deeper into debt and power-hungry politicians keep their fingers on the election trigger —what would Canada be like if Hazel McCallion was the Prime Minister? A better place? Bet on it. Linda Leatherdale is one of Canada's most trusted financial journalists. She is also Vice-President of Marketing and Business Development for Cambria, a leading manufacturer of natural quartz surfaces. (www.cambriacanada.com)
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Are we out of recession or not? This is Leatherdale's August column for Canadian Business Journal. Check out the online magazine at www.canadianbusinessjournal.ca By LINDA LEATHERDALE August 1, 2009 — Oh, those Fools on the Hill. And the spin they try to sucker Canadians into believing. But don't be fooled. As the Beatles' song goes: “Head in a cloud, the man of a thousand voices talking perfectly loud. But nobody ever hears him .... they can see that he's just a fool.” Need I remind you? “This country will not go into recession next year and will lead the G7 countries.” Those are the words of Finance Minister Jim Flaherty. The date was Oct. 9, 2008. A few days earlier, on Oct. 6, Prime Minister Stephen Harper declared: “We will not run a deficit.” But as the world was spinnin' deeper into the darkest economic contraction since the Great Depression, just as I predicted in my “Economic Armageddon” column almost a year earlier — the fools, who daren't utter the R-word, were suddenly trying to dig themselves out. “We may well be in a technical recession,” admitted PM Harper on Nov. 15, 2008. And on Nov. 23, his financial sidekick, Flaherty, finally warned dark storm clouds were raining on Canada's economic parade. Yet, still they stuck to their line of no deficits and the creation of 190,000 new jobs by 2010, as they preached Canada was the one global nation that could withstand a recession. Now, fast forward to the summer that never was as dark storm clouds rain Canadians' vacation parade: The promise of no deficits was quickly zapped with Ottawa's coffers $50 billion in the hole, as taxpayers forked out billions to prop up banks and bail out auto giants. Combined annual deficits are now expected to swell to a whopping $159 billion by 2014. That's a far cry from the $4.2 billion surplus the fools predicted for 2012-2013. Meanwhile, Canada's economy shed 454,000 positions since Oct. 2009 — pushing the unemployment rate to 8.6%, an 11-year high. At the same time, the number of Canadians collecting EI (Employment Insurance) benefits jumped an alarming 55.6%, or by 278,300 to almost 800,000. The biggest jumps were in oil-rich Alberta, up 16.8% and Ontario's hard-hit manufacturing economy, up 16%. Yet, the fools can't seem to help themselves. So, here we go again with more spin. “The recession is over,” declares some of the same political pundits who wouldn't dare utter the “R” word in the first place. First it was the Bank of Canada officially declaring the recession is essentially over, while predicting our economy will start growing this summer to lead most of the industrialized world next year, after suffering nine months of stagnation. “We believe the economy will grow this quarter,” said Bank of Canada Governor Mark Carney. “Things are unfolding a little faster in terms of the recovery in confidence and financial conditions.” Canada's central bank is predicting annualized growth of 1.3% for this year — while the trendsetting bank rate sits at a record low of 0.25% at least until mid-2010. A low bank rate makes borrowing dirt cheap, which should stimulate the economy. But it's a killer for seniors who've fled the stock market and socked money into safe, interest-bearing vehicles — as they fight to keep their pension money from going up in smoke with more and more wind-ups and businesses going under. The low bank rate may also explain why pockets of Canada's real estate sector are back to red-hot record levels, with June the best month on record for the Toronto Real Estate Board. Even in Vancouver, where condo projects are going broke before the shovel hits the ground, the market is scoring impressive gains. Who can resist buying in at bargain basement prices? Or is it buyers are getting out their chequebooks before the hated GST/PST harmonization hits the real estate market, pushing affordability further out of reach? Though homes valued under $400,000 will be exempt from the blended tax to hit in Ontario in July 2010, Ontario's Building Industry and Land Development (BILD) Association estimates harmonization will add more than $46,000 to the price of a $580,000 new home in Toronto. Believe me, in high-priced Toronto, a $580,000 home is no mansion. Tax harmonization has been vehmently opposed. In fact, during a heated Ontario Tory leadership race debate, all four candidates, including Flaherty's wife, Christine Elliott, signed a petition demanding leaders back off blending Ontario 8% provincial sales tax with Ottawa's 5% goods and service tax — meaning a host of services never taxed before would now by hit with a 13% whammy. Spin doctors want you believe this is an evil idea from loonie left provincial leaders, or misguided bunk from corporate pundits that combining two sales tax regimes will ease the administrative nightmare for businesses, even though it hurts the very consumer they count on to buy their goods amd services. Yet, buried in federal budget numbers is the $4.3 billion Flaherty has earmarked to blend the two taxes, as harmonization began on East Coast a few years ago and is now being pushed coast to coast, with B.C. even contemplating it. The only province unscathed is Alberta where there is no sales tax. Bottomline is the last thing over-taxed, overly-indebted Canadians need right now are higher taxes, even though in fairness Flaherty has cut taxes, with Tax Freedom Day now falling in early June. Which leads to this: Is this spin, or finally have the fools come to their senses? Both Flaherty and Harper are now cautioning Canadians not to be overly optimistic that the recession is over, even though the Conference Board of Canada jumped on the bandwagon predicting Ontario's battered economy will grow by 3.1% in 2010, after shrinking by 3% this year. Scotia Economics is also optimistic, predicting Ontario — once Canada's economic engine and now a have-not province — will enjoy 2.2% growth next year. “I know there are some signs of optimism,” said Harper, but he cautions, “the so-called recovery at this point is extremely fragile. We're still in the middle of a major global economic crisis, the biggest economic crisis since the Second World War.” Flaherty is echoing Harper's sentiment. It's just too early to say the recession is over. Meanwhile, the latest recession map by Moody's Economy.com has most of the globe drowning in a sea of red, including Canada. The Economist (www.economist.com), commenting on the Moody's map, reports that all of North America is in recession. In Europe, only Norway, Slovenia and Slovakia have avoided recession, though Moody's believes these countries are on the brink. Small export-led economies of Singapore and Hong Kong are shrinking, as are Malaysia and Thailand. Brazil and Russia are suffering downturns. South Africa is also in a recession. The only bright spots appear to be China and India, says The Economist. That could be a silver lining, except for one thing. China is heavily subsidizing many industries, including oil, automotive, mining and now the latest fad. According to media reports, Canada's home-grown granite industry is getting slaughtered by government subsidization and cheap labour in China, even though we're rich in the resource. Media reports say production costs are so low in China and government assistance so generous, Chinese firms can buy granite from around the world, including Canada, ship it to their country, cut it into finished products and ship it back, and still sell 40% cheaper. So, here's my spin, and this spin I believe: If we are to come out this mess in our new global trading world, we need “fair trade.” Not just free trade. But that's a whole other column. Linda Leatherdale is one of Canada's most trusted financial columnists, who can be read at lindaleatherdale.com. She is also Vice-President, Marketing and Business Development in Canada for Cambria, North America's leading manufacturer of natural quartz products. |
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Higher taxes last thing Canada needs This is my July column for online magazine, The Canadian Business Journal. To check it out, go to canadianbusinessjournal.ca BY LINDA LEATHERDALE July 1, 2009 — Oh Canada — we live in a great country. Or as rockabilly icon Rompin Ronnie Hawkins says, Canada is the “promised land.” In his newest song, Ole Love, to be released soon, the rock 'n roll legend who lit up Toronto's Yonge Street in the 1960s and 70s, pours out his love for Canada, which he made his home after moving from Bill Clinton's Arkansas to find fame and fortune. It's true, Canadians can pride themselves on living in one of the wealthiest nations in the world, as well as enjoying one of the highest levels of economic freedom. But, Canada is also home to big governments, big bureaucracies and big oligopolies, all with a big price. As the slogan goes, “Tax Me, I'm Canadian.” Advocates of lower taxes and smaller governments claim the more money you leave in consumers pockets, the better the economy. And hence, governments will net more tax revenue – particularly when all sectors are firing on all cylinders. But, like every other developed nation, Canada has been hit hard by a global economic tsnaumi, sparked by greed and corruption in the U.S. subprime lending crisis, plus fallout from yet another world energy shock with black gold hitting a record US$147 a barrel last July. This year, Canada will be lucky to see 0.5% GDP (gross domestic product) growth — the lowest in 60 years, while doomsayers warn it's not the GR (global recession) word we need to fear, but GD (global depression). So, it boggles the mind that political leaders remain determined to lift more money from the pockets of hardworking families, many who've been hit with a job loss, as pink slips replace pay hikes and Freedom 55 is a boot out the corporate door on your 55th birthday. Bottom line is we are over-taxed, with an average Canadian family earning $88,432 this year paying out $37,699 in total taxes. That's a obscene tax rate of 42.6%. Or put another way, we have to work until June 6 to hand over our pay to foot the tax bill, meaning we're working for the taxman for almost six months of the year, then we get to keep our hard-earned money. Meanwhile, south of the border, Tax Freedom Day for our largest trading partner, the U.S., falls on April 13, for a total tax rate of 28.2%. To see just how highly taxed Canadians are, go the Fraser Institute's website, www.fraserinstitute.org to view a video. It may be humourous, but believe it's no laughing matter. If there is a silver lining it's that Tax Freedom Day now falls on June 6, which makes us better off than a few years ago when it fell on June 21. Federal finance minister Jim Flaherty, the hard-nosed Tory finance minister from the days of Ontario's Common Sense Revolution who believes in lower taxation, credits his cut in the hated GST (goods and services tax) from 7% to 5%, plus cuts in personal income taxes, the new child tax credit, pension income splitting, seniors' tax savings, his new tax free savings account, plus other tax saving initiatives like the home renovation tax credit. But while Flaherty speaks of the benefits of lower taxes, he's behind a push for all provinces to follow the lead of the East Coast, and harmonize that hated GST with provincial sales taxes. Lobby groups, like the Ontario Chamber of Commerce, want us to believe this move will be good for businesses. Afterall, in 1990 when Brian Mulroney's Conservatives refused to listen to 90% of Canadians who said “no” to a GST or value-added tax — Canada became the only nation in the free world forced to collect, remit and administer two sales tax regimes — one federal, one provincial. What a nightmare for businesses. The only province to escape this madness was Alberta, where there is no provincial sales tax. The architects of the GST tried to convince us this new tax would be good for Canada, since it replaced the hidden manufacturers sales tax. But, what they didn't want taxpayers to know was how Ottawa quietly hiked the MST to 13.5%, to make it more palatable to usher in the 9% GST which was later reduced to 7% and promoted as a debt-slaying tax. Voters weren't fooled. Their anger reduced the Conservatives to a Party of Two when the next election rolled around. Now, with harmonization, taxes surely will head higher as services never hit by a PST will now be taxed. In Ontario, for example, where the 5% GST will be harmonized with the 8% PST in July 2010, a host of services like lawyers' fees, will now be slapped with a 13% tax. The Ontario Real Estate Association estimates the cost of a real estate transaction will jump by $2,000. Worse, though homes valued under $400,000 will be exempt from the blended tax, Ontario's Building Industry and Land Development (BILD) Association estimates harmonization will add more than $46,000 to the price of a $580,000 new home in Toronto. Believe me, in high-priced Toronto, $580,000 is an average home, not a mansion. Add in Toronto Mayor David Miller's new municipal land transfer tax, that's doubles the pain of Ontario's land transfer tax — and it's like nailing the coffin shut on one sector of the economy that seems to be weathering the storm, even though sales and price gains have dropped off. This spring we've watched the market limping to a recovery. At a recent Ontario Home Builders Association seminar, experts warned harmonization will kill the golden goose, and force the industry, especially home renovators, into the black market. Now, here's where it will also hurt — especially in Canada's manufacturing heartland, that's bleeding from job losses in the auto sector. The price of gasoline — which is again flirting with record highs, even though oil prices have dropped from US$147 a barrel to the $73 range — will head higher as the GST at the pumps is blended with the PST. Heating fuels will also rise. Electricity prices, which have been going through the roof, will no longer be exempt from the PST, making hydro more expensive. Also no longer exempt will be tobacco, personal services like haircuts, membership fees for clubs and gyms, newspapers and magazine, taxi fares and the professional services of lawyers, architects and accountants. Real estate commissions will also be taxed. The only things to remain exempt will be children's clothing and footwear, children's car seats and car booster seats, books, diapers and feminine hygiene products. Basic groceriess, rent, condo fees, prescription drugs, and medical devices also will remain exempt from both PST and GST. Buying a resale home will be exempt from PST. The Ontario Chamber of Commerce estimates a fully blended tax system would cost consumers $905 million in higher taxes, but save companies $1.6 billion a year. Yet, many business owners remain skeptical. One remarked on a website, “It is the end consumer that will end up paying more and it is the end consumer who will decide whether they are willing to pay more tax on something that is not a necessary need or want. In the end businesses may end up losing.” Canada's economy is often referred to as a resource-rich economy. The oil patch and Saskatchewan's potash keep money flowing. But the manufacturing sector and its high-paying jobs are dying, while Ontario, the most populated province and once the country's economic engine, is now a have-not province. The reality is while Bay Street and Wall Street get bailouts paid for by taxpayer dollars, Main Street's taxpayers are losing jobs and drowning in a sea of household debt, now over $1 trillion. These consumers account for two-thirds of our economy. Higher taxes are the last thing Canada needs, especially now. Revolt anyone? TAX FREEDOM DAYS AROUND THE GLOBE India – March 14 Australia — April 22 United States – April 13 Estonia — April 24 Uruguay — May 11 South Africa — May 12 Hungary — May 20 New Zealand — May 21 Spain — May 21 Slovakia — May 22 Bulgari — May 27 Brazil — May 27 Lithuania — May 23 United Kingdom — June 2 Belgium — June 8 Czech Republic — June 11 Crotia — June 13 Canada — June 6 Slovenia — June 17 Poland — June 25 Germany — July 8 France — July 16 Israel — July 15 Sweden — July 29 Norway — July 29 Linda Leatherdale is one of Canada's most trusted financial voices, who can be reached at lindaleatherdale.com. She is also Vice-President of Marketing and Business Development for Cambria Canada. (www.cambriacanada.com)
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