Tuesday, October 30, 2007

How To Spend The Surplus

Gee after all these tax cuts announced by Diamond Jim the Minister of Finance the Government still has an embarrassment of riches. And how do they intend to spend it?

The government will still have $10-billion in surplus cash to apply to the national debt.

Instead of wasting it on the national debt they should use it to fulfill their promise of increasing actual daycare spaces. This is not just a broken promise, but as predicted by the opposition, one that has fallen flat on it's face.

Few companies keen to provide daycare

The Tories thought tax credits would spur employers and community groups to open 125,000 spaces over five years. Cross-country consultations have poured cold water on the election promise

An analysis of the possibility of getting Alberta employers to create child-care spots says: "Discussions with employers, businesses in Alberta, were mainly reflective of what we heard across Canada in terms of child care not being their line of business, shared concern that it would be too costly and complex for small business to consider."

As for the idea of tax credits, those performing the analysis said: "shareholders are skeptical that a tax credit will create an adequate incentive for employers to create new child care spaces and are concerned it unfairly favours large enterprises." Nor would tax credits work for non-profit organizations, they say.

Many stakeholders said long-term funding to sustain the spaces was needed as well as the start-up financing that the government had offered. And there was a general consensus that the money should flow to the provinces and territories for distribution rather than from Ottawa to child-care providers directly in the form of tax credits.

By the time the 2007-08 budget was released last March, Ms. Finley's successor, Monte Solberg, decided that, like the Liberals, he would give $250-million annually directly to the provinces - something Ms. Finley had vowed never to do. He also offered a 25-per-cent investment tax credit to businesses that create child-care spaces in their facilities, but, as the consultations predicted, there would appear to have been little uptake on that incentive.

Mr. Solberg, who repeatedly declined to be interviewed for this article, conceded to The Canadian Press last month that the creation of 125,000 spaces might not be doable and said "we have to be realistic" when asked whether the election promise could be kept.

He cited plans for about 10,000 spaces to be created across the country - far short of the number required to meet the election goal.


The ABC's of Privatizing Daycare

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