Seldom mentioned in the media

One of the events that is seldom given much media coverage outside of Ottawa is committee stage review. Basically once a bill has passed to second reading in the House of Commons it will come before the appropriate Parliamentary Committee for further scrutiny that also often involves hearing from impacted stakeholders and expert witnesses.

This closer scrutiny by Parliamentarians may often reveal a much greater level of detail that in turn can illustrate areas of concern.

Recently at the Finance Committee an example of this occurred during scrutiny of the Liberals omnibus legislation related to the Budget Implementation Act.

More specifically examining the Liberals promise to raise taxes on most beer, wine and spirits by two percent in the upcoming budget. Upon further investigation it was revealed that in fact the proposed legislation calls for this increase in taxation to occur every year rising with the rate of inflation. Why is that a problem? Ultimately there is an expectation that any proposed tax increase or decrease must be signed off on by the Minister of Finance on the budget in question so that in turn it can be fully debated and scrutinized in Parliament. In this situation this tax would increase every year by default at a rate of inflation that would not be determined by a democratically elected Member of Parliament. To some this may not be a concern however others view it as a slippery slope that if unchallenged may well lead to other taxes also quietly receiving annual escalators set by unelected department officials in Ottawa.

In this case the Department of Finance estimates this proposed tax escalator may well raise roughly $470 million over the next five years so it is not an insignificant amount of money that may also adversely impact Canada’s producers of these related beverages.

There is also a possible Okanagan connection as currently 100 per cent Canadian produced wine is exempt from this tax however the proposed increase in tax onto imported producers products may very well be subject to a trade challenge that could in turn threaten the current domestic tax exemption.

From a historical perspective the last time an annual escalator tax was used in Canada was under the Liberal government of Pierre Trudeau.

Already I am hearing concerns from industry producers however as most citizens are not aware of the proposed use of escalator taxation the feedback locally has been minimal.

----My question this week relates to the use of escalator taxation. Is escalator taxation something you support as an efficient means for government to raise revenue or should all proposed increases or decreases in taxes be contained and debated in a related budget? I can be reached at Dan.Albas@parl.gc.ca or call toll free at 1-800-665-8711.

Dan Albas is Member of Parliament for Central Okanagan Similkameen Nicola and member of the Conservative caucus.