Bad MP report card – Pat Martin

I’m not a big Pat martin fan to start with. I don’t think he is a good MP, he’s never met a microphone or photo opportunity he didn’t like, and to be honest I think he is an embarrassment to his constituents.

We get his mailings at work and he goes off on issues that are either not issues or something is already being done about them. Case in point – his latest mailing asked us to contact the government about agriculture rail freight issues. Guess he forgot a rail freight service review is going on.

His real burning issue is getting rid of the penny. He’s been working on this for years. Now, not that the penny isn’t something that could be looked at, but….

If you are the MP for the second poorest riding in Canada, shouldn’t you be working on other issues than getting rid of the penny? Shouldn’t instead of asking you to contact your MP on rural agricultural issues, you should be contacting them on issues that affect this inner city riding?

Perhaps Pat Martin, you should learn the meaning of the phrases ‘public service’ and ‘representation of constituents’ as opposed to camera hog.

 

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Graham James bail decision

So Graham James was granted bail this week. I’m not going into detail about who Graham James is or what he is accused of, because if you are reading this blog you’re probably tuned in enough to know the story.

Winnipeg Sun Report

And while I can understand Theo Fleury as a victim being upset, if the conditions for bail are what are listed in the Sun article, then it is the correct legal decision.

Is he a flight risk? Well, he came back from Mexico on his own accord and turned himself in. And if he surrenders his passport I don’t see how he can be considered a flight risk

Will he bring the Justice System into disrepute? Considering how many repeat offenders keep getting bail after bail after bail, I don’t think this is an issue.

Is he a danger to the community? The accused acts took place over 20 years ago. Fleury mentioned that doesn’t mean he hasn’t offended. The problem there is that our system is based on innocent until proven guilty. We don’t put people in jail because they can’t prove they haven’t committed a crime, we put them in jail because we have proven they have committed a crime.

So the decision, based on the criteria, is correct.

If James is guilty of the accusations, he’ll be convicted and given how high profile the case is combined with the outrage with him getting a pardon, a slap on the wrist isn’t likely.

Hopefully then Fleury will get some closure.

 

NDP reminds me of a Colin James song

Remember that Colin James song from the 80’s ” Why’d you lie?”

I’m often reminded of that song each time I now hear any statement coming from our provincial government. Why can’t they be honest with Manitobans?

Am I naive? or just too much of an idealist?

Is it too much to expect your elected representatives to be honest with the public?

Never mind the lies over bipole, or how much the corporate  tax reduction will benefit businesses (which I have already gone over)

Or is our provincial government that arrogant to think that Manitobans will follow them blindly and unquestioned. Accepting every statement as truth.

You’ve all seen the attack ads. They have also been widely panned – see local forums. Cherenkov did an interesting post on it – I thought I would take it one further and actually check the accuracy of their sources, especially the hansard.

Here’s the video:

Now , I’m wondering how many of those statements are true.

Here’s the first one:

FACT: Opposes Minimun Wage Increases ( Source: Hansard 28/11/2008)

Well, if you actually look at the Hansard for that day, you’ll see that there is only one mention of the term ‘Minimum  Wage’. It’s in the response to the throne speech from the MLA from St. Rose. He is listing minimum wage increases as one item that affects small businesses. Here is the actual quote:

Increases in the minimum wage affect small business more than any other business. What results is it doesn’t help in the long run. What happens is there are less summer students getting hired; maybe one staffer is gone and the people that own and operate the business spend more hours doing it themselves.

I don’t think I’d call that ‘Opposing Minimum Wage Increases’. In the context of the speech, I’d call it things that affect small businesses.

Okay, how about claim #2 ( you’re allowed one mulligan, right?)

Well, try as I might, I can’t verify that claim either. Might have something to do with the date on the source. Here is the claim:

FACT: Against Improved Health & Safety Laws ( Source Brandon Sun 9/4/2010)

I can’t access Brandon Sun archives that far back since I am not a subscriber, so I can’t verify the accuracy of the claim.

What about claim #3:

FACT: Would overturn water protection laws ( Source: Brandon Sun 28/4/2006)

like the previous ‘Fact’, this can’t be verified due to how old the source is.

Next,

FACT: Would oppose wastewater treatment ( Source PC news release 14/4/2010)

I’m pretty sure this has to do with the wastewater treatment facilities the province is requiring the city to build. These would be the same ones the remove nitrogen, which the city, the PCs and scientists oppose as it would have no effect on the health of Lake Winnipeg, and would be a waste of money. But I guess if the NDP takes a position, it doesn’t matter how many experts refute it, the NDP can’t be wrong.

Unfortunately, I can’t find the source to verify this one either ( If anyone could provide a link, I’ll post it here and update the post)

Here’s the next one:

FACT: Still Supports Deep cuts of the ’90s ( Source: Hansard 11/4/2008)

Well, that was a budget debate day. I think I know what the NDP is talking about. I say ‘I think’, because it’s quite the leap:

By way of example, there were tough decisions made through the 1980s and 1990s. The Free Trade Agreement, which the NDP campaigned against–I remember the then-Leader of the Opposition, current Member for Concordia (Mr. Doer), saying that he and his party were against free trade.

Now, the ad shows the quote with a picture of a nurse. The word ‘nurse’ only shows up in the hansard once that day, and only for description of some Manitobans (“It’s not the Manitoba way to insult the hardworking taxpayers, farmers, small-business people, nurses, teachers, police officers and others who get up and work hard and pay their taxes.”)

Another completely false “Fact”

Next

FACT: PC budget proposal would cut $450 million ( Souce: Hansard 17/6/2010)

Problem with the above statement is that wasn’t what was debated that day. Check the Hansard, the debate is on the budget yes, specifically the removal of the penalty to cabinet ministers if they run a deficit budget. And if you read the amendments, you’ll see that the PCs even offered an amendment to suspend balanced budget legislation for 1 year. Another outright NDP lie.

So 6 ‘Facts’ presented.

3 come from the hansard and are outright lies

2 come from the Brandon Sun and can’t be verified.

1 is a PC news release that I haven’t yet been able to find.

Does the NDP just make things up and pitch it as the truth?

How can you believe anything they say?

Why isn’t the media exposing this? Hey Dan Lett, you did a piece on this, why didn’t you do the 1/2 hour of research that I did and point out that these statements are false? Instead you used the article to let Jennifer Howard defend the use of these. You could have at least asked why they were using statements falsely attributed to the Hansard. I’d love to hear your explanation for that.

Why are we letting them get away with these lies?

The Numbers behind the small business tax cut

Okay, time for a blog post on this. The NDP announced yesterday that they were removing the Small Business Income tax rate effective Dec 1, 2010. It’s currently at 1% and has been decreasing from 8% since 1999.

A few points to be clear on before we proceed:

The NDP, while wanting to take all the credit for bringing the rate to 0% has to realize that this would have been cut no matter who was in power. There isn’t a province west of Quebec that has a rate more than 4.5%. So yes, Kudos for cutting it, but it would have been decreased regardless.

The Small Business Income Tax rate applies to income of $400,000 or less. Remember we are talking income here, not Revenue (the two are different: Revenue less expenses = income). And after $400,000 of income, the business  pays the normal rate of 12%.

I found it interesting that the Free Press pretty much buried the story, yet was being tweeted all day yesterday .  CTV did a story on it :

http://winnipeg.ctv.ca/servlet/an/local/CTVNews/20101201/wpg_tax_101201/20101201?hub=Winnipeg

What I would like to know is how many cupcakes the NDP bought in order for the business owner to say this:

Business owner Derrick Godfrey, who operates a cupcake shop in Osborne Village, said the elimination of the tax will mean about an extra $10,000 a year for his shop.

“Ten grand means it’ll allow us to hire another part-time baker,” said Godfrey.

Really? $10K, huh?

$400,000 @ 1 % = $4,000.

So where does the magic $10K come from? The maximum effect is $4,000. And dude, I seriously doubt you have $400K in income from selling cupcakes. If we assume 50% gross margin and 20% overhead, you’d need $1.3M in sales to some up with $400K in income. Winnipeggers aren’t stuffing their faces with that many cupcakes!

Now that I have warmed you all up, I’m a numbers guy so lets see what the numbers are telling me about this announcement.

There are two major taxes that affect businesses in Manitoba ( I could talk about personal income taxes, but I’ve covered that in an earlier post) – Corporate income tax and Payroll Tax. For the sake of these comparison I’ve only looked at Ontario westward. Manitoba and Ontario are the only provinces that have payroll taxes. I’ve ran the numbers for four scenarios:

Scenario #1. A business makes $400K ( MB  small business rate maximum)  and has a payroll of $1.0M:

$400K Income, $1.0M Payroll
Income Payroll Total
BC 10000 0 10000
AB 12000 0 12000
SK 18000 0 18000
MB 0 0 0
ON 18000 11700 29700

Well, Manitoba’s payroll tax doesn’t kick in until $1.25M, and since Manitoba doesn’t charge income tax under $400K, looks like Manitoba has the best rate and Ontario loses.

Scenario#2 – Business still makes $400K, but now has payroll of $1.5M so MB payroll tax kicks in:

$400K Income, $1.5M Payroll
Income Payroll Total
BC 10000 0 10000
AB 12000 0 12000
SK 18000 0 18000
MB 0 10750 10750
ON 18000 11700 29700

So now the effect of the payroll tax comes into effect here. ON still pays the most, but now BC pays the least.

Scenario#4 – Business makes $750K, but payroll of $1.5M:

$750K Income, $1.5M Payroll
Income Payroll Total
BC 38750 0 38750
AB 40000 0 40000
SK 52500 0 52500
MB 42000 10750 52750
ON 52500 21450 73950

Okay, Ontario is still the highest, but look what has happened to Manitoba, it’s now the second highest. Why? Because the small business limit in Manitoba is $400K and in every other province it is $500K. Because of this, Manitoba business owners pay anywhere from $7,500 to $9,500 more tax on that $100K.

Scenario#4 – Business makes $1.5M, but payroll of $2.6M:

$1.5M Income, $2.6M Payroll
Income Payroll Total
BC 117500 0 117500
AB 115000 0 115000
SK 142500 0 142500
MB 132000 55900 187900
ON 142500 42900 185400

The big business scenario. Highest corporate tax bracket, highest payroll tax rates. Manitoba jumps over Ontario. Why? Because our payroll tax is higher. Why is Alberta the least now? Because while the low rate for B.C. is lower than Alberta, the high rate for B.C. is higher than AB.

So recap:

Ontario is highest in 3 out of 4 scenarios

Manitoba is lowest in one scenario

Where Manitoba starts to become uncompetitive with other western provinces is between $400K and $500K of income and when payroll tax comes into play. You can really see the impact of Payroll tax in the last scenario. Goes to show why we have so few big businesses locating their head offices here.

So it’s the payroll tax that’s the killer. It’s easier for business owners to reduce their taxable income, but much harder to affect the amount of payroll tax to be paid ( although both can be done).

So is it fair for Manitoba businesses? Well at the low end yes. But the NDP gov’t should increase the exemption to $500K and start working on getting rid of the payroll tax – that would make us competitive with other western provinces. We don’t need to be the lowest, but there is a $72,900 gap between a business with $1.5M of income in Alberta and Manitoba. That’s huge.

This move while nice is pretty much window dressing and an attempt to make the current gov’t look more business friendly than it actually is.

Perhaps more unsettling is the Finance Minister’s position that they have no plans to reduce the personal income tax rates of which Manitobans pay the highest in the country.

Given the firehose that is the NDP approach to spending, is it even possible for them to even think about any substantial reductions?