RESP Bill: Governing from the Opposition Benches

Don't feel stupid if you don't know what I'm talking about here. In fact, the way the Liberals, Bloc, and NDP forced the new Registered Education Savings Plan proposal through the House of Commons last week left many people dumbfounded and wondering just what the bill was all about. By attempting to govern from the opposition benches, the Liberals, Bloc, and NDP are circumventing not only the privilege of the Finance Minister to set budgetary policy, but are also going against the Constitution and the will of the people who voted them into Opposition in the first place.

Liberal MP Dan McTeague (Pickering-Scarborough East), he of the gas price crusade, introduced a bill last Thursday afternoon as a Private Members matter. With the support of his Liberal caucus, the Bloc, and NDP, the bill passed as those three parties combined have a numerical advantage over the minority Conservative government. The bill, at its core, is designed to allow Canadians who want to contribute to a RESP to receive an income tax deduction for up to $5,000 for each child based on the contribution level. Don't forget, this is on top of the regular tax shelter that Canadians receive for investing in an RESP. Financially, this plan is costly. Even Liberal estimates are around $900 million but a more realistic figure is probably closer to $1.5 billion because, frankly, what Canadian wouldn't mind taking advantage of keeping some of their money from the government at tax time? The RESP system is already a tax shelter for Canadians, the McTeague bill just creates another opportunity to duck the tax man.

As is usually the case, the wealthy benefit the most from this RESP proposal because they contribute the most to their children's education savings plan as a way to avoid paying taxes. The country's revenue is projected to fall as the economy slows in the next couple of years and McTeague's plan would drive government spending into deficit territory and that is unacceptable. While the Liberals may be famous for 'tax and spend' policies, this 'no tax and spend' plan is fiscally irresponsible and will hurt the country in the long run. Even the Canadian Taxpayers Federation disagrees with the McTeague bill, and they've been the most vocal supporters for lower taxes for years.

Politically, there are two ways to look at this plan. The government spin from Finance Minister Jim Flaherty is that this proposal is a "tax cut for the wealthy" and "runs the risk of putting the balanced budget of our government into a Liberal deficit". His assessment is bang-on, but I bring a different look to it. What McTeague did was unconstitutional. He violated the government's right and privilege to set budget and monetary policy. The bill also shows that the Opposition is trying to govern from its side of the House and that is not their job. Opposition MP's are in opposition for a reason: their party was not elected as the government. Their job is to oppose the government, not set its policy. Additionally, for the other Opposition parties to go along with this proposal is simply for political reasons. The NDP cannot say they support giving the rich a tax break with a straight face. Jack Layton and his caucus ought to be embarrassed for capitulating to the whims of Liberals after spending weeks attacking them in the House. Their agenda is simply to bring down the government and if they want an election, so be it. I'm sure they will enjoy losing several of their seats (including Hamilton Mountain) over issues such as this. Similarly for the Bloc, this RESP proposal does nothing to support their policies except to harm the Canadian state.

In essence, what I'm saying here is that the Opposition parties have abandoned their own good judgment and moral authority in attempting to govern from their side of the House on this issue. Canadians don't vote members into Opposition because they want them to govern. The RESP plan is a political ploy and nothing more. Accordingly, the government has said that they will write this bill into a budget amendment, automatically making it a confidence motion. If the Liberals continue to support this bill, they will go against their earlier plan to vote for the budget, a glaring contradiction and damaging to any election chances. The NDP, having already said they will vote against the budget, will support the RESP bill, continuing their contradictory plan of supporting a tax break for the rich. The Liberals attempt to govern from Opposition will ultimately keep them from governing at all under the incompetent Stephane Dion (who, conveniently, wasn't in the House when the vote was taken but was obviously aware of it) and further demonstrate that the only party capable of managing the nation's finances is the Conservative Party.