Amid unpopularity & poor polls, Trudeau announces tax break, freebies

In a desperate bid to appease voters amid deep unpopularity ahead of elections, Canadian Prime Minister Justin Trudeau has announced tax cuts and freebies.

Trudeau and his Liberal Party are deeply popular and are projected to lose the upcoming parliamentary elections. As per the latest polling aggregate at ThreeThirtyEight, a polling news and analytical website, the Conservatives have an 18 per cent lead over Liberals.

Canada is also in the grips of a cost-of-living crisis where commonfolk are battered with high food, grocery, and rent bills.

Amid such a crisis, Trudeau has announced he would remove goods and services tax (GST) on goods for two months and send one-time C$ 250 cheques to people earning up to $150,000 a year.

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Experts have said that the announcements are not going to contribute to the economic crisis that common Canadians are reeling under.

Trudeau has also been facing political troubles. Recently, there as a revolt among his Liberal MPs who had threatened to topple his minority government.

What’s there in Trudeau’s package?

The CBC News has reported that Trudeau has removed GST on following goods during December 14 and February 15:

• Prepared foods and meals, salads, and sandwiches

• Restaurant meals

• Snacks

• Beer, wine, cider, and pre-mixed alcoholic beverages below 7 per cent alcohol by volume

• Children’s clothes, toys, diapers

• Footwear

• Car seats

• Books, newspapers,

• Christmas trees

All food will be essentially tax-free for three months with these GST exemptions, noted the outlet.

As for the one-time C$ 250 cheque, Canadians who worked in 2013 and earnt C$ 150,000 or below will receive them in early spring.

Around 18.7 million Canadians will receive checks, according to Associated Press.

Making these announcements, Trudeau said Canadians are going to “get a real break on everything” for two months.

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“Our government can’t set prices at the checkout but we can put more money in peoples’ pockets. That’s going to give people the relief they need. People are squeezed and we’re there to help,” said Trudeau.

‘Desperate move by popular government’

Political observers have, however, dubbed Trudeau’s cash-distribution as a frustrated move of an unpopular government.

“Politically, it’s probably too little too late and it feels like a desperate move on the part of an unpopular government. It’s also bad public policy, at least from a fiscal standpoint,” said Daniel Béland, a political science professor at McGill University to AP.

The think tank Fraser Institute dubbed the announcements a “grab bag of bad ideas”. It noted that slashing GST, which is one of the least burdensome taxes, is a mistake. It further said that one-time cheque with a tax cut is a mistake and economic nonsense.

“One-time tax rebates are a terrible way to provide tax relief. When you cut income tax rates, you improve incentives for people to work and invest because they get to keep a larger share of their earnings. This helps the economy grow. One-time rebates that you get regardless of the economic choices you make has no similar effect. This means that the rebate with its $4.7 billion price tag won’t help Canada’s poor growth performance,” noted the Fraser Institute.

It further said, “Canada’s recent growth record is abysmal, and boosting growth should be a primary goal of any changes to tax policy. A GST cut of any duration fails this test relative to other tax cuts.”