A Rose By Any Other Name

The Harper-Ignatieff budget will probably bring not a few surprises, one of them, scandal.

James Travers, writing in today's Toronto Star, recalls what our Conservative and Liberal leaders won't or can't - that tax rebate programmes like the recovery/stimulus budget's provision for home or cottage owners, the 3-billion dollar Home Renovation Tax Credit, usually end up mired in fraud, abuse and scandal:

Tax expenditure programs, as the bean counters call them, have given bureaucrats fits for as long as politicians have used the Canada Revenue system to pursue, if not necessarily achieve, economic and social purposes beyond raising funds.

In theory, credits and rebates are government programs by a less cumbersome, more private sector-oriented method. In practice, they are as difficult to target as the results are hard to measure and, all too frequently, lead to screaming headlines splayed over embarrassing revelations.

Forgetting the worst of what so often goes wrong is easy when a government is fighting for its life, as Stephen Harper's was in last week's budget. So it's understandable that Conservatives, in their headlong rush to spray stimulus at recession, ignored the still seeping wound of Liberal experience.

Even if there are significant differences between writing cheques and granting credits, there's no better time for the rest of us to revisit the Chrétien administration's accident-prone scheme to insulate vulnerable Canadians from rising home heating prices. That 2001 plan went so badly off the rails that the auditor general's reprise ricocheted between comedy and farce. Of the $1.45 billion spent, no more than $350 million went to needy low-and-moderate income families. Worse, cheques were written for 4,000 people living outside the country, 7,500 to the dead and 1,600 in prison.

Renovation incentives pose other problems than mailing cheques. It's also true that since then layers of accountability, some stifling, have been added. Still, it would be born-yesterday naive not to recognize that the two schemes have too much in common for taxpayer comfort. Among the shared denominators are openness to fraud, Swiss cheese controls and, worst of all, the familiar federal illusion that big spending and positive outcomes are synonymous.

What I liked best about Travers' column was his apt description of the Home Renovation Tax Credit scheme as "re-gifting tax dollars to the fortunate few willing and able to hire in hard times."