Bill C-253 effectively died on March 11, 2008. That was the day Finance Minister Jim Flaherty introduced a ways-and-means motion along with his budget to effectively cancel any benefits gained from letting parents knock up to $5,000 a year off their taxable income by contributing to a child’s registered education savings plan.
It’s too bad the idea had to die this way, but the House of Commons probably shouldn’t have voted on it in the first place. Only the ruling party can introduce a money bill, and while we can debate whether Liberal MP Dan McTeague’s private member’s bill qualifies as such (it doesn’t spend money or add a tax), the reality is it would have affected revenue. That point of order is important. Without it, every politician might get, say, an unnecessary, expensive railroad through his riding (just like Flaherty’s budget gave constituents in his Ontario riding of Whitby-Oshawa, and his wife’s in Whitby-Ajax, too, for that matter).
Flaherty said the RESP bill “risks plunging the federal government back into deficit.” The key word here is “risks.” The truth is, Ottawa is still running a surplus, probably a much bigger one than it’s letting on, and running a surplus is, in some ways, worse than running a deficit. That’s because it’s all too tempting for the government to spend — like, say, shelling out $150 million to reopen a railway that the previous Tory government closed for lack of use. We shudder to think what other pork the feds will hand out while we wait for an election.
There was an easy solution, one that would have allowed the guts of the popular RESP bill to remain, while giving Flaherty an out. Give people the option of putting $5,000 into either the proposed tax-free savings account or an RESP, and eliminate the 20% bonus the government now adds to RESP contributions up to $2,500. Details about the tax-free account were scarce anyway, so Flaherty could have said his intention all along was to include an RESP option.
As it stands, the government seems to be sending a message that it is anti-education and anti-innovation, at a time when Canada’s prosperity depends on those very things. That’s a bad message to send.