Cutting the GST is a wonderful way of giving back tax money to people because this is a wonderful income distribution, but it has no other redeeming qualities, in my mind.
Vis-à-vis the economic challenges we talked about, particularly in the manufacturing sector, the forestry industry, or particularly the more general implications for productivity in Canada, it does absolutely nothing on that front. It can only stimulate consumption.
We have, quite frankly, the Bank of Canada saying that with a 5.8% unemployment rate, we don't lack for any consumption, so we have a very slow savings rate.
We do have other problems that, to its credit, the government has acted on I think very positively on the corporate tax side.
I think our remaining huge problem on the tax side is the extraordinarily high marginal effect of tax rates on families up to about $50,000 of income. If they contemplate earning an additional dollar, they only get to keep about 30¢ of it, and it just destroys any of the incentives to work, save, and invest.
It takes about $10 billion to address that, and there I think is the sad irony of the GST cut, because that's over $10 billion that could have been put more profitably to that purpose.