Blessed by the Potato

I like to write my MP and MPP whenever a big topical issue comes up that I’m passionate about. Some things aren’t topical, but could still use attention. Now that we have ousted the Conservatives, I think it’s as good a time as any to just congratulate my new MP on his win, and send him a letter to know what’s on the mind of one of his constituents as he plans out the next ~5 years of his life. Please feel free to pull whatever parts of this letter out that you like and write your own MP.

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Dear Dr. Tan

Congratulations on your victory! I’m very happy to be represented by a fellow scientist in my riding, and to hopefully see some positive change from a Liberal majority in Parliament.

As you plan out your priorities for creating new legislation, I wanted to share my thoughts on issues that weren’t central planks of the election platform. I am myself trained as a scientist, and in addition write as an expert on personal finance, so those fields are my primary areas of interest.

The election platform included a promise to roll back the TFSA contribution limit to $5,500/yr with indexing to inflation, which I agree with. I believe that inflation-indexing is a key component of good policy. Many of our government programs are indexed to inflation so that they continue to remain relevant and fair without the need for constant tinkering by the government. However, the Canada Education Savings Grant and the Canada Learning Bond for low-income families are not indexed, and have not increased in value since their introduction. Adjusting these programs to include inflation-indexing would help keep them relevant for the future.

The Canada Learning Bond could use additional improvements. The current take-up rate of this program is embarrassingly low. There is a group here in Toronto (the Omega Foundation) whose sole mission is to help people who are eligible for the CLB apply for it. Given that low-income Canadians often face challenges in navigating bureaucracy, changing the CLB to include automatic enrollment with a turn-key default investment (that individuals could opt out of) would go a long way to improving the usage of this program, and help better position the children of low-income Canadians to enroll in post-secondary education.

I have been a proponent for a higher marginal tax rate beyond the current top bracket, and I was glad to see the Liberals include that in the election platform. However, the highest effective marginal tax rate is not on Canada’s wealthiest, but on our poorest: an individual on GIS faces a 50¢ clawback in their benefits for each dollar of income earned, on top of any income taxes. Finding exactly the right balance between clawing back the benefit as it no longer becomes necessary and not overly disincentivizing work or drawing from an RRSP/RRIF is difficult, but I believe that 50% is too steep. I would suggest altering the initial clawback level to a slightly lower income level, and decreasing the degree of clawback to something more like 35-40%. Contrarily, OAS recipients face a clawback of just 15¢ per dollar of income earned above a very generous threshold.

Along the same lines, CMHC could use many reforms to make the availability and cost of high-ratio mortgages more counter-cyclical. One suggestion in particular would be to add regional price-to-income or price-to-rent adjustments to the minimum down payment to help prevent future housing bubbles, and ensure that CMHC is able to serve those regions that most need it while sparing those regions with functioning rental markets or escalating prices the self-defeating aspect of high-ratio mortgages.

As someone trained as a scientist, who currently supports researchers, I also want to express my belief in the importance of basic and health research, and to stress that funding for the Tri-Council agencies (NSERC, CIHR, SSHRC) has not kept up with inflation under the former Harper government. It sounds as though you and your colleagues do believe in the importance of science and evidence, and will be making moves to help in this regard, but do remember that there is a lot of “back-filling” to do before we can begin to make research a renewed priority for Canada.

Finally, as a Torontonian and daily commuter, I appreciated the promise to work with the city to develop more transit infrastructure. The ability to move people around has lagged far behind the population growth the city has experienced, and it will take a lot of work to not only catch up, but get ahead and build spare capacity for the future. So when presented with options, build all of them. Downtown relief. Sheppard and Queen subways. Light rail, heavy rail, high-speed regional rail. All of it is needed now or will be soon enough.

Sincerely, Potato

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And finally, a Harper-is-gone happy dance. I know the Liberals will screw up at some point, or we’ll disagree on something and I’ll get angry. But for now it feels good.