The Throne Speech: Passionate Honeymoon But First Cracks Are Showing Over Absence of Tax Cuts

Transcription

1 The Throne Speech: Passionate Honeymoon But First Cracks Are Showing Over Absence of Tax Cuts BDO Dunwoody/Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post for Publication February 9, 2004 COMPAS Inc. Public Opinion and Customer Research

2 1.0. Introduction Paul Martin continues his honeymoon with business leaders but the first cracks are showing. The good news for the newly installed Prime Minister is that his throne speech earns far, far higher marks than did the throne speech of Jean Chretien in fall, The bad news is that business leaders are worried about out-of-control spending and very concerned about the absence of tax cuts and program down-sizing in Martin s text. These are the principal findings from this week s web survey, conducted on behalf of the National Post under sponsorship of BDO Dunwoody and the Canadian Chamber of Commerce. COMPAS asked Canada s CEOs and business leaders about their support for Throne Speech initiatives, concerns about government spending and initiatives they felt were missing from the Throne Speech Throne Speech: High Marks, But Fear about Taxes and Spending The Throne Speech receives exceptionally high marks from Canada s business leaders, undoubtedly reflecting confidence in the Prime Minister himself. Nonetheless, business leaders are very worried about the federal government s record of high spending and the absence of commitments in the Throne Speech to tax cuts. The evidence of business leader s high confidence in Martin is shown in the good report card grades that they give most of the elements of the throne speech, as shown in Table 1. Martin s Throne speech earns passing grades for every element except the financial commitment to Aboriginal programs, which gets a failing grade. Furthermore, the vast majority of Martin s promises earn high grades, led by exceptional grades for the Independent Ethics Commissioner, municipal GST exemptions and investment in the Canadian military. By contrast, the Chrétien Throne Speech earned failing grades for 5 out of its 7 components, as shown in table 2. 1

3 Table 1: Grading Martin s Current Throne Speech, As you may know, there has been some talk in the media about the recent Throne Speech. Using a 100-point scale where 100 is the best possible score, please rate each of the following initiatives from the Throne Speech. [RANDOMIZE] MEAN dnk SCORE Make the Ethics Commissioner independent of the Prime Ministers Office 81 3 Make municipalities GST exempt 75 3 Purchasing military equipment such as jeeps and helicopters 73 5 Give a portion of gas tax revenue directly to municipalities 71 3 Reform Parliament by increasing the number of free votes for MPs 70 5 Create a national public health agency to respond to health crises like 64 4 SARS Increase tax credits for disabled persons and their families 63 4 Spend $4 billion dollars to clean up toxic sites in Canada 60 5 Expand the Canada Student Loan program 57 4 Increase spending on aboriginal programs 32 3 Table 2: Grading Chrétien s Throne Speech in October, 2002, The Throne Speech promised more spending. Using the 100-point scale where 100 is the best possible score, please rate the government s spending plans in the following areas: [ROTATE] DNK Healthcare 50 6 Urban infrastructure 49 6 Environment 40 8 Aboriginal policy 39 8 Corporate Crime 39 8 Development Assistance to the Third World 38 9 Defence 30 8 Martin s honeymoon is threatened by serious concern about government spending. As shown in table 3, business leaders are very concerned about government spending, even if they are not quite as alarmed as they were under Chrétien. In fall, 2002, a near two-thirds majority of business leaders described themselves as very concerned about 2

4 the government s spending plans. This has plummeted to 24. Three- quarters today describe themselves as either very or somewhat concerned. Business leaders concerns about Martin s spending plans are reflected not only in responses to the preceding question but also in their volunteered comments about the Speech. As shown in Table 4, three-fifths of business leaders volunteer concern about the perceived absence of commitments to cut taxes or specific programs (e.g. gun registry). Respondents second most frequent volunteered concern, expressed by only 9, relates to the perceived absence of a commitment to debt reduction. Table 3: Q2. In light of the Throne Speech are you very concerned, somewhat concerned, not very concerned, or not at all concerned about the government s future spending plans? Oct 02 Feb 04 Very concerned Somewhat concerned Not very concerned 6 21 Not at all concerned 0 3 DNK/Refused 1 1 Table 4: Q3. Which initiative or commitment would you have liked to see in the Throne Speech that was absent? [OPEN ENDED] Cut taxes/government 59 Debt reduction 9 Increase Healthcare transfer payments 5 Improve trade relations 5 Increase military spending 4 Improve transportation systems 3 Protect the environment 2 Promotion of good governance 2 Legalization of marijuana 2 Other 8 DNK excluded from calculation 39 3

5 5.0. Methodology The National Post/COMPAS web-survey of CEOs and leaders of small, medium, and large corporations and among executives of the local and national Chambers of Commerce was conducted February 3-6, Respondents constitute an essentially hand-picked panel. Because medium and small companies are more numerous in the economy and hence among Chamber membership, the actual respondents in this consultative panel are drawn more from these strata than from the stratum of the largest companies. Because of the small population of CEOs and business leaders from which the sample was drawn, the study can be considered more accurate than comparably sized general public studies. In studies of the general public, surveys of 174 are deemed accurate to within approximately 7.4 percentage points 19 times out of 20. The principal and coinvestigator on this study are Conrad Winn, Ph.D and Tamara Gottlieb. 4