Senators corking wine tax

In my May 25, 2016 MP Report, I wrote:

“If you have been following our Canadian Senate, you may know that a recent effort has been underway by the Liberal government to appoint senators who are considered independent as they are not political members of the Liberal caucus.

"More recently senators have also been appointed by the prime minister with the benefit of being selected by a panel of appointees who, in theory, are selecting citizens without political considerations being part of the criteria.

"These recent Senate reform efforts have also resulted in a number of senators who were formerly affiliated with party caucuses to resign and also sit as Independent members of the Senate. The end result is that there are now more independent senators and a different structure in place from a political perspective than had existed previously.”

I also observed “that all eyes will be on the Senate for more reasons than usual.” And one year later, more so today, that is precisely what is occurring in Ottawa.

Why do I mention this?

Recently, I wrote about escalator taxation that was being introduced by the Liberals. Escalator taxation is when a tax will increase every year by default at the rate of inflation that would not be annually determined or debated by members of Parliament.

In this current case, the tax escalator would be set on most beer, wine and spirits sold in Canada along with user fees in other areas.

This is a slippery slope that if left unchallenged may lead to other taxes also quietly receiving annual escalators set by unelected department officials in Ottawa.

Reaction to my report on this subject was overwhelming with many concerns expressed and strong opposition.

Comments such as “taxation without representation” were common and some pointed to the loss of many well-paying jobs when the former Hiram Walker plant near Kelowna shut down, the last time an escalator tax was applied to spirits in Canada.

I mention these things because a number of senators have decided to stage an intervention and seek to potentially amend the Liberals' budget bill in the Senate to stop the use of escalator taxation.

As one senator describes it: "If the government wants to increase the excise duties on alcohol, which is completely legitimate, then it should do so manually every year, in every budget. Automatic increases don't take into account the state of the economy."

While many welcome this potential intervention by the chamber of “sober second thought” and point to this as a reason why the Senate exists, others are quite strongly opposed.

Those who disagree have expressed concerns that an un-elected Senate has no business amending legislation put forward and passed by a democratically elected House.

What are your thoughts on this topic?

Should senators intervene in what they view as flawed legislation or as they are unelected and unaccountable should they refrain?

I can be reached at [email protected] or call toll free at 1-800-665-8711

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.