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LETTER: Government aid should target those most hurt by the pandemic

"Since these massive companies prospered while many small businesses suffered because of an historical accident, why not simply impose a heavy tax on the big guys and redistribute that wealth to mom and pop stores?"
letter-sta

I respectfully disagree with the Dec. 16 commentary, “This holiday toast to Alberta’s entrepreneurial spirit.” The recently published study by David Hope and Julian Limberg, “The Economic Consequences of Major Tax Cuts for the Rich,” examining the effects of supply side economic approaches in eighteen countries over the last fifty years joined a large body of literature contradicting the assertion that tax cuts drive economic growth. Instead, the study found that such policies increased inequality while having no effect on jobs or the economy at large. To see how this works in practice, one need look no further than the Canadian grocery chain Loblaws, which has recorded record profits during the pandemic.  While they began with a $2-an-hour pay bump for workers, they have subsequently eliminated this policy, instead opting to use their profits for increased shareholder dividends.

As for cutting red tape, one need only look at the outbreak at Cargill meat plants in Alberta to see why the repeal of such measures can be deadly. Similarly, the lack of oversight and standards (ie: red tape) throughout Canada of long term care homes, which has been fatal for so many of our seniors. Government regulation and safety measures are necessary to prevent business owners from literally killing people. Let us not forget that ‘job creators’ opposed the eradication of child labour, the creation of the 40-hour work week, the entrance of women into the workforce, the creation of pensions and the institution of a minimum wage. And while the idealist in me likes to think that today’s ‘job creators’ are more virtuous than those of the past, one need only look at the results wrought by the profit motive in our long term care homes to be disabused of such notions.

But maybe the authors were only suggesting tax cuts, subsidies and grants aimed at smaller businesses rather than the record profit-making essential service giants such as Amazon, Loblaws, Costco, etc. Perhaps here we can find common ground. Since these massive companies prospered while many small businesses suffered because of an historical accident, why not simply impose a heavy tax on the big guys and redistribute that wealth to mom and pop stores? After all, Superstore and Safeway did not make a ton of new money through innovation and wonderful management, just as local restaurants did not fail because of laziness or bad decision-making. Better still, target aid programs at the groups who have been hurt the worst by the pandemic: the working class and the poor. Since vaccination will not produce herd immunity until September at the earliest, most businesses will not be able to operate at full capacity for a while, meaning they will not be hiring in large numbers no matter how much money you throw at them. But workers and the poor would benefit immensely from capital investment, keeping them fed and allowing them to social distance by ensuring a roof over their heads.

Jeff Stirton, St. Albert