Tobacco tax break aimed at minister's riding

[phishtaper]

Tobacco tax break aimed at minister's riding

Tobacco tax break aimed at minister's riding

BRIAN LAGH AND STEVEN CHASE

From Wednesday's Globe and Mail

OTTAWA — The Conservative government has unveiled a new tax break targeted at a select few tobacco processors in a politically vulnerable region of Southern Ontario.

Sources said the break -- worth about $500,000 -- is aimed at the constituency of Immigration Minister Diane Finley, who is thought to be in some danger of losing the next election.

One tobacco processor that should benefit from the tax change -- Simcoe Leaf Tobacco Co. Ltd. -- is in Ms. Finley's riding of Haldimand-Norfolk. It was unclear whether any firms outside her riding would benefit.

One industry expert said Simcoe Leaf appears to be the only company that would be eligible for the tax break.

"It flies in the face of all the rhetoric of Stephen Harper that he was going to be different," said Judy Wasylycia-Leis, the New Democratic Party's finance critic. "It's unacceptable and absolutely outrageous."

There are about 650 tobacco farmers in Ontario, the vast majority of them in rural Southwestern Ontario, which is represented mostly by Conservatives. The industry has been hit hard in recent years. Production is slated to drop to as low as 30 million pounds in the 2007 crop year from 75 million in 2005.

Federal Finance Minister Jim Flaherty announced the tax break Friday, saying it was needed to save about 200 jobs. Simcoe Leaf has 41 employees, but swells to about 200 at peak season, residents say. The minority government's relief measure will need some opposition support to pass through Parliament.

One Tory said the party is concerned about Ms. Finley's electoral prospects because of the unpopularity of the Caledonia land dispute, which saw a native band occupy a tract of land that had once been a former housing site. That tract is in her riding.

(Ms. Finley added some political heft to her office recently by appointing John Weissenberger, a close confidante of Prime Minister Stephen Harper, her chief of staff.)

She is also facing pressure from local tobacco farmers who want a package of financial compensation and retraining in return for quitting the industry. But farmers have only until early March before they must begin preparations for the next growing season. Farmers will need all the help they can get, sources said, if the deadline passes without a deal and they are compelled to stay in the business another year.

The tax break will go to processors who sort, grade, dry and pack leaf tobacco and must pay manufacturers' surtax on their product. The Conservatives say independent processors who are not affiliated with cigarette makers should be exempted from the tax because they aren't involved in manufacturing the end product.

"It's an issue of tax fairness," said Dan Miles, communications director for Mr. Flaherty.

There are only a handful of processors that might qualify for this reduction. It's unclear whether firms outside of Ms. Finley's riding would benefit.

Asked to comment on suggestions this was a political lifeline thrown to Ms. Finley, Mr. Miles declined to identify beneficiaries of the tax. "I am not going to get into those specifics."

Asked whether firms outside of Ms. Finley's riding benefit from the relief, Mr. Miles would only say, "It applies to leaf tobacco processors in Canada."

Officials at Simcoe Leaf could not be reached for comment, but an official for the company's American parent, Universal Corp., would neither confirm nor deny whether the tax break would benefit the Simcoe, Ont., firm.

However, a Liberal MP who represents a riding adjacent to Ms. Finley's said that Simcoe Leaf had lobbied him for the same tax break.

Brant MP Lloyd St. Amand said he was lobbied by an official from the company as long as two years ago asking for a revisiting of the tax code.

"I'm pleased for Simcoe Leaf that they've now received seemingly a positive answer," he said. "The conjecture about the timing and why now and why in that riding in particular, I'll leave for your readers to draw their own conclusions."

Conservative sources said the announcement might also help the party to defeat Mr. Amand, who won election in 2006 by only about 500 votes over his Tory rival.

Ms. Finley's office did not return calls seeking comment.

How is it that politics can still be used to support this? 50,000 people in Canada die each year from smoking-related illnesses, including 100 infants from second hand smoke. This is so wrong.

[Hux]

And if the tobacco companies that receive the help donate to her campaign it'll be like the Sponsorship Scandal only with a paper trail and in the open - Transparent Corruption!

[Birdy]

How is it that politics can still be used to support this? 50,000 people in Canada die each year from smoking-related illnesses, including 100 infants from second hand smoke. This is so wrong.

How many people die every year in car accidents? Yet we support the auto industry. From obesity? Yet we support food manufacturers.

I think it's a sad line that's drawn between making a living and doing what is morally right. An unfortunate, necessary line.

So Hux, clarify for me cuz I really don't know... if you receive preferential tax treatment and then turn around and donate to the campaign of the person/party who granted, through parliament, your preferential tax treatment, it would be considered scandalous?

[phishtaper]

approximately,

2000 to 2500 Canadians die each year in auto accidents

3000 to 4000 die of suicide

35000 to 45000 die of heart disease

12000 to 15000 die of respiratory disease

30000 to 35000 die of other cancers

3000 die of diabetes, and

12000 die of other causes.

generally speaking, people have to eat and drive to work. people dont have to smoke. there's a HUGE difference. your argument is a red herring, Birdy.

[Hux]

So Hux, clarify for me cuz I really don't know... if you receive preferential tax treatment and then turn around and donate to the campaign of the person/party who granted, through parliament, your preferential tax treatment, it would be considered scandalous?

To some yes.

[Hal Johnson]

How many people die every year in car accidents? Yet we support the auto industry. From obesity? Yet we support food manufacturers.

I think it's a sad line that's drawn between making a living and doing what is morally right. An unfortunate, necessary line.

Both those industries can be reformed to be less harmfull to us. Outside of adding vitamin c to cigarettes, I dont see how they can be changed for the better.

[Hal Johnson]

So Hux, clarify for me cuz I really don't know... if you receive preferential tax treatment and then turn around and donate to the campaign of the person/party who granted, through parliament, your preferential tax treatment, it would be considered scandalous?

To some yes.

Cargill, Conagra, and Bayer all did this with the Bush administration, and they're all evil as hell. And yes, Birdy, theres ootles of proof. Dont make me find a link!

[Hux]

I mean how much more preferntial could you really get? Perhaps tax breaks based on SIN #...

[timouse]

Sources said the break -- worth about $500,000 -- is aimed at the constituency of Immigration Minister Diane Finley, who is thought to be in some danger of losing the next election.

Federal Finance Minister Jim Flaherty announced the tax break Friday, saying it was needed to save about 200 jobs. Simcoe Leaf has 41 employees, but swells to about 200 at peak season, residents say.

$500,000 / 41 = 12,195 per job

$500,000 / 200 = $2,500 per job

how many of the 200 seasonal labourers are "guest workers?"

imagine giving the 41 employess each $12,195 to retrain? or giving all 200 each $2,500 to retrain?

imagine giving Simcoe Leaf $500,000 to transition to an alternate crop?

i really don't think that the money is a scandal as such, what i do wonder about is whay the the gov't would be propping up an unsustainable industry. OMAFRA has all sorts of programs in place for tobacco belt farmers who want to quit tobacco...why not throw the money in there??

[Birdy]

phishtaper, people don't need fudgeos or fruit rollups to live. industries need to be reformed. i'm not condoning tobacco use, trust me. i despise smoking and think it's absolutely disgusting. but i also live in the area of southern ontario this article is talking about and know how heavily good people rely on this industry to make a living and i know from first hand accounts just how much this industry has taken a hit. like my original post remarked, this is about making a living and feeding families and supporting yourselves. is the answer to say screw tobacco farmers? or should we at least look at alternative ways for them to not be screwed over feeding off the welfare system. it's a complex issue. one that's not cut and dry for the very reasons half of you have reacted in this thread.

Thanks Hux for clarifying. "To some" I don't think would be the equivalent of the sponsorship scandal.

[Hux]

What happened to libertarian Birdy, what about the free market? society changes and it is reflected in the market, it appears you have changed your tune when it's in your own backyard.

[phishtaper]

hey Birdy, you are right. my post was impersonal and lacked any sense of, or respect for, real people affected. please see my point however that while honest hardworking people survive on this industry, it is a very problemtic one, both ethically and economically. is there something more attractive about this particular crop that Im missing here?

[hamilton]

i really don't think that the money is a scandal as such, what i do wonder about is whay the the gov't would be propping up an unsustainable industry. OMAFRA has all sorts of programs in place for tobacco belt farmers who want to quit tobacco...why not throw the money in there??

If they would just let all these people grow hemp we could solve several problems all at once.

[Birdy]

hux, there's a whole bloody lot of us libertarians who prefer preferential tax treatment to the alternatives that are out there. making the free market system work in a way that doesn't leave people starving on the streets requires a lot of reform on many, many different levels. i don't think you'd find a single libertarian who would say 'feed them to the wolves'. that's not what being libertarian is about. i haven't changed one iota of what i believe. but until there are viable alternatives in place, i work with what we've got.

phishtaper, thanks for clarifying.. i think timouse has brought up a pretty valid point that hamilton has quoted here.. our government's need to start focusing on viable solutions. this whole tax break seems to be nothing but a political campaign move, and that's exactly why i see no reason for anyone to get all fired up. this stuff happens all the time.

[timouse]

i really don't think that the money is a scandal as such' date=' what i do wonder about is whay the the gov't would be propping up an unsustainable industry. OMAFRA has all sorts of programs in place for tobacco belt farmers who want to quit tobacco...why not throw the money in there??[/quote']

If they would just let all these people grow hemp we could solve several problems all at once.

tell me. i've talked to the hempola valley guys a couple of times now, the only complaint that they have is that in their 1st year a bunch of kids stole some of their crop

here's hoping...

[M.O.B.E]

If they would just let all these people grow hemp we could solve several problems all at once.

They can grow it if they want to...you just have to start a campiagn to convince them that hemp is a greater investment than tobacco.