Rising fuel prices are causing government coffers to swell, and in a web poll conducted by COMPAS Inc., 126 leaders of Canadian companies offered their opinions on how that money should be spent.
Paying down the national debt has consistently been a top priority for the respondents, and this round is no different. Debt repayment still ranks as No. 1, although support has dropped. On average, the CEOs would allocate 19% of new government money to paying down the debt, versus 33% in October of last year.
Cutting fuel taxes on an interim basis, on the other hand, has gained favour. Back in October, the panel allocated only 1% of government funds to such a measure; today the number stands at 14%. “Putting money back into consumers’ hands will aid the economy,” wrote one respondent. “The government is no place to keep the surplus.”
One CEO expressed caution about drastic policy measures based on high fuel prices. “This may be a permanent situation, but it could also be a short-lived. While there is an additional unbudgeted stream of funds, 50% should be earmarked for debt,” wrote the respondent. “That alone will result in lower interest costs, an expense that will climb as central banks will be obligated to increase rates to combat inflation.”
Cutting personal income taxes, as well as spending on infrastructure renewal, were also top priorities, with the latter at an all-time high. Investing in measures to improve the environment is an idea slowly gaining support, up to 9% from 6% in October, although at least one respondent believes the issue deserves even more attention. “Wouldn’t it be nice to see the government put half of the extra money raised through energy taxes back into developing renewable energy sources?” wrote the CEO.
Support dropped sharply for using the money for domestic security purposes and for health transfer payments to the provinces, both of which have been declining since 2001.
As usual, some of the respondents expressed a fair degree of cynicism about the ability of the federal government to use the money responsibly. “Windfalls from unexpected and large increases in fuel prices are simply giving our politicians more latitude for special interests and waste,” wrote one respondent. “They need to be held accountable for this windfall or use it to slow the pace of change in the economy to a level which is not decimating the industrial heart of the country.”