The Tax-Free Savings Account is a brilliant Conservative idea that ought to have sent every red-blooded Liberal screaming in hysterics:

A key feature of Flaherty's document is the introduction of a new investment vehicle for Canadians, dubbed a Tax-free Savings Account.

Individuals will be able to put up to $5,000 a year into one of the accounts. Capital gains earned on investments in the account will be exempt from tax, even when withdrawn. Account holders will be able to withdraw money at any time without restriction. Unlike an RRSP, contributions to the new account will not be tax-deductible.

"An RRSP is primarily designed for retirement," said Flaherty. "In many ways, a Tax-free Savings Account is like an RRSP for everything else in your life."

Since when have Liberals supported the notion that Canadians could be trusted to deal with anything in their lives?

Canada is brimming with federal programs designed to help specific sets of Canadians deal with specific problems in their lives, all courtesy of previous Liberal governments (maybe some from Progressive Conservative red Tories), all funded by taxes, and all designed to make the recipient grateful to the government for the handout.

We almost got a national daycare program before the Liberals were finally thrown out.

Instead of national daycare, the Conservatives said every family with a child under six would get $100 per month per child.  Use it as you see fit.

That fundamental difference in the way Conservatives and Liberals perceive the voters made for one of the most memorable moments from the 2006 election.

No, screamed one Liberal strategist. You can't just give money to Canadian parents.  Those fools will spend the money on beer and popcorn!

Or words to that effect.

Well, now we have the ability to sock money away, $5000 a year, and more in years going forward.  Earnings on those savings is tax-free.  If we remove the money, the infusion of cash into our income stream for that year is ignored by the government.  Moving money out doesn't affect the ability to put money back in.

In other words, Canadians are getting tax shelters.  The government is vacating a space in the economy for all of us to use as we see fit, a space that will grow larger year by year.

So what's the catch?  Can I only use the money to pay for university?  Or to buy a green car?  Or to put my kids in French immersion classes?

No. No. No.

If I want to use the money to buy a gas-guzzling SUV and use the left-over cash to fill my monster with beer and popcorn, that's just fine.

I can buy smokes and head down to the casino to lose the rest at the slots.

Or I can give it all to the David Suzuki Foundation.

Whatever I want.  It's my money!  It's none of the government's business what I do with my money.

That is a Conservative notion.  It is a fundamentally Conservative notion that changes people's attitudes towards money and the government.  Every time a Canadian forks over money to any level of government through taxes (sales taxes, land transfer taxes, property taxes, income taxes, capital gains taxes, etc), he or she is going to mutter about much better it would be to put that cash into a TSFA. 

Canadians will start to see taxes not as a civic duty, or a fact of life, but as a lost personal opportunity.

Heck, how many Canadians might try to make more opportunities to put money in a TFSA by working some overtime, or cutting back on an expensive vice like smoking?  And it would be a decision taken by that individual Canadian, without filling out any government forms.

The Liberals, should they ever return to power, will find Canadians have developed a very different attitude towards the role of government and its power to tax.  The Liberals will find it very difficult to return to the good old days of bleeding Canadians dry and then bribing them with their own money.

The TFSA should be seen by Liberals as a horrible idea that puts the long-term survival of the party in real jeopardy.  At the very least, it destroys traditional Liberal strategies for holding political power.

And despite this, Stephane Dion has rolled over on it, allowing the budget to pass, and allowing Canadians to begin to look forwards to charging up those accounts.

Stephane Dion has a very good reason to oppose this budget.  The word is that Stephane Dion did want to oppose the budget, but that the Liberal electoral machine is still broken, and the party can't fight an election.  Well, it's been over two years since the last election, and it's been over a year since Stephane Dion became Liberal Party leader.  In that time, Stephane Dion has not been able to bring the Liberals back into fighting form, and his incompetence has allowed the Conservatives to drop this poison pill (because really, that's what the TFSA is) into a minority budget.

And thanks to Stephane Dion, the Liberals are going to swallow it whole.

Maybe I'm giving too much credit to the long-term implications of the TFSA.  But if I'm right about it, and if more Liberals start to realize just what the TFSA means to Canadians and their relationship to government, and what that means specifically to potential future Liberal governments, those Liberals are going to realize just how unequivocally disastrous Stephane Dion's tenure as Liberal leader has been.

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