I try not to get too political and focus on personal finances, but a lot of my personal finance thoughts are up in the air at the moment. Also, this ad playing in the background is driving me nuts. I've recently begun to take a more active interest in politics, but at this moment I haven't chosen my desired federal party. So I in no way mean this as a pro-conservative rant.
The Liberal party (and previously the NDP party) were accusing the Conservative government of spending billions on corporate tax cuts. Taxes are income for the government, not an expense, so to say the government is spending more money is clearly just wrong. I equate this to saying you are "saving" money by buying a TV on sale. You aren't saving money, you are spending less. The distinction is important, because instead of buying the TV you could instead buy a mutual fund or put it into a high interest savings account. That is saving money.
The real question is why a government would chose to receive less income. I don't think anyone (a corporation or an individual) is excited to pay any taxes. Although, I think most of us realize that they are a necessary to provide the services ourselves and our fellow citizens rely on. We're both upset when services are cut and when taxes are raised. We want our government to do as much as it can with as little funds as it requires. Its a bit of a balancing game as our spending decreases and taxes increase and vice versa. The country lives on our gross domestic product (GDP) and our taxes.
Corporations differ from individuals because they actually provide jobs. A corporation spends its money on new technologies, human resources, expansion, etc. while individuals buy consumer goods. So it stands to reason that the higher the corporate taxes are the less growth and hiring a company will do. Less jobs in turn means less individual taxes to be taken from the government and less purchases and therefore less sales tax. So if a government can produce more income with a tax cut, it would be in their best interest (and ours) to do so.
Another thing to keep in mind is that a corporation, like an individual, can move. While not easy to do, it can (and has) been done. So lower taxes may draw corporations here, while higher ones can send them south.
These proposed cuts are designed to lower unemployment and boost GDP which would help pull us out of this recession. I tried to find evidence one way or the other to see if these tax cuts have been proven to actually do that, but the information is hard to come by. I believe mostly because these tax breaks are always discussed when the country is already struggling and the effects don't happen over night. Also there would be some limit to where these breaks would be efficient. If the economy was hot and employees were scarce, then the tax cuts would raise wages and increase inflation without actually improving the GDP. However, at least theoretically, in a slow economy these breaks just make perfect sense.
Regardless though, we're not talking about spending more money. We're reducing taxes to induce more business to come here or start up and give more people jobs. You should then have the exact same amount of money to spend on services as you did before if not more. Not giving the tax breaks doesn't mean you have billions more to spend. You have the same or less. Much less if the corporation shuts down or moves.