Smoke On The Water

Further evidence of election readiness in case the budget goes down to defeat:

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.

....

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.

Diane Finley is probably in little danger of being defeated: Haldimand-Norfolk is part of the core Tory blue belt. But it doesn't hurt to give her something to show the local tobacco farmers, the honest folk who depend on a much-maligned industry for their livelihood.

Watch for more targeted tax breaks in the weeks to come, especially in Quebec.

Source: Globe and Mail