Flaherty vowing to balance budget
WAKEFIELD, Que.—Finance minister Jim Flaherty said Canadians shouldn’t anticipate any new direction from him in the upcoming throne speech in October, but should expect him to be true to his word that he’ll balance the budget in 2015 “without doubt.”
While the Harper government is getting ready to reset the agenda in the run-up to the 2015 election campaign in October, Flaherty told reporters yesterday his focus remains eliminating the deficit in 2015, adding he’ll do what it takes to achieve that goal.
“I would hope to but we’ll have to see,” he noted.
“We’ll have to see how the economy in Europe does, how the economy in Asia does, how the economy in the United States does, what kind of growth we have in Canada, whether we’re over two percent or less than two percent.
“As you know, we fulfil our campaign commitments and we’re committed to them,” Flaherty added.
The Conservatives made expanding income splitting beyond pensioners a key campaign promise in 2011, along with doubling the original $5,000-a-year limit on contributions to tax free savings accounts (he contribution level for 2013 was raised to $5,500).
But both came with a catch: it only would happen once the books are balanced.
Income splitting, if adopted, would allow two-member households with minor children to share up to $50,000 of their income in order to lessen the tax burden on the top earner.
The government estimated it could reduce the tax bite on almost two million families who qualify by $1,300 annually on average while costing Ottawa’s treasury $2.5 billion.
The comments suggest the Conservatives would like to be able to move on the tax-saving measure in the spring, 2015 budget preceding the expected fall election, but might hold off full implementation if it risks putting the budget back into the red.
The proposal is controversial, however, as well as likely popular with middle-class families.
A C.D. Howe Institute report on the proposal argued that 85 percent of households, particularly single parents, would gain nothing.
As well, it estimated 40 percent of total benefits would go to families with income above $125,000, who could gain up to $6,400 from Ottawa, with more savings potentially coming from the provincial tax bill.
Flaherty was reappointed as finance minister in July after his office made it clear he intended to stay on until the deficit—expected to run at above $18 billion this year—is eliminated.
There had been speculation Harper was considering a change in the top cabinet portfolio if Flaherty, who has been in poor health due to a rare skin condition, was not prepared to run again.
The minister has made getting the government’s books in order an almost personal cause celebre in the past few years—much as the Liberals’ Paul Martin did in the 1990s.