TORONTO – The federal government will move to provide tax relief for families after balancing the budget next year, Finance Minister Joe Oliver said Monday in his first speech to a Bay Street audience since taking over the post last month.
“We believe Canadian families still pay too much in tax,” Oliver told the business audience in Toronto. “Once the budget is balanced, our priority will be to provide tax relief to hard-working Canadian families.”
Tax cuts in the 2015 budget would come ahead of an expected election next year.
Oliver didn’t provide details of the tax breaks, promised during the last election, or get into specific plans for the projected surplus overall, saying that he will listen to debate from people all over the country before making any decisions about the more than $6 billion surplus expected next year. For this year, Ottawa is anticipating a deficit of $2.9 billion, plus a cushion of $3 billion to adjust for emergencies.
“It’s too early to get into too many details, but obviously there are a number of alternatives,” Oliver said in reply to a question from the audience after his speech.
“Some will have us focus on paying down the debt, others reducing taxes, others increasing expenditures,” he said.
“… What the balance is and what the precise policies are in that respect is, of course, what is going to be part of the national debate going forward.”
However, Oliver said he was ruling out the possibility of “reckless new spending schemes” that would lead to increased taxes, higher debt or both.
“We worked too hard to return to a balanced budget to throw it all away,” he said. “So do not expect a big stimulus program.”
Oliver’s speech did not address the contentious issue of income splitting, another 2011 campaign promise that his predecessor, Jim Flaherty, had publicly questioned.
The policy is a popular one for the Conservative base because it’s most helpful for traditional one-income families, where one spouse, usually the mother, stays home to take care of the children. Economists say that the plan, which would cost the government $2.7 billion a year, would give the most benefit to families who need it least and no benefit at all to 85 per cent of Canadian households.
Overall, Oliver’s speech stuck to familiar themes, emphasizing job creation, support for business and investing in research, innovation and infrastructure — all pillars of the government’s economic plan.
He touted Canada’s resilience during the 2008-2009 financial crisis, but said that while Canada fared better than most, the sharp decline in demand for the country’s goods and services that followed the downturn still affected its economy.
“While Canada’s economy is doing relatively well, we know that there is much more to do,” Oliver said.
“Too many Canadians are looking for work.”
A more immediate priority for Oliver will be moving ahead with implementation measures for the current budget.
“We’d like to get bipartisan or multi-partisan support,” he said. “We don’t think we will, but there will be an opportunity for the opposition to participate in the debate and we are determined to move this act forward.”
Oliver, a lawyer with an MBA who worked in the private sector finance community before entering politics, was most recently natural resources minister before taking over from Flaherty in March.
He told the audience at the start of his speech how he was sitting on a plane in Toronto waiting to take off for Vancouver when his BlackBerry buzzed with an email from his staff, saying the prime minister wanted to speak to him, but not giving a reason why.
Seconds later, another email arrived from his wife, also saying the PM was trying to reach him — at which point the plane took off, leaving Oliver to ponder for the next five hours whether good or bad news awaited him when he reached his destination.
“You know how the rest of the story goes,” he said.