Canada’s Fiscal Surplus Unlikely To Be Given Back In Tax Cut, Says Martin

by Mike Godfrey, Tax-News.com, Washington

18 November 2004

Despite Canada’s healthy fiscal surplus, Prime Minister Paul Martin this week sought to dampen expectations of a tax cut this year, arguing that the government must instead concentrate on its spending priorities.

"We all understand the importance of reducing taxes, but we're going to accomplish our program first,” Martin told reporters following a recent cabinet meeting.

The Prime Minister added that the government will first seek to fulfil its pledge to boost spending in areas such as health care, and increase funding for the provinces before deciding whether a tax cut is a feasible option.

"All of these issues are issues we campaigned on. To the extent that tax cuts can be brought within that after those priorities have been met, clearly we will do so," he explained.

However, the policies of the Martin government have attracted criticism from many quarters, especially in light of a greatly underestimated fiscal surplus of C$9.1 billion, almost five times higher than the C$1.9 billion predicted by Finance Minister Ralph Goodale in March.

Conservative leader Stephen Harper argued in parliament that the surplus “should be given back to the worker who has paid that money".

“The problem is that liberals think they know how to spend the money better than whoever earned it,” remarked Mr Harper in Tuesday’s Question Period.

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