Canada's Government Accused Of Exaggerating Tax Cuts

by Mike Godfrey, Tax-News.com, Washington

24 August 2007

Prime Minister Stephen Harper's Conservative government has been accused by a taxpayer advocacy group of exaggerating the value of tax cuts delivered by the new government since it took office early last year.

According to an analysis of the government's tax cut programme by John Williamson, president of the Canadian Taxpayers Association, the Tories have overstated the value of their tax cuts to the Canadian public "by at least C$8.8 billion".

The Conservatives claim that measures introduced in the last two budgets will cut tax by $41 billion, but Williamson is of the view that the government has used "three tricks" to inflate the figure.

"The Conservatives magically credit themselves $500 million for enacting measures announced in the 2005 Liberal budget; they include an income supplement program for the working poor worth $1.2 billion as a tax cut instead of properly classifying it as an expenditure; and mysteriously calculate the 2006 budget's half-point personal income tax increase as a multibillion dollar tax reduction," he argued.

While Williamson accepts that the overall Canadian tax burden is decreasing, he argued that it is not falling "to the extent the Conservatives would like Canadians to believe".

A spokesman for Finance Minister Jim Flaherty disputed Williamson's claims, and stood by the C$41 billion tax cut figure. "We've done that by reducing consumption taxes, excise taxes, personal taxes and corporate taxes," over the three years from 2006 to 2008, he was quoted as asserting by the Edmonton Sun.

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