Canadian Conservatives Pledge Lower Tax And Lower Spend

by Mike Godfrey, Tax-News.com, Washington

04 June 2004

As opinion polls suggest that the main parties in the Canadian election race are running head-to-head, the Conservatives are attempting to attract the business vote by pledging cuts in company taxes.

“Where possible, we believe in low tax solutions to public policy issues – not high spending solutions,” the Conservative leader Stephen Harper told the Toronto Board of Trade on Wednesday.

However, it became clear that the proposed tax cuts are to come at a price, as the Conservative leader outlined plans to cut government subsidies and loans to Canadian corporations in order to pay for reductions in corporate and capital gains taxes.

“We will only reduce corporate taxes to the extent that we can reduce corporate welfare. I call it the free enterprise vs. the Canada Inc. approach,” explained Mr Harper.

“I believe that the auditor general will find that a significant portion of the $18 billion currently doled out in subsidies, grants and contributions does not deliver value for money,” he continued, adding:

“And here is where we replace a high spending solution with a low tax solution. We will continue to lower taxes for all businesses – including small business.”

By contrast, the current Prime Minister and leader of the ruling Liberal Party, Paul Martin has pledged to increase spending on essential public services, and has publicly stated that Canada can no longer afford to compete with the United States on the issue of taxation.

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