Canadian Government Launches Election Platform

by Mike Godfrey, Tax-News.com, London

12 April 2011

Canada's ousted governmental party, the Conservatives, have unveiled their election platform, which pledges to forge ahead with the recent failed Budget, reiterates the commitment to a low-tax plan, and introduces a raft of new tax breaks for businesses and families.

Released on April 8, and called "Here for Canada: Stephen Harper's Low-Tax Plan For Jobs and Economic Growth", the clue to the government's intentions is in the title.

The Conservatives say that their platform contains both a prudent low-tax plan designed to protect and create jobs by completing Canada's economic recovery, and a reduction of taxes for Canadian families, who the party realizes are struggling under tightened household budgets. Additionally, if re-elected, the party intends to take steps to ensure the elimination of the federal budget deficit by the 2014-15 financial year.

Above all, the fiscal elements of the platform focus on the intended reintroduction of Finance Minister Jim Flaherty's March 22 Budget. The Budget, rejected and condemned by Canada's opposition parties, did not make it to a vote in parliament, due to the collapse of the government under a vote of no confidence. Such opposition action has been labelled unnecessary and opportunistic by the Conservatives, who promise the Budget's reintroduction and implementation, if returned to government. The Budget contained proposals such as a Hiring Credit for small businesses, providing approximately 525,000 businesses with a one year Employers Insurance break, and the extension of the accelerated Capital Credit Allowance rate for manufacturing or processing machinery by an additional two years.

Other business targeted proposals included in "Here for Canada" are: the enhancement of the Worksharing Programme; the extension of the Targeted Initiative for Older Workers; expanded support for the Canadian Youth Business Foundation; the doubling of work exemptions for Canada Student Loans; and the provision of loans for recent immigrants, to help pay for skills, training and accreditation. If re-elected, a Conservative government would also take action on the findings of the Research and Development panel when its findings are submitted later this year.

Additional ambitions include the completion of important trade negotiations, such as the intention to conclude a Canada-EU free trade agreement by 2012, and a Canada-India free trade agreement by 2013, and the continuation of talks with the US to find new ways of cutting regulatory barriers. Work with the provinces to establish a federal securities regulator will also carry on.

As per the fiscal projections of the Budget, the budget deficit is to be eradicated by 2014-15, through three tactics: the completion of a stimulus package; the continuation of specific measures to restrain programme spending; and the conclusion of a comprehensive spending review.

The introduction of new tax breaks is most evident in the platform's non-business oriented sections. A Family Tax Cut would allow spouses to share up to CAD50,000 of their household income for tax purposes (to be introduced following the budget's balancing), the Children's Fitness Tax Credit would provide up to CAD1,000 to help cover registration costs for physical activities, with the introduction of a parallel Adult Fitness Tax Credit proposed also. Harper has also announced his intention to double the Tax Free Savings Account investment cap to CAD10,000.

Commenting on the platform, Harper stressed what he believes to be the two choices faced by Canadians at the forthcoming election: "Between, on one hand, the opportunistic and reckless Michael Ignatieff-led Coalition, with its high-tax agenda that would stall our recovery, kill jobs and set hard-working families back; and, on the other hand, principled leadership and stable national government with our low-tax plan for jobs and growth".

The Liberal party have hit back, with one candidate arguing that: "Unlike the Conservatives, we can keep our promises, because our platform is full-costed and credible". The Liberals's platform has grabbed headlines with its proposals to return corporate tax rates to 2010 levels, cancelling out further planned rate reductions, which it calls unnecessary and unaffordable. The money generated by such action would then be put towards a series of family friendly tax breaks, with the Liberal platform alleging that the strengthening of families would allow the economy to prosper.

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