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Layton Calls On Harper To Defer Canadian CIT Cuts

by Mike Godfrey, Tax-News.com, Washington

23 February 2010


Leader of the New Democratic Party (NDP) of Canada, Jack Layton, in a 30-minute meeting with Canadian Prime Minister Stephen Harper, urged the deferral of the Conservative government’s plans to slash the corporate income tax rate twice in quick succession, stating instead that financial support should go to the needy.

The meeting was held ahead of the release of the Conservatives’ federal Budget, scheduled for March 4. The minority Conservatives, in order for the budget to be adopted, must get at least one party on-side with its proposals.

During the meeting, Layton underscored the party’s firm belief that forging ahead with the corporate tax cuts would be inappropriate, underlining that Canadian corporations were not in need of fiscal support, but instead the jobless and the elderly were in greater need. Layton urged instead that the CAD6bn (USD5.75bn) that the government could save by deferring the cuts, would be better spent through welfare and job creation. "The banks and oil companies don't need the support; the only thing that they seem to want to do is give themselves bonuses,” Layton jibed, speaking later to reporters.

Since entering into power in 2006, Harper championed the previous Liberal government’s five-year plan to cut the corporate income tax rate, and it would appear he is unlikely to reconsider his stance. Canada’s Federal CIT is set to drop further, from 19% currently, to 16.5% in 2011 and to 15% in 2012.

Speaking on behalf of the Conservative government after the meeting, spokesman Dimitri Soudas told The Canadian Press that the government was standing steadfast by its proposals, and did not intend to perform a u-turn on the planned corporate tax cuts, stating: “We continue to believe that low taxes are a good thing for the economy; these tax cuts we've put in place are for the good of the economy.”

According to Layton, speaking after the meeting, discussions were held in a “cordial” atmosphere. With 400,000 jobs lost to the recession, and the national unemployment rate at a 12-year high with more than 8% of the population out of work, both Layton and Harper agreed on a major issue: that the budget should encourage job creation. "The proposition to the Prime Minister was simply that; we're not out of the recession until people are back at work. He said he agreed with me," Layton told reporters after the meeting.

The NDP leader voiced his support for the extension of Employment Insurance benefits, and the reintroduction of the Home Renovation Tax Credit, which was allowed to expire in January.

In his comments after the meeting, Layton said that although Harper had not provided any commitments on important matters to the NDP, he disclosed that his party would not be committing to voting down the budget before it is released on March 4.


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