Flaherty will just say ‘No’
Major spending plans unlikely: minister
WAKEFIELD Finance Minister Jim Flaherty says Canadians shouldn’t expect any significant new spending in October’s throne speech and heading into the 2015 election as the Conservatives look to balance the books — but insists the government plans on keeping a multibillion-dollar promise to introduce incomesplitting for families.
Flaherty also noted Wednesday that while there are some “bumps” in the condominium market, especially in Toronto and Vancouver, the government has “no plans” at the moment to further intervene to cool the Canadian housing market.
The minister met Wednesday with academic and business leaders just north of Ottawa at his seventh annual national policy retreat, at a cost of thousands of taxpayer dollars, to pick their brains about what’s needed for the Canadian economy and incorporate the input in the next federal budget.
The finance minister told reporters he doesn’t anticipate any more significant spending cuts will be needed beyond what has already been announced in order to meet the Conservative government’s promise to eliminate a deficit estimated at $18.7 billion and balance the books by the 2015 election.
However, he also said it’s “unlikely” Canadians will see any major new spending initiatives over the next two years leading up to the election, signalling the Conservative government’s throne speech in October also won’t have any expensive new promises.
Flaherty quipped that his staff gave him an ink stamp with the word “No” on it a few years ago as a Christmas gift, and that he’s ready to use it and turn down expensive spending requests.
“I intend to use (the stamp) a lot in the next few months,” Flaherty told reporters.
“We will do what it takes to balance the budget in 20152016, not for the sake of balancing the budget, but to put Canada in a position of strength, so that we can react adequately to any sort of economic pressure that comes from outside our country,” he added. Flaherty said the government still intends to keep its promise from the last election campaign to introduce income-splitting for couples with children under age 18 — at the cost of $2.5 billion a year — but only once the budget is balanced.
“It is part of the government’s policy. It was part of our platform. We’ll be guided by where we are fiscally in 2015, but we’re a fairly frugal government and I would hope that we’ll be able to fulfil that commitment,” Flaherty told reporters.
Asked whether he’s looking to introduce the income-splitting in the 2015-16 fiscal year, Flaherty said that’s his hope but that “we’ll have to see.”
The government also promised last campaign to double the annual savings limit in tax-free savings accounts.
Ian Lee, assistant professor at Carleton University’s Sprott School of Business and a participant in Flaherty’s policy retreat a few years ago, believes there’s a lot of value for the government in hosting the meeting, despite the cost to taxpayers.
Flaherty gets “real blunt talk” from the academic and business leaders in the room, as well as a handful of folks from other groups, he said.
Lee said the Conservatives still have plenty of opportunities to pursue bold policy moves that don’t cost much but have big impacts on Canadians, such as improving competition in the wireless industry and other sectors, allowing additional foreign investment and closing tax loopholes.
“Just because they don’t have a lot of cash doesn’t mean the minister of finance doesn’t have a lot of levers in his policy tool kit,” Lee said.