No new tax increases planned, Flaherty says
Government intends to cut spending while driving growth
We don’t raise taxes. We reduce taxes and we try to watch our spending, and we’ll do some more of that in the budget.
JIM FLAHERTY
FINANCE MINISTER
TORONTO — The federal budget will not be a draconian document that mirrors plans put forward by debt- ridden European countries, Finance Minister Jim Flaherty promised Thursday.
That’s because Canada’s economic landscape is nowhere near that of countries like Greece, which was recently approved for a 130- billioneuro bailout in the largest sovereign restructuring ever attempted.
“We are not one of the countries, many of them in Europe, that have run up deficits for a long period of time, accumulated substantial debt and must really act dramatically — some of them in a draconian way in order to get their house in order again,” he said during a funding announcement in Toronto.
The government will be taking a “moderate” instead of austerity- driven approach with the budget, expected to be tabled some time next month. Don’t expect any new tax increases. “There shouldn’t be any tax increases in our federal budget,” he said during a funding announcement in Toronto. “But we will be conscious of the need to have adequate assistance for people who need to engage in the job market.”
“We don’t raise taxes,” said Flaherty. “We reduce taxes and we try to watch our spending, and we’ll do some more of that in the budget.”
The Canadian government, he indicated, needs to work on ensuring that it can cut spending while still driving economic growth.
The federal government is expected to come in well under its projection for a $ 31- billion deficit for fiscal 2011- 12. In January, TD calculated the deficit would come in at between $ 27 billion and $ 28 billion.
Recently, the government has forecast that the budget will also include changes to Old Age Security.
Flaherty emphasized Thursday how important it was that the economy be set up for the future.
“We do have to look ahead, look down the road so that we can make sure that the important government programs we have are available down the road for younger Canadians,” he said. “So we have intergenerational equity.”
This success can only work if provincial governments also follow suit and rein in their spending too, he said.
“It’s very important the provinces also do move in the direction of getting their fiscal houses in order because the long term effect of accumulated deficits, large public debts, are not good, said Flaherty.