MEDIA ADVISORY

OTTAWA—Executive Director Rick Smith will be in Ottawa to react to the 2015-16 federal budget. The budget is widely expected to contain measures that will exacerbate economic inequality, including family income splitting and the doubling of TFSA contribution limits.

1. Family Income Splitting

The federal government plans to spend about $2-billion per year on family income splitting that will mainly benefit high-income, traditional families with a stay at home spouse, to a maximum amount of $2,000 per year. There is no benefit at all from income splitting for single parents, or for two parent families in which both earners are in the same tax bracket, including the middle and bottom income tax brackets; these families with children under 18 represent over half of all families that are the apparent target of the scheme, according to the Broadbent Institute study, The Big Split. Meanwhile, the large savings will go to families with one partner in the top tax bracket and a stay at home spouse with a tax rate of zero. This big pre-election tax cut will directly increase income inequality.

The federal Budget to be introduced on April 21 should have one clear priority – to boost public and private investment so as to create jobs now and a more productive and sustainable economy tomorrow.

The slowing Canadian economy continues to be mainly driven by household borrowing fuelled by ultra low interest rates. With wages stagnant, families are still going deeper into and deeper into debt to spend more than they earn, setting the stage for a nasty housing crash and a rude shock to family finances down the road.

Dana Flavelle / Toronto Star

Unemployment is higher, job quality is mixed and there is evidence pay inequality has increased under the Harper government, according to a report to be published Wednesday.