Budget sets the stage for income splitting, a costly and unfair tax giveaway
OTTAWA—Despite its commitment to eliminating the national deficit, Stephen Harper's 2014 budget denies Canadians the help they need to reduce inequality and create good jobs. The budget also prepares the way for the implementation of income splitting, a $3 billion tax giveaway that offers no help to the Canadians who need relief the most.
With almost 1.5 million unemployed workers and a record 13% youth unemployment rate, Canadians need a government that prioritizes productive investments and secure, well-paying jobs over attacks on unions and ads for a phantom jobs grant. A lack of much-needed infrastructure investment further compounds problems for Canada's municipalities.
"The locking-in of $14 billion in pre-announced spending cuts does little to reverse the growing trend of precarious, part-time jobs, record-high levels of household debt, and persistent income inequality," said Broadbent Institute Executive Director Rick Smith. "In a slow economy like ours, austerity budgets like this one are self-defeating."
The budget paves the way for income splitting, a plan that would only affect 14% of Canada's wealthiest families. Finance Minister Jim Flaherty's weekend assertion that "there are some people who benefit and lots of people who don’t in that world of income splitting" casts serious doubt on a plan that would cost almost as much as the projected budget surplus.
"Many economists, including the IMF, agree that there's no need for the government to balance the books on the back of such deep cuts," added Smith. "Does this budget help make Canadians' lives better than they were last year? Most of us would clearly say no."
For more information, please contact:
Mike Fancie, Broadbent Institute
613-866-3606 or mfancie [at] broadbentinstitute [dot] ca