Tax cuts for families still on table

Finance Minister Joe Oliver won’t raise taxes or introduce aggressive stimulus programs to boost the economy.

That was his main message at a Canadian Club luncheon today in Toronto, where he claimed, “No country can tax its way to prosperity.”

He added he’s not willing to “back reckless schemes [and] contribute to higher debt levels. We’ve worked too hard” to allow the country to slip back into a deep deficit.

In Oliver’s view, “a strong…growing economy generates tax revenues without having to raise tax rates. This revenue [can then be] used to pay for important programs such as health care, education [and] retirement benefits…Economics is about people, [and about improving] our standard of living.”

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So, along with balancing the budget, one of his main priorities is to help Canadians keep more of their money. Already, he says the average four-person family has benefited from tax cuts of nearly $3,500 each as a result of Budget 2014. They’ve also benefited from a 10% increase in wages and a more than 45% jump in net household income in the past few years.

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Also, Oliver recently refused to intervene when BMO announced a half-point cut to its key mortgage rate. Former minister Jim Flaherty chided BMO for a similar move in 2013.

In the 2015 Budget, Oliver says he’ll introduce more tax cuts for families. Though he didn’t provide details, Oliver confirmed the federal government’s deficit is expected to decline to $2.9 billion by 2015.

In 2016, he predicts there’ll be a surplus of more than $6 billion. When asked how the funds will be spent, Oliver simply stated that though Canada has added more than 1 million jobs since 2009—more than 80% of those positions have been full-time—too many people continue to struggle.

As a result, the surplus will have to be spent responsibly on “paying down debt, reducing taxes and on expenditures.”

Watch out for EMs

Canada’s performed well over the past five years, but global competition is heating up, says Oliver.

To date, we’ve primarily contended with the U.S. and Europe when it comes to exports and attracting foreign investment, he adds. Now, however, Canada has to stay ahead of markets such as China, Brazil and India.

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To achieve that, we need to boost our resource sector and focus on business and infrastructure spending, says Oliver.

Along with planning to better support the economy, he says he’s watching how deflation is affecting the global landscape, and particularly at how it’s weighing on Europe.

In his first year as finance minister, Oliver plans to:

• pass the Budget 2014 bill;
• talk to officials and Canadians across the country, and meet with international counterparts;
• look for more global trade opportunities;
• take research and development findings “from the lab to the marketplace” to benefit businesses;
• boost exports and infrastructure; and
• support skills training programs to help eliminate labour shortages.

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