Recommending Balanced Budget and Tax Relief

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The meeting with the finance minister is part of the minister’s pre-budget consultations. Minister Flaherty invited the CTF to the consultations to discuss measures to stimulate the economy and to keep Canada competitive over the long term. CTF spokesman Kevin Gaudet said: “The CTF appreciates the opportunity to make the case for a balanced budget and for personal and business tax relief. So far, pre-budget talk has focused almost solely on increased spending and deficits. The CTF strongly urges the federal government to balance the next budget.” The CTF is calling for:

a balanced budget;

avoidance of corporate welfare and bailouts; and,

tax relief and tax reform - lower, simpler, flatter taxes for personal income taxes.

For business taxes, a reduction in EI premiums for employers - making it equal to the employee amount.

The government should also consider accelerating the planned reduction of the general business tax rate now at 19 percent to 15 percent by 2012.

According to the KPMG corporate and income tax surveys of 2008, Canada ranks 23rd for personal taxes and 27th for corporate taxes in a 30 country comparison of OECD nations. Canada could look to other countries for inspiration for further tax relief. It is being reported that U.S. President-elect Obama plans tax cuts as stimulus amounting to some $300-billion in personal and business tax relief. In Britain they implemented a sales tax (VAT) holiday of 2.5 percent as a tax measure for stimulus as well. With respect to the longer term Gaudet concluded: “In order for Canada to be competitive internationally and for the government to have financial flexibility over the long term, deficits must be avoided and debt payment should be mandated by law.”

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