Canadians are unlikely to see permanent, across-the-board reductions in their tax burden in Tuesday’s budget because doing so could condemn Ottawa to perpetual budgetary deficits, Finance Minister Jim Flaherty confirmed yesterday.
The government is determined to reverse its negative fiscal situation as soon as possible and will lay out deficit escape tactics in the budget, Flaherty said.
“We will not create a permanent, long-term deficit for Canada,” he said. “In our economic plan, we will show how we will exit from deficit as the economy exits from recession.”
Instead of broad-based tax cuts, the Conservatives’ budget will contain short-term breaks and incentives such as tax credits for home renovations or tax savings for companies that invest in advanced or green technologies, sources have said.
Flaherty also reiterated the Harper government’s commitment to use the budget to pump up the ailing economy through increased federal cash outlays — a strategy that could drive this year’s budget deficit as high as $40 billion.
With the economy suffering the worst conditions in decades, the Conservatives are promising a wide-ranging package of measures to stimulate growth and help workers and companies being hurt by the downturn.