Social Policy in Ontario

Ignatieff vows to scrap tax cuts for business

Posted on March 29, 2010 in Governance Debates

Source: Toronto Star — Authors: Les Whittington, Susan Delacourt

MONTREAL–Michael Ignatieff promised that if elected, he will cancel $6 billion a year in corporate tax cuts planned by the Conservatives so that his Liberal party can pay for a more caring, environmentally friendly and smarter society in the years ahead.

“We’ve got to create fiscal room to realize some dreams,” Ignatieff said after a three-day policy-renewal conference.

The Conservatives’ commitment to continue phasing in billions of dollars in corporate tax cuts at a time when Ottawa is running a $54 billion annual budget deficit has been harshly criticized by the New Democrats. But Ignatieff’s vow to freeze business taxes came as a complete surprise to observers and Liberals alike.

“We have a clear choice: tackling the Conservative deficit and starting to invest in our future, or giving further tax cuts to corporations before when we can afford them,” Ignatieff explained.

The Harper government plans to bring corporate income tax rates down to 15 per cent by 2017. But by freezing the rate at its current 18 per cent, the Liberals say Ottawa would ultimately have $6 billion in extra annual tax revenues.

This would help a Liberal government bring down the budget deficit to a planned $18 billion or so annually in a few years and also pay for what Ignatieff said would be a very few new spending programs.

“With the deficit that Stephen Harper has left behind, we can’t do everything at once – but we can’t afford to stand still as a country,” Ignatieff said. “If we make smart fiscal choices, we can start moving forward again.”

The Montreal conference was set up as a non-partisan think tank, but by Sunday Ignatieff was clearly reacting to resounding calls throughout the weekend to expand Canada’s role as a compassionate leader in world affairs and improve the social fabric at home.

In a partial preview of his party’s platform in the next election, Ignatieff said that if he gains power he would promote a national campaign to improve education and training programs as part of an effort to create a more modern, efficient economy.

He championed pension reforms to help the millions of Canadians who lack enough savings for retirement and promised to tackle climate change without waiting for action from the United States.

“One thing I don’t want to do is just sit here and wait for Washington to make up its mind and have environmental policy in my country basically the hostage to a grid-lock in Washington,” he said at a press conference after the “Canada at 150” ideas conference wrapped up.

Claiming that foreign policy had been diminished by Ottawa in recent years, he said Canada needs to “think big” and adopt a stance that allows Canadians to “shape the world.”

By “constructively engaging global partners,” a Liberal government would renew Canada’s place on the world stage, he said.

He played down experts’ grim forebodings of entrenched unemployment, shortages of skilled workers and a decline in the standard of living in the years ahead.

“I heard much more hope than pessimism, honestly,” Ignatieff told reporters.

Responding to former Bank of Canada governor David Dodge’s warning that government revenues will not be able to keep pace with health care spending increases, Ignatieff suggested the system could be improved with low-cost disease-prevention initiatives.

“Let’s try and see what we can do about health prevention, health education and health promotion. Let’s see what we can do about home care.

“I believe that this will contain escalating health care costs,” the Liberal leader said.

Ignatieff said the party will spell out exactly how it would pay for the initiatives announced Sunday when it releases a full election campaign platform.

Liberals said the platform would be ready this summer.

Responding to the Liberal announcement, Dimitri Soudas, a spokesperson for Prime Minister Stephen Harper, called the corporate tax freeze a “reckless plan” to raise “job-killing business taxes.”

But Ignatieff framed it as a tough choice that could not be avoided.

“We have to be clear and courageous on this subject,” he said in his wrap-up speech.

“The last thing we want to do is burden our children with debt, and we will not do this as a government.”

His words were in keeping with a theme the convention presented to Liberals – the party needs to give Canadians real choices that will challenge voters rather than middle-of-the-road policies designed not to offend anyone.

< http://www.thestar.com/news/canada/article/786831–ignatieff-vows-to-scrap-tax-cuts-for-business >

Tags: tax

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