Tories paving the way for promised big-ticket tax cuts

“The Conservative government will squeeze public-service salaries and sell off government assets to enter the next federal election with a budget surplus of at least $3.7-billion, paving the way for promised big-ticket tax cuts,” Bill Curry of the Globe and Mail wrote yesterday. “Finance Minister Jim Flaherty’s economic update Tuesday reflects the political motivation driving the Conservative government’s push to show an election-year surplus. And it comes as the Tories, a government that has branded itself as economic stewards, struggle to put the Senate expenses scandal behind them.  In his last budget, Mr. Flaherty projected a 2014-15 deficit of $6.6-billion, and a modest surplus of $800-million a year later.  But Mr. Flaherty is now ahead of schedule, raising the estimated surplus for 2015-16 to $3.7-billion. There are also several conservative assumptions in the numbers, meaning the surplus could easily come in higher than currently planned.  The federal spending plan includes several factors that could easily plump up Ottawa’s bottom line, allowing the Conservatives to deliver on tax cuts that were promised during the 2011 election but were contingent on balanced books. Those promises include income splitting for parents and new and expanded fitness tax credits.  Mr. Flaherty, who reiterated that he plans to run in the next election, said the government must get its financial house in order before it commits to tax cuts.” Read the full article here. | Raymond Matt, CFP, CLU, TEP, CHS

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