Business

Photo: CTV

Finance Minister Jim Flaherty talks about the budget and job growth in Canada as he shows off his budget shoes from Roots

While Finance Minister Jim Flaherty will cut spending by about $3 billion in his latest, and perhaps last, budget, he is also expected to boost federal coffers by closing some tax loopholes and going after Canadians who hide money from the tax man in offshore bank accounts.

The document is expected to include measures to boost manufacturing, match skilled workers to jobs and maintain infrastructure funding to Canada’s cities.

But in addition to trying to spur job growth, Flaherty intends to raise cash for these initiatives by going after tax cheats. 

Dennis Howlett of Canadians for Tax Fairness said offshore bank accounts not only hide Canadians’ money from the Canada Revenue Agency, but can also conceal their identities, making it harder for authorities to track them down.
“It’s a very big problem,” Howlett told CTV News. “It’s a global problem but Canada is affected, as well. It’s hard to know exactly how much money Canada is losing. We estimate that it’s in the tens of billions of dollars.”

Flaherty is also expected to close some corporate tax loopholes, though those details remain largely under wraps. Howlett said there are a lot of corporate tax credits that cost hundreds of millions of dollars a year. 

Case in point, he said, when companies claim an entertainment tax deduction for corporate boxes at arenas and stadiums “when in fact no business” gets done at sporting events.

Closing that loophole alone, Howlett said, would save $500 million.

In his latest budget, Flaherty will be weighing the need to rein in spending to meet a pledge of a balanced budget by 2015 with the need to boost economic growth, which is projected to remain at around a low of two per cent.

During his traditional pre-budget shopping trip for a new pair of shoes Wednesday, Flaherty said the document keeps in mind that “we need to take some steps to encourage growth and make sure we continue that modest growth, (and) hopefully a little better than that.”

Flaherty said specific measures have been included “particularly to help manufacturing enterprises in Canada.”
There will also be measures to help get younger Canadians into skilled trade jobs. Statistics Canada estimates there are about 240,000 job openings across Canada, many for high-demand trades workers like sheet metal workers.