Friday, October 31st7.9°C
23888
23129

Jury still out on income splitting as new minister splits hairs on issue

OTTAWA - The Harper government has a new finance minister, but not necessarily new clarity on fulfilling its 2011 campaign promise on income splitting.

Since taking over the finance portfolio last Wednesday, Joe Oliver hasn't repeated his predecessor's concerns about an expensive tax cut that critics say will benefit only a minority of families, and favour those at the top of the income scale.

But he hasn't been unequivocal either, as Prime Minister Stephen Harper appeared to be last month when he said "income splitting has been a good policy for seniors in Canada, and it will also be a good policy for Canadian families."

Asked about it on his first day at his new post last week, Oliver appeared closer to Harper's apparent position than he was to Jim Flaherty's, although he did give a nod to his predecessor's call for a closer examination by stating that he was "going to be looking at the details."

Asked Tuesday whether he shares Flaherty's concerns that the pledge to allow families with dependent children to transfer up to $50,000 from the highest income earner to the lowest for tax purposes, Oliver was less than crystal clear.

"How the benefit will be distributed is obviously one of the issues that we look at, we look at the issue of fairness," he said.

"The point is we intend to lower taxes for families and when the next budget is announced we'll have the specific provisions. That's a decision for the next budget but the prime minister was very clear that income splitting can be a good policy for families."

Income splitting is a popular policy for the Conservative base because it is most helpful for traditional one-income families, where one spouse, usually the mother, stays home to take care of the children.

Employment Minister Jason Kenney is a strong proponent of keeping the promise and enacting a policy that he says "supports families who are investing in their kids."

He has also said that income splitting "doesn't benefit any particular family model; what it does is eliminate a form of unfairness."

But economists who have analyzed the Conservative plan says it will give the most benefit to families who need it the least, and no benefit at all to 85 per cent of Canadian households. And the program is costly at $2.7 billion a year.

An often-quoted C.D. Howe Institute analysis concluded that 40 per cent of the benefits will go to households with income of over $125,000. Meanwhile, single-parent families who tend to need it the most will be shut out. The program also does nothing for dual-income families where the couple have similar earnings.

Experts have said there are better ways of delivering tax relief to families, including increasing benefits under the Universal Child Care Benefit.

However, some have also noted that there are ways to tweak the income splitting proposal so that the benefits are more broadly distributed.

That would allow the Conservatives to say they have indeed brought in income splitting, just not the one they unveiled in the 2011 election campaign.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14458.69-68.88
S&P CDNX771.65-9.42
DJIA17195.42221.11
Nasdaq4566.138+16.912
S&P 5001994.65+12.35
CDN Dollar0.8927-0.0007
Gold1172.90-25.70
Oil80.33-0.57
Lumber322.40-1.20
Natural Gas3.715+0.066

 
Okanagan Companies
Pacific Safety0.11+0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.150.00
Cantex0.045-0.015
Anavex Life Sciences0.1711-0.0089
Metalex Ventures0.0350.00
Russel Metals32.22-0.35
Copper Mountain Mining1.97-0.05
Colorado Resources0.14+0.005
ReliaBrand Inc0.012-0.004
Sunrise Resources Ltd0.05+0.025
Mission Ready Services0.375+0.005

 





FEATURED Property
195161523 1925 Baron Road
3 bedrooms 1 baths
$57,300
more details
image2image2image2
Click here to feature your property
Please wait... loading


Empty nesting: financial issues

Now that the children have ‘left the nest’, it is a good time to step back and take stock of your financial situation. Being on your own will probably cut household costs to some extent, b...


Keep your haunted home safe

Eerie sounds, spooky lights and Jack-o’-lanterns aglow—extra efforts at Halloween will keep visitors coming back for both tricks and treats. However, to keep the fun going, it’s imp...


What I learned in China

Photo: ContributedI will never be an expert on China. It is just too big, too complex and too old with layers of history and meaning that would take several lifetimes to unravel. As I said to my hosts...

_








Member of BC Press Council


22707