Prime Minister Stephen Harper explained his government’s strategy for economic policy Friday in a speech to the Economic Club of Toronto. He outlined the Conservatives’ past two years in office, saying that roughly half the fiscal allocations between 2006 and 2010 have gone to tax reduction, with the remainder going to new spending and paying down the debt.
“In these uncertain economic times, some are suggesting higher spending, higher debt, business bailouts or even a return to protectionist trade policies,” he said. “But that’s not what Canada needs, nor is it what Canadians want. They want lower taxes, less debt and carefully targeted assistance that helps workers, families, communities and businesses build a better future.”
Calling the new Tax-Free Savings Account the “centerpiece of the budget,” Prime Minister Harper said that the savings vehicle will create a pool of national savings and may help to avoid future economic troubles such as the sub-prime mortgage crisis in the U.S. “The Tax-Free Savings Account will encourage Canadians to save for retirement, and is important both for individuals as well as families,” he said. “As a result, the Canadian economy of our children will be much stronger than ours is today.”
Harper spoke at length about lowering provincial business taxes, and had high praise for Manitoba, P.E.I. and B.C. for their tax reduction efforts. “These provinces get it,” he said. “They’re well on their way to making Canadian companies competitive in the global market.” He challenged the provinces to match the federal tax cuts his government is making, with the overall goal of improving Canada’s competitive edge. “As soon as the provinces rise to the challenge, we will soon have the lowest business taxes in the G7,” he said.
In a veiled reference to Ontario, he underscored the province’s need to lower taxes. “Above all else, the Canadian economy is dependent on a healthy manufacturing sector,” he said. “Without low business taxes, this will be jeopardized.”
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