Canadians must wait to see where Trudeau will find $2B for child-care plan
Michelle Zilio, CTVNews.ca
Published Sunday, May 10, 2015 10:05AM EDT
Last Updated Monday, May 11, 2015 12:00AM EDT
Liberal Leader Justin Trudeau says Canadians will have to wait to see how he will come up with the $2 billion he needs to pay for his proposed child-care benefit, which he unveiled last week.
Speaking to CTV's Question Period, Trudeau said his economic plan would be "full-costed" and "responsible." But he did not specifically say where he would find the $2 billion he still needs to pay for his proposed Canada Child Benefit.
"People have been very patient over the past months as we put forward our economic plan and I know they're going to be happy to see what we put forward in the coming months as well," said Trudeau.
The proposed Canada Child Benefit, which would roll two existing child benefits into a single, more generous monthly tax-free benefit, would cost an extra $4 billion compared to the existing child-care rebate.
He has said he plans to pay for some of the $4-billion child benefit by nixing the Conservative government's $2-billion income-splitting plan. While Trudeau did not specifically say where he will find the other $2 billion, he implied that he will rely on the government's projected surplus.
"We're going to be making different choices than the Conservatives in how we spend that money, along with the fact that we'll be in $1.7 billion of surplus," said Trudeau.
The Canada Child Benefit is part of Trudeau's recently-proposed economic policy. Trudeau also intends to scrap the Conservative plan to increase the Tax-Free Savings Account (TFSA) cap to $10,000.
And he's promising a tax cut for anyone earning $44,701 to $89,401 a year, which would cost $3 billion annually. He plans to pay for that by imposing higher taxes for those earning more than $200,000 a year.
"I think there's nothing wrong with asking those who have done very, very well over the past few years to help out a little more because everyone is seeing the stalling of the middle class," said Trudeau.
But former Statistics Canada chief economist Philip Cross says the measure will encourage tax avoidance amongst higher earners, raising questions about whether Trudeau will be able to raise the $3 billion he needs for his proposed middle-class tax cut.
"These are people who are best positioned to take advantage of loopholes in the system. The idea of soaking the rich to pay for benefits for other people never works out," said Cross.
Trudeau blamed Harper for making more tax loopholes available to the rich, and said the Liberals plan to strengthen the tax code to discourage said tax avoidance.
Conservative spin a 'head scratcher'
The government did not waste any time attacking Trudeau's tax plan last week. Employment Minister Pierre Poilievre said Trudeau’s plan to scrap the doubling of the TFSA is actually a tax hike for the middle class, because most of the people who have maxed out their accounts earn less than $60,000 a year.
Trudeau said he found the government's spin baffling.
"This is a little bit of a head-scratcher," said Trudeau. "The fact that the Tories are making a big deal out of this I think really highlights the fact that they don't understand that people making less than $60,000 a year don't have a $10,000 at the end of the year that they can put into a Tax-Free Savings Account."
Trudeau will address the Canadian Club in Toronto on Monday, where he will speak to some of the wealthier Canadians he plans to hit with higher taxes.