Decision on income splitting lies with PM: Flaherty

Above: Finance Minister Jim Flaherty discusses this week’s federal budget.

Whether the Conservatives move forward with their long-promised income-splitting scheme is up to the prime minister, Finance Minister Jim Flaherty said.

The tax perk has become the subject of scrutiny, with some critics saying it amounts to little more than a cost to government that benefits few, affluent households.

“It’s a good debate,” Flaherty said in an interview on The West Block with Tom Clark. “And I think in the next year it will be healthy for Canada to have a fulsome discussion about that issue, because there are some people who benefit, and some who don’t in that world of income-splitting.

Whatever the outcome of that national discussion, Flaherty said he won’t be the one deciding whether the 2011 promise is kept.

Story continues below advertisement

“That will be up to the prime minister at the end of the day, whether he chooses to go ahead with it or not,” the minister said.

WATCH:  Panellists Mark Kennedy of Postmedia News and Barrie McKenna of the Globe and Mail weigh in on why the Conservatives are pushing to balance the budget by 2015.

Flaherty said the 2014 budget, coming down this week, will stay the course and continue paving the way for the Conservatives to reach their goal of posting a surplus in 2015, just ahead of the next federal election.

The extra cash would allow them to pay for promises made during previous elections, including income splitting for tax purposes.

The minister and his department have played down this budget more than in previous years — but that’s just because it’s all part of a plan, Flaherty said.

Story continues below advertisement

READ MORE: Federal budget lockup includes free lunches 

“In 2009 we decided run a large deficit because of the great recession,” Flaherty said. “But we always planned to come back over the course of the medium term. And we are coming back year after year after year.”

The budget will come on the heels of a recent report that showed the Canadian economy gained 29,400 jobs in January, after a downturn in December.

Statistics Canada reported the unemployment rate slid 0.2 percentage points to 7.0 per cent for January, as the number of full-time jobs increased.

But analysts cautioned that the employment trend is still sluggish.

– With files from The Canadian Press

Sponsored content