Ottawa says tax breaks on way for ‘hardworking families’

The Harper government is gearing up for tax breaks aimed at “hardworking Canadian families” and those breaks could be announced within weeks.

Finance Minister Joe Oliver said Tuesday that Ottawa remains on track to generate a surplus of cash collected through taxes and other revenues, and that excess cash will be used in part to cut taxes.

Expectations are building for Ottawa to introduce some measures with the annual fall fiscal update, which will take place around the end of the month or early November.

“We remain on track to balance the budget in 2015 just as we promised Canadians we would,” Oliver told reporters after a meeting with economists in Toronto.

During the last federal election in 2011, Harper’s platform included tax relief measures that have yet to be implemented.

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MORE: Ottawa ‘sets table’ for tax breaks as soon as this fall

Income splitting for couples with children under 18 is one. The measure allows couples with children to reduce their tax burden by shifting income up to $50,000 from a higher earner to the a lower income spouse, which could help lower the household’s overall tax bill.

The move has been criticized in some circles for disproportionately benefitting higher-income households.

Harper also pledged to increase the annual amount savers can contribute to their Tax Free Savings Account. Expectations are for Ottawa to double the amount to $10,000.

There’s also the possibility of an outright lowering of income taxes, though that measure would be far more expensive than others. TD Economics estimated last week a one-percentage point reduction in personal tax rates would cost Ottawa $35 billion over five years.

Dual housing market

The minister also said Ottawa doesn’t see a national housing bubble forming, but noted that conditions in certain centres – three specifically: Vancouver, Calgary and Toronto – are being watched closely.

“There is a dual market. Toronto, Vancouver, Calgary have seen price increases that the rest of the country have not. This is something that we are of course monitoring; we take this issue seriously,” he told reporters.

“We’ve taken quite a number of steps in regard to the residential mortgage market and have taken the froth, we believe, out of the market.”

MORE: Canada’s housing market come down to just 3 cities

— With files from Canadian Press