Finance Minister Jim Flaherty downplayed a report on Tuesday that suggested the federal government will announce significant tax cuts in next month's fiscal update.
Ottawa was abuzz over the possibility of a surprise mini budget -- after a media report suggested the Tories were planning to take their tax-cut promise in the throne speech and put it into legislation as early as November.
"We are planning a budget for the spring," Flaherty told a news conference in Ottawa, responding to the report published Tuesday in the National Post newspaper.
"The fiscal update is a fiscal update. I'll be talking about where we are in terms of revenues, corporate revenues and personal income tax revenues, surplus and debt payments and we'll have a budget in the spring."
In their throne speech, delivered last week by Gov. Gen. Michaelle Jean, the Tories promised a one per cent reduction in the GST -- as well as a multi-year plan to lower personal and corporate taxes.
As a money bill, the House of Commons vote on the cuts would be considered a matter of confidence. If the opposition votes against it, the government would fall, and the Tories would enter into a federal election campaign with an issue close to many voter's hearts and pocketbooks.
According to the report, the Conservatives say the average Canadian family would save about $700 a year under their tax-cut plan.
Flaherty would not specify what will be in the fiscal update, but he said he intends to "follow normal procedures in the spring budget."
Flaherty said no date has been set for the update but he expects it will take place in the next few weeks.
CTV's Ottawa Bureau Chief Robert Fife says if the government does in fact introduce a mini budget in November, it could force a winter election. The Liberals have been opposed to a GST cut -- an important consumption tax -- and prefer personal tax cuts instead.
On the other hand, Fife said the Liberals might choose to support the government on this bill, if in fact it is introduced -- thus avoiding the negative fallout that could go along with voting against tax cuts -- and wait for another opportunity to defeat the government on another matter.
Political science professor Peter Woolstencroft says the Tories are likely inspired by better polling numbers and disarray within the Liberal Party, and are trying to force an election.
"The Conservatives want an election, but they can't call one because they've committed themselves to fixed election dates. So they can only cause an election to happen by forcing the opposition parties to vote against them. That's the important dynamic at play here," Woolstencroft told Â鶹´«Ã½net.
Political observers point to the difficult situation that the Liberal party, of which few members want an election at this time, finds itself.
"They're supposed to be the Loyal Opposition, so they're supposed to be opposing the government, setting out a different path," said Woolstencroft.
"But so far it looks like they're going to support the government -- and that doesn't add up. The opposition is attacking the government but is supporting it."
And should they continue to support the government on upcoming confidence tests, said Woolstencroft, "they run the risk of losing their left-wing supporters to Jack Layton and the NDP who will gladly take them. So you'll notice Jack Layton saying 'look, we're the only opposition party out there who will take on Stephen Harper and the Tory agenda.'"
But the Tories aren't on easy street either, points out Fife. While some polls have put them up higher, a recent Strategic Counsel poll had them ahead by only six points against the Liberals. And the government historically loses four or five points during an election campaign.
"So it doesn't make particular sense for Mr. Harper to force an election at this particular point," said Fife. "What he may be doing -- and this is just a possibility -- is to force the Liberals' hands to get them to pass some other tax measures for them in advance of the big budget, where there will be a lot of tax cuts."
Woolstencroft said for the Conservatives to come out with a majority in the next election, there would have to be a "big shift" in Ontario and large urban centres such as Toronto, Montreal and Vancouver.
