Canada's economy remains rock-solid despite the many challenges facing it -- and low taxes will help it stay that way, says Prime Minister Stephen Harper.
Harper promised Thursday that to maintain and enhance Canada's prosperity over the long term, his Conservative government would develop "one of the most competitive and attractive tax environments on the planet."
Given challenges such as weakness in major export markets and the rapid rise in the Canadian dollar, which soared to US$1.10 on Wednesday before sagging, the government decided to announce new tax cuts in its recent financial statement to spur optimism, he said.
Those new cuts reduced taxes by $60 billion. "The total actions taken by this government to date are approaching $200 billion over the next five years," Harper said.
"Federal taxes will fall to the level they were at in the last year (1963) of the Diefenbaker government -- before the policies of the late 1960s, before Trudeau -- back to the lowest level in nearly half a century," he said.
This will increase take-home pay for workers and help small and large businesses alike, Harper said.
Corporate taxes will eventually fall to 15 per cent -- "the lowest corporate income tax rate among the major developed economies," he said.
Harper also took credit for 600,000 low-income Canadians being taken off the income-tax rolls.
GST, Liberals
In bragging about cutting the GST being reduced from seven per cent to five per cent on his watch, Harper took a shot at economists who criticized the GST cut.
"These are economists who believe the GST is a good tax; which of course comes from the school of economics that believes there's such a thing as good taxes," he said.
Economists who oppose the GST cut generally say it would be better to reduce personal income taxes by the same amount, as that would encourage savings and investment rather than spending.
Liberal Leader Stephane Dion mused after last week's economic statement that if his party were to form the next government, they might restore the cuts to the GST.
In response, the Conservatives recently rolled out new TV ads warning that Dion would raise the GST if he were to become prime minister.
Harper said none of the three opposition parties supported tax relief.
"The Liberals' opposition to tax cuts should deeply trouble you, should deeply trouble every Canadian taxpayer," he said.
In warning of a possible GST hike by the Liberals, Harper said former Ontario NDP premier Bob Rae is writing the party's platform.
Rae "spent five years using Ontario as a lab experiment for tax, spend and borrow policies," Harper said.
The big-spending promises of the Liberals could only be funded by tax hikes or deficits, he said, adding, "it's not worth the risk to our economy."
Harper said his government is focused on controlling spending and reducing federal government debt.
The government still has the flexibility to help the forest industry or to allow capital write-offs for manufacturers, he said.
Canada's economy remains resilient. Even Ontario, which has seen its manufacturing sector hit hard, has seen two straight quarters of job growth, he said.
"The fundamentals of our economy are as solid as the Canadian shield," he said, referring to a remark last week by Finance Minister Jim Flaherty.
"And keeping taxes down, not raising them back up, is key to keeping this country moving in the right direction," Harper said.
