UPDATE 3-Canadian PM Harper unveils family tax breaks ahead of election

Thu Oct 30, 2014 4:42pm EDT
 
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(Adds Harper quote, budget expectations, paragraphs 4, 12)

By Alastair Sharp

VAUGHAN, Ontario Oct 30 (Reuters) - Canadian Prime Minister Stephen Harper unveiled C$26.76 billion ($23.89 billion) in family tax cuts and benefits over six years on Thursday, which will start flowing to voters over the coming year as the country gears up for an election next October.

Normally, tax measures are only introduced in the government's spring budget. But the timing of Harper's move means that, instead of seeing election promises, voters will start seeing actual government checks and lower taxes before next October's election.

Having the tax measures already in place could also make it more difficult for opposition parties to pledge to revoke them if elected, limiting their room for maneuver against the governing Conservatives in the upcoming campaign.

"We're doing this in a way that assures that the things we promised in the last election will actually reach people in the life of this Parliament," Harper told reporters.

The most controversial measure would allow "income-splitting" for parents with children under 18. That would let a parent transfer C$50,000 of income for tax purposes to a lower-earning spouse, where the income would be taxed at a lower rate.

The plan would be of most benefit to families in which one spouse, such as a stay-at-home parent, has substantially less income than the other. The tax break will be capped at C$2,000, which limits its cost to about C$2 billion per year instead of the C$2.5 billion estimated in the Conservatives' 2011 election platform.

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