Flaherty says to expect surprises in budget

Mon Feb 25, 2008 1:30pm EST
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OTTAWA (Reuters) - There will be a surprise or two in the 2008-09 budget to be released on Tuesday, Finance Minister Jim Flaherty said on Monday, without giving details.

Flaherty didn't rule out a policy change on the capital gains tax, an election promise that has yet to be fulfilled.

"That is an outstanding commitment that we've been paying a lot of attention to but you'll have to wait for the budget to see what we're able to do," he told reporters.

Before being elected with a minority government in 2006, the Conservatives promised to defer the tax on capital gains for investors who reinvest their assets within six months.

That has proven a complex measure to implement and Flaherty has recently suggested his office is studying alternative proposals to help investors subject to the tax.

Asked if the budget held any surprises, Flaherty said, "one or two."

Flaherty will likely squeeze out as many goodies as possible from his third budget, despite the strong economic headwinds coming from south of the border.

That's because the budget has the potential of bringing down the minority government and forcing an election if it is not supported by any of the opposition parties.

Still, Flaherty tried to temper expectations.   Continued...

<p>Canada's Finance Minister Jim Flaherty arrives to speak to journalists following Question Period on Parliament Hill in Ottawa February 11, 2008. REUTERS/Chris Wattie</p>