Harper plays down chances of tax cuts in budget

Wed Feb 16, 2011 12:29pm EST
 
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OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper played down the chances that next month's budget would contain tax cuts, saying in an interview broadcast on Tuesday that people were not going "to have a lot of goodies".

The minority Conservative government insists the budget will mark the end of a two-year C$48 billion ($48.5 billion) stimulus program designed to fend off the worst of the economic crisis.

It says one of its main priorities now is to eliminate a government budget deficit forecast to have hit C$56 billion in the 2009-10 fiscal year.

"We're looking for ways in the budget that we can continue to support growth, but obviously ways that aren't expensive to the treasury and will allow us to keep our deficit coming down," Harper told the 1310 News radio station.

"I don't think Canadians are expecting that they are going to have a lot of goodies. I think everyone understands the government has constrained financial room. But at the same time we're committed to not raising taxes."

The Conservatives, who only have a minority of seats in the House of Commons, could be defeated over the budget if all three opposition parties vote against it.

Harper repeated his position that an election now would be an unnecessary distraction.

The Liberals, the biggest opposition party, are vowing to scrap C$6 billion in annual corporate tax cuts if they win power.

"Raising taxes at this point in the credit recovery I think would be just about the dumbest thing any government could possibly do," Harper said.

($1=$0.99 Canadian)

(Reporting by David Ljunggren; editing by Peter Galloway)

 
<p>Canada's Prime Minister Stephen Harper speaks during Question Period in the House of Commons on Parliament Hill, February 16, 2011. REUTERS/Chris Wattie</p>