April 22, 2015 / 4:23 PM / in 3 years

Populist Conservative budget puts Canada's Liberals in election squeeze

OTTAWA (Reuters) - Canadian Prime Minister Stephen Harper, facing a battle to win reelection to a rare fourth term in October, has boosted his chances with a populist budget expected to energize his base.

Canada's Prime Minister Stephen Harper (L) and Finance Minister Joe Oliver walk to the House of Commons to deliver the federal budget on Parliament Hill in Ottawa April 21, 2015. REUTERS/Patrick Doyle

The tax breaks in the budget the Conservative government delivered on Tuesday, plus the cold hard cash it will give to every family with children starting in July, put pressure on Harper’s main opponent, Liberal leader Justin Trudeau, to spell out an economic agenda with just as much vote-getting appeal.

It may be a tough task.

Trudeau, the 43-year-old son of former Prime Minister Pierre Trudeau, has long been the front-runner to replace Harper but the Liberals are slipping in the polls as the Conservatives claim he will hurt the economy by raising taxes.

Analysts said the budget was a purely political document and indeed, within hours of it being delivered, the Conservatives sent out a fund-raising appeal to supporters with the “bad news” that Trudeau is opposing the government’s plans.

The budget had plenty to attract seniors, who tend to vote more than other segments of the population and also tend to vote Conservative. Ottawa will relax rules forcing the elderly to withdraw retirement savings at a certain rate and will double the amount people can put into tax-free savings accounts.

“If you look at the strategy of the government and the people that it’s targeting for support, it’s got some very good targeting in it,” said Andrew Graham, professor at the school of policy studies at Queen’s University.

“Is it going to help this government? I think it will.”

A six-year package of family tax cuts and benefits, unveiled last October, ensures voters will get their first checks before the October election.

Trudeau says he will not touch the package’s child benefits but vows to reverse an income-splitting measure he insists will only benefit the richest Canadians. That could also be a challenge.

“It’s hard to sell reversing a tax cut in terms of an election campaign,” said McGill University political scientist Antonia Maioni.

Trudeau, mindful of a powerful Conservative attack machine that chewed up his two predecessors as Liberal Party leader, said on Wednesday he will provide more details on his economic plan in the weeks and months ahead, but brushed off the suggestion that he should move more quickly.

“I have been very clear from the very beginning that the Liberal Party is putting together a responsible plan that we will share with Canadians at an appropriate time,” Trudeau told reporters.

Ipsos Reid pollster John Wright said Trudeau might not have anywhere near that much time.

“People are now going to turn within the next 24 hours and start saying, ‘OK, so what do you think, what are you going to do?'” he said.

Richard Johnston, professor of political science at the University of British Columbia, said the Conservatives have made so many spending promises that opposition parties will have trouble funding their plans without raising taxes.

“The fact that the Liberals struggle to come up with a credible platform that distinguishes them from the Conservatives is a problem for them,” he said.

“The pressure is on (Trudeau). It doesn’t mean he has to do everything tomorrow, but he does want to mix it up in the budget debate.”

Writing by David Ljunggren; Editing by Peter Galloway

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