December 12, 2007 / 12:20 AM / in 10 years

Flaherty assails opposition tax-cut delay

OTTAWA (Reuters) - Canadian Finance Minister Jim Flaherty said on Tuesday he was concerned that delays by an opposition party could jeopardize the timing of the consumption tax cut that was to go into effect on January 1.

<p>Finance Minister Jim Flaherty stands to speak in the House of Commons on Parliament Hill in Ottawa November 21, 2007. Flaherty said on Tuesday he was concerned that delays by opposition parties could jeopardize the timing of a sales tax cut that was to go into effect on January 1. REUTERS/Chris Wattie</p>

Flaherty said retailers have been calling him asking whether they should be administering the change at their cash registers as of the proposed date.

“What I said yesterday is that the bill was moving ahead and was likely to get through the House and the Senate before Christmas,” Flaherty told reporters in Ottawa.

However, he blamed the left-leaning New Democratic party for delaying the bill.

“That does put into jeopardy the tax cut,” he said, adding that he was still hopeful it would pass before Parliament adjourns this week.

Normally, proposed tax changes can be implemented without having to wait for final legislative approval, but Flaherty said the Canada Revenue Agency had pointed to some “challenges” related to the goods and services tax (GST) cut that could make implementation more difficult without a law in place.

The NDP opposes the corporate tax cuts opposed in the same bill as the GST cut. Although it cannot single-handedly defeat the bill, NDP finance critic Thomas Mulcair said the party aims to delay a vote in the hopes that the larger Liberal Party will feel more emboldened in the new year to vote against it.

“Our biggest opposition right now is not with the GST (goods and services tax) cut, our biggest opposition right now is with the tax cuts to the petroleum sector and to the banks and we’re going to do everything we can do block it,” Mulcair told Reuters. “It’s all in the same bill.”

A defeat of the bill could bring down the minority Conservative government and force an election.

The largest opposition party, the Liberals, have said they have no immediate plans to try to bring down the government but leader Stephane Dion said earlier this month there could be an election in 2008.

The Liberals have been abstaining in votes on the bill as it moves through the various legislative stages, effectively letting it pass.

Reporting by Louise Egan; Editing by Peter Galloway

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