January 25, 2009 / 6:51 PM / 9 years ago

Canada needs middle-class tax cuts: Finley

TORONTO (Reuters) - Canada needs broad-based tax cuts targeted at the middle class to stimulate the economy, a government minister said on Sunday, defending a feature expected to be in the budget the Conservative government will unveil on Tuesday.

<p>Minister Diane Finley waits to testify before the Commons finance committee on Parliament Hill in Ottawa April 28, 2008. REUTERS/Chris Wattie</p>

“The middle class is the single biggest group that drives our country,” Minister of Human Resources Diane Finley said in an interview on CTV’s “Question Period.” “We have to make sure they continue spending to keep the economy moving.”

The budget to be unveiled this week will usher in the country’s first fiscal deficit in a decade. A government official leaked to reporters on Thursday that deficits over the next two fiscal years would total C$64 billion.

Prime Minister Stephen Harper signaled on Saturday for the first time that the budget will contain permanent tax cuts, not just short-term reductions to lift the sagging economy.

Most of the stimulus measures in the package for the 12 months beginning April 1 are expected to be short term, such as infrastructure projects. Tax cuts for consumers and businesses are also expected to be in the mix.

Finley said on Sunday she expects to see the budget earmark C$1.5 billion for training workers eligible for employment insurance benefits, as well as funds to train the self-employed, homemakers and others who are ineligible.

The minister refused to be drawn on whether the budget would contain provisions to extend or increase benefits.

Finley said in the Sunday editions of the Toronto Star newspaper that the government is expected to invest some C$2 billion into social housing across Canada, including programs to help aboriginal people, the elderly and the handicapped.

Editing by Maureen Bavdek

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