Finance Minister Joe Oliver is under fire from opposition leaders over his claim that any future problems created by the Conservative government's new tax cuts can be addressed by Prime Minister Stephen Harper's granddaughter.
Mr. Oliver was asked Tuesday during an interview with the CBC to respond to concerns that doubling the annual contribution limits to tax free savings accounts will, over time, leave the government with a shortfall in federal tax revenue.
"I heard that by 2080 we may have a problem. Well, why don't we leave that to Prime Minister Stephen Harper's granddaughter to solve that problem," the Finance Minister replied. "If you have to go to 2080 to say there's a problem with the program, I think we've got a pretty good program. We're not preventing future governments from dealing with issues 10, 20, 30, 65 years down the road. We're trying to provide prosperity [for] Canadians now and for future generations and that's just what these measures will do."
NDP Leader Thomas Mulcair and Liberal Leader Justin Trudeau both criticized the minister's comments in Question Period on Wednesday, accusing the government of sacrificing future generations for short-term political gain.
"Incredibly the Finance Minister said yesterday that his TFSA increase for the rich would be paid for by the next generation of Canadians," Mr. Trudeau said. "Since when does Canada burden our grandchildren instead of building for them?"
Mr. Harper rejected the questions.
"The Minister of Finance was clearly dismissing a preposterous argument," he replied. "Because balancing the budget is good for future generations. Cutting taxes and allowing people to save, keep money in their own pocket, is good for future generations. Giving money to Canadian families so they can raise their children is good for future generations."
Mr. Oliver's comments appear to be in response to a pair of reports released in February that warned that doubling of TFSA contribution limits would hurt federal revenues over time.
The 2015 budget increased the maximum annual contribution limit to $10,000 from $5,500.
The Parliamentary Budget Officer said in February that raising the limit to $11,000 would cost Ottawa $14.7-billion a year in lost revenue by 2060 and would also reduce provincial revenues by $7.6-billion in that year.
A separate report on the topic by Simon Fraser University Professor Rhys Kesselman reached a similar conclusion.
"Like a little baby who looks cuddly and cute, this proposed initiative would grow up to be the hulking teenager who eats everyone out of house and home," Dr. Kesselman stated in a report for the SFU School of Public Policy.
BMO chief economist Doug Porter rejected such conclusions as "poppycock" in a recent research note.
"Do we want to encourage savings or not?" he wrote. "On the cost side – why does no one mention the fact that savers have been handed an extremely raw deal in the past six years from ultra-low interest rates? And when the bevy of studies talks about the heavy cost of the TFSA program, why do none point to the massive interest savings governments have reaped (at the hand of savers) from years of negative real interest rates? Perhaps Ottawa has decided to raise the TFSA limit in part as a sheepish admission that it may just be a tad unfair to tax interest earnings that are already well below inflation."