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Harper pledges to double tax-free savings limits - but not till deficit is beat

Conservative Leader Stephen Harper plays cribbage with Susan Collins during a campaign stop at a cultural centre in Toronto.

Chris Wattie/Reuters

Stephen Harper is promising to double the contribution room in Tax-Free Savings Accounts during his second straight day of campaigning in the Greater Toronto Area, a crucial battleground he hopes will help land him a majority government.

If re-elected, he said, a Conservative government would expand annual contribution limits for the savings vehicles to $10,000 from $5,000.

The catch is the Tories would only enact this measure after Ottawa conquers the deficit. The annual budget shortfall is projected to be $29.6-billion this fiscal year and it could be three or four years before the books are balanced.

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The Conservative Leader visited the breakthrough riding of Vaughan Thursday morning, one the Tories narrowly won in a by-election 18 weeks ago.

Stealing a long-held Liberal seat in the region gave Mr. Harper another toehold in the GTA.

Julian Fantino, an ex-Toronto police chief and former Ontario Provincial Police commissioner, took the seat last November by about 960 votes.

The Tax-Free Savings Account, announced in the 2008 budget, provides Canadians a means of earning tax-free investment income. Canadians can currently contribute an additional $5,000 to the account each year.

The Conservatives estimate that increasing the annual TFSA limit to $10,000 from $5,000 will cost $30-million in foregone revenue in the first year. Within five years, they predict, the hit to the treasury would be $300-million.

"Doubling the annual contribution limit will help families save to purchase a car, renovate their home, start a small business or retire with greater financial security and stability," Mr. Harper said.

Since 2009, about 4.7 million Canadians have opened TFSAs, which have a combined market value of $18-billion right now. Money withdrawn from the savings vehicles is not taxable and unused contribution room can be carried forward.

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Liberal Leader Michael Ignatieff criticized the Tories for making promises before the budget is balanced.

"It was very amusing. Mr. Harper did this thing again, he's now done three times: 'I've got a great deal for you, take a number, come back in five years. It will be fabulous,' " Mr. Ignatieff said. "Tax-free savings accounts in five years, when rainwater is beer? When pigs fly?"

Mr. Harper spent early Thursday morning in Vaughan with Mr. Fantino, whom the Conservatives installed in cabinet shortly after the by-election win to raise the rookie MP's profile.

The Tory campaign received a boost of sorts last week when Mr. Fantino's Liberal rival from the 2010 by-election endorsed the Conservative as the best choice for the 2011 ballot. Tony Genco lauded Mr. Fantino's ability to deliver the goods for Vaughan, specifically $10-million from Ottawa for a new health-care facility.

The Conservatives believe they can hold Vaughan, named after the City of Vaughan, which lies about 20 kilometres north of Toronto's downtown. The current Liberal candidate vying to take back the seat is Mario Ferri, a former Vaughan city councillor.

Mr. Harper is currently on this third swing through the Toronto area as he blitzes key battleground ridings this week before his leader's tour throttles down to prepare for the April 12 and April 14 TV debates with Liberal, NDP and Bloc Québécois rivals.

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The Conservatives had 143 seats in the Commons when they were defeated March 25 by their political rivals. Plus, two seats vacant at the time Parliament was dissolved are traditionally strong Tory seats that the party is likely to win again. The Conservatives need to win 155 seats if they want to form at least the slimmest of majority governments.

The so-called 905 belt around Toronto is ripe with opportunity because it's home to about 10 seats that the Liberal incumbents won with 45 per cent of the vote or less in the 2008 election.

Later on Thursday, Mr. Harper heads to Hamilton for a 6 p.m. ET rally with candidates from the Hamilton-area and other nearby ridings. The Tories hold two of the Hamilton-area seats and the NDP three.

The Hamilton-Niagara region normally sees very competitive election races between the Conservatives, Liberals and NDP in many of the seats.

With a report from Jane Taber

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