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Linking ‘tax fairness’ to family stability, Kenney comes out in support of income splitting

Jason Kenney responds to a question in the House of Commons on Feb. 12, 2014.

SEAN KILPATRICK/THE CANADIAN PRESS

Jason Kenney, one of the Conservative government's most senior ministers, has launched a full-throated defence of the Tory Party's controversial income-splitting campaign pledge, linking a policy that would ease taxes on households with stay-at-home spouses with the notion of a "stable family."

The measure has come under fire from critics who argue the Tories should not follow through on a 2011 campaign pledge – contingent on a balanced budget – to allow parents with kids under 18 to share income for tax reporting. Even Finance Minister Jim Flaherty has voiced public misgivings about the fairness of a policy that would deliver lucrative tax breaks to 1.8-million households.

But Mr. Kenney, a champion of the pledge and a social-conservative standard bearer in the Tories, told the Manning Conference – a gathering of conservative-minded Canadians – that he fully supports the promise. He said it's unfair to penalize families where one spouse stays at home or gives up career opportunities to take care of the kids.

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"I was delighted we made a commitment to Canadians in the 2011 election platform to deliver tax fairness for families through the family tax cut that would eliminate a long-standing and unfair discrimination against certain families in the tax code."

Mr. Kenney, who had been speaking about employment and skills training, then went on to praise the virtues of stable families.

"When we talk about all of these labour issues, we need to recognize that according to the data, the single most important factor that leads to successful employment and economic opportunities for people is whether they come from a stable family."

The minister didn't explain the connection between the income-splitting pledge and stable families, but he talked about spouses who make the choice to stay at home and provide child care for their kids.

"And we need to support moms and dads who make sacrifices for their kids," Mr. Kenney said.

"As Stephen Harper always says, the best child care experts are Mom and Dad."

The inequity that the minister is targeting in Canada's tax system is, for instance, how a two-parent family with one income earner who makes $90,000 gets taxed at a higher rate than another two-parent family where both spouses work and make $45,000 each.

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In some other countries, spouses have opportunities to pool their income for tax reporting purposes and thus pay a lower effective rate of tax.

The Conservatives in the 2011 election promised that once the budget was balanced they'd allow parents with kids under 18 to share up to $50,000 worth of income for tax purposes, reducing their overall tax bill payable to the Canada Revenue Agency.

The pledge is estimated to cost $2.7 billion and the Tories at the time estimated it would help just 1.8 million families, conferring tax relief worth an average of $1,300.

The C.D. Howe Institute has criticized the policy and said 85 per cent of households would derive no benefit from it.

More to come

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About the Author
Parliamentary reporter

Steven Chase has covered federal politics in Ottawa for The Globe since mid-2001, arriving there a few months before 9/11. He previously worked in the paper's Vancouver and Calgary bureaus. Prior to that, he reported on Alberta politics for the Calgary Herald and the Calgary Sun, and on national issues for Alberta Report. More

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