Skip to main content
editorial

Prime Minister Stephen Harper and his wife Laureen do arts and crafts with students at the Joseph and Wolf Lebovic Jewish Community Campus in Vaughan, Ont., on Thursday, October 30, 2014. THE CANADIAN PRESS/Nathan DenetteNathan Denette/The Canadian Press

Prime Minister Stephen Harper and Joe Oliver, the Minister of Finance, announced on Thursday a modified version of an earlier proposal on "income-splitting" for married couples with children (no older than 18). The change probably reflects the misgivings that the previous finance minister, Jim Flaherty, expressed not long before he died.

There is a legitimate argument that the taxation system is biased against households in which one spouse does not work and gives correspondingly greater attention to their children, while the other spouse is propelled into a high tax bracket. Indeed, the Conservatives promised to end this predicament before they came to power.

The question, however, is whether this benefit will be proportionate to the loss to the public purse – and whether it will be popular with Canadians. When the government made its income-splitting promise in 2011, the cost was estimated to be at least $2.5-billion a year. One-parent families would get no benefit. Childless families would get no benefit. Ditto two-parent families with both spouses earning roughly the same amount of money. To benefit the most, a family would have need to have one parent who earned a lot of money, and another who earned little.

In 2011, the C.D. Howe Institute estimated that 85 per cent of all households would not benefit at all from the Conservative pledge to allow income-splitting. On Thusday, Mr. Harper introduced income-splitting – but responded to critics by capping the maximum possible benefit at $2,000.

All of this is only one part of what Mr. Harper called "a suite of measures" introduced or expanded on this week. The upshot is a further addition to this government's long-standing habit of creating a whole motley crew of small tax benefits.

Justin Trudeau and the Liberals have committed themselves to repeal the income-splitting measure. More cautiously, Thomas Mulcair, the NDP Leader, has said Mr. Harper's plan is a step in the wrong direction, though he hasn't quite promised to roll it back. He has instead proposed an ambitious national daycare plan.

All of which leaves Canadians with a choice to make. Do you support a tax cut whose bull's eye, even after a bit of watering down, is still the two-parent, single-income family? Start thinking about it; the next election is 12 months away.