Fire up your banjos because the Consevatives appear to be saying - you want a tax cut, we'll give you a tax cut.
Sources told (er, leaked) to John Ivison of the National Post
that
The Conservative party's election platform could include a pledge to cut the Goods and Services Tax, as a counter to the $30-billion is tax relief promised by the Martin government in Monday's mini-budget...
...The Conservative plan to reduce the rate to 5%, which would likely be phased in with two one-point cuts, would see revenue reduced by around $8.5-billion a year when fully implemented.
...The Conservatives are likely to commit to keeping Mr. Goodale's timetable but believe there is still enough room to make further cuts. Private-sector projections suggest Canada will rack up surpluses totaling $54.5 billion over the next six years, even after the government puts away $4-billion a year in contingency and "prudence" measures.
Here is how I think it will add up. It will take a while to get this type of measure passed, so for the sake of argument we will say that the cut won't occur until 2007.
2007: $4.2B
2008 - 2001: $34B
Total Projected Surplus: $54.5B
Remaining Surplus after GST cut: $16.2
So there is more than enough room in our fiscal framework to allow such a cut in the GST. This is one big advantage of positioning the Liberals to change their fiscal statement into a budget - their projections are on the record and as long as the Conservatives can stay under those projections they can't be painted as reckless.
