GST cut will benefit Canadians with modest incomes

January 12, 2006

No credible third party accepts Liberal claim that GST cuts benefit the rich

HALIFAX – Conservative Leader Stephen Harper today explained that his plan to cut the GST from 7 to 6 to 5 per cent will be of particular benefit to Canadians of low and modest incomes.

He bolstered his position on the GST by citing a series of independent authorities not traditionally associated with the Conservative Party. On the other hand, the Liberals have failed to provide any third-party authority for their claims about the GST.

“Any economist will tell you that Canadians of modest incomes spend a greater proportion of what they earn,” Harper said. “That’s why consumption taxes, like the GST, are called regressive taxes. They hit hardest at people with the least flexibility about how to use their incomes.”

Harper made these remarks after meeting with a local family to discuss the difficult decisions that parents must face to make ends meet. These decisions are not made easier by the GST.[1]

“Spending on necessities for your children is not a matter of choice,” Harper said. “A low- or modest-income family does not have much flexibility about how much of its income gets spent. That is why it is so important to cut the GST.”

Several independent parties have confirmed that the GST’s regressive impact falls disproportionately on low-income Canadians. This includes the Canadian Centre for Policy Alternatives – B.C. Office; the Canadian Council on Social Development; Jim Stanford, a Canadian Auto Workers economist; the Ontario Public Health Association; the federal NDP; and former Liberal advisor Tom Kent.[2] No credible source outside the Liberal Party takes the position that the GST is a greater burden on the rich than on the poor.

“The GST is the only tax that all Canadians pay. Our plan would deliver a tax cut to everyone, including the 32 per cent of Canadians who do not pay federal income tax,” Harper said. “Our tax cut plan would deliver a greater benefit to Canadians than the promises of any other party.

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For further information: Conservative Party Press Office (613) 755-2191

[1] The GST is charged on children’s clothing, books, diapers, and other infant necessities. The GST does not apply to purchases such as basic groceries and prescription drugs.

[2] These authorities have not endorsed the Conservative Party and they have not endorsed our tax plan. Many do not even support our party. They are cited merely as independent confirmation of the GST’s regressive impact on low-income Canadians and/or the benefit to low-income Canadians of cutting the GST. On the other hand, the Liberals cannot provide independent support for their claim that a GST cut disproportionately benefits the rich.