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Trudeau Pledges Not To Raise Taxes To Slay Soaring Federal Deficit

The fall economic statement does include several revenue-raising tax measures.
Prime Minister Justin Trudeau speaks at the Dominion Arboretum in Ottawa on Dec. 11, 2020.
Justin Tang/CP
Prime Minister Justin Trudeau speaks at the Dominion Arboretum in Ottawa on Dec. 11, 2020.

OTTAWA — Prime Minister Justin Trudeau pledged Monday not to raise taxes on Canadians, despite the fact his government’s fall economic statement proposes to do just that.

Speaking to Radio-Canada’s Céline Galipeau on Monday, Trudeau told the anchor that Canadians won’t need to worry about the federal government’s raising taxes to pay for its $381-billion deficit — at least not for now.

“As soon as we start seeing economic growth, we won’t need to worry about that,” Trudeau said in French during an interview that aired on “Le Téléjournal”.

“Do you pledge that there won’t be any income or tax hikes on Canadians?” Galipeau pressed.

Watch: Trudeau unveils $15B climate plan

“It’s certain,” Trudeau responded. “We will not impose more on Canadians. We know that we must restart the economy. It’s not time to take away from people; it’s time to still offer opportunities for people to go through this [crisis] and rebuild the economy stronger for the years to come.”

The Liberal government’s Fall Economic Statement, tabled in the House of Commons on Nov. 30, contains several revenue-raising tax measures. There is a proposal to cap at $200,000 the annual limit on some employees’ stock option grants that can qualify for a preferential tax rate. That measure is expected to raise government revenue annually by $200 million.

There is also a plan to force foreign-based companies selling digital services to collect and remit GST/HST on their products, as well as compel Canadian owners of short-term rental properties, such as those listed on Airbnb, to register and apply the GST/HST on their listings. Together those measures are expected to bring more than $1.5 billion into government coffers over five years.

During Trudeau’s wide-ranging interview, the prime minister pledged to continue to do everything the government can to help Canadians through the crisis, for as long as it takes. He also suggested his government could have done better but said the world wasn’t prepared for this pandemic.

He spoke of lessons learned, such as having a warehouse of personal protective equipment that is “adequate,” and clearer rules so that people know what to do during an epidemic.

In the spring, the Liberals were criticized for destroying two million N-95 respirator masks and 400,000 pairs of medical gloves after they had expired in 2014. At the time, Trudeau said the government would ensure that items in the national emergency stockpile get distributed and used before they expire.

Chief Public Health Officer Dr. Theresa Tam also came under fire for waiting more than two months after the COVID-19 was declared a pandemic before recommending the use of non-medical masks to help stop the spread of infection. Tam later said her position on masks changed because of the evolving science around the novel coronavirus.

The prime minister sidestepped questions about dealing with U.S. President Donald Trump and whether he would support extending Quebec’s language laws to federally governed institutions in Quebec. He said he believes the federal government was “firm enough with China” and that its priority is bringing back Michael Spavor and Michael Kovrig. The two Canadians have been detained in China for the past two years.

Spring election? ‘We’ll see’

Trudeau repeated that he is ready to give the provinces more money for health care transfers but he wants to wait until after the pandemic so the government can better figure out what the recurring “proper funding” should be in the years to come.

“We don’t know that already, a little, at least, what the provinces need now?” Galipeau asked.

“Well, yes, but right now, we do send money to help them,” he said.

When asked if Canadians should expect a spring election, Trudeau said: “We’ll see.”

The prime minister said he hopes to “make Parliament work with all the different parties.”

His priority remains the pandemic and, for the coming months, vaccines, he said.

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