Flaherty introduces motion to block Liberals' RESP bill
Liberals say they won't force election
Federal Finance Minister Jim Flaherty on Tuesday brought forward a motion to nullify a Liberal bill that creates new tax breaks for Registered Education Savings Plans.
Including the motion as part of the budget implementation process makes it a confidence vote, meaning the minority government could fall if the opposition parties vote against it.
And even though some Liberals said they were ready to fight an election on the issue, Canadians won't get that chance — at least not now.
Liberals said Tuesday they will not trigger an election on the matter. "We won't be going to the polls on this," said Liberal finance critic John McCallum.
The Liberal-sponsored bill would allow parents to contribute up to $5,000 a year for each child to an RESP and deduct the amount from their income taxes. Opposition parties passed the private member's bill last week and it is now before the Senate.
But on Tuesday, Flaherty tabled a ways and means motion to implement his recent federal budget that includes language that would effectively cancel the tax deduction for the education plans.
The motion proposes several conditional amendments. If the Liberal bill receives Royal Assent, the government motion would repeal or replace sections of the Income Tax Act that the Liberal bill would have changed — sections that would have allowed for the deductibility of RESP contributions.
Flaherty said the private member's bill, Bill C-253, introduced by Liberal MP Dan McTeague and passed last week, could send the federal government back into the red.
"Budget 2008 is a plan that is prudent, focused and responsible in this period of economic uncertainty," said Flaherty in a release.
"Now, having received approval of the House of Commons for the budget framework, we are presented with a private member's bill that risks plunging the federal government back into deficit. Our government told Canadians we would maintain a balanced budget and we intend to keep our word."
Finance officials estimated the measure would cost the federal treasury about $900 million, although supporters of the Liberal bill say the figure is closer to $700 million.
McTeague said Flaherty's method of attempting to negate his bill is out of order. The Speaker of the House of Commons is expected to rule Wednesday on whether Flaherty's motion violates Parliament's rule book.