TORONTO - The minority Conservative government has squandered Ottawa's multibillion-dollar surplus because of an obsession with cutting taxes while ignoring issues such as poverty and climate change, according to a left-leaning think tank.
In its alternative budget to be released Monday, the Canadian Centre for Policy Alternatives criticizes Prime Minister Stephen Harper's government for plans to give away $190 billion in tax cuts.
"Canadians are working harder but they are struggling to afford the basics: housing, child care, post-secondary education," the 114-page document states.
"There has been nothing in the previous two Conservative budgets to address these issues."
Depriving the federal government of revenue which could be plowed into social services or environmental protections is especially irresponsible in light of a possible U.S.-led downturn many economists are fretting about, the centre argues.
Amid growing election speculation in Ottawa, Finance Minister Jim Flaherty tables his third budget on Tuesday. He has hinted at new spending on environmental projects and the low income tax benefit, along with tax writeoffs for the ailing manufacturing and forestry sectors.
Both Flaherty and Harper have downplayed the possibility of major new tax cuts in the budget, although in the fall economic update, the government said Canadians would save $60 billion in taxes over five years as a result of fiscal changes.
"Taxes haven't been this low since Lester Pearson was prime minister," Flaherty said in October. "This is an achievement we can all be proud of."
The government's rationale is that lower taxes bolster investment confidence.
The alternative budget argues instead that tax cuts "fail to deliver on what Canadians really want," and mostly benefit the already wealthy.
The cuts have eroded tax fairness and contributed to growing economic inequality, the centre says.
Among measures the alternative budget advocates:
-Raise the GST back to six per cent;
-Raise the tax rate for incomes over $250,000 to 31.5 per cent from the current 29 per cent;
-Maintain corporate income tax base rate at 21 per cent along with current surtax of 1.12 per cent.
-Freeze maximum RRSP contribution rates at $19,000 a year;
-Implement a carbon tax.
The alternative budget calls for increased social spending to tackle poverty, homelessness and student debt.
Among measures, it suggests an increase in the child tax benefit to $5,000 and an end to the current hodge-podge of student loans and assistance in favour of a national system of needs-based grants.
The alternative federal budget, co-ordinated by the centre for policy alternatives, is a collaborative effort involving a range of social and other organizations.
