Tuesday, April 08, 2014


The issue of income-splitting is a divisive issue for the Harper Government. It may have caused former Finance Minister Jim Flaherty to resign when he publicly crossed the line and Prime Minister Stephen Harper over the issue.

The Harper Government promised in the 2011 election to introduce income-splitting as a means of assisting families. Jim Flaherty believes the policy divides conservative MP's and he understands it will benefit mostly the rich and do little to assist low-income and middle-income families. Further, he understands it will come at a great expense to the Harper Government.

Flaherty was only a year away from introducing the Harper Governments' first balanced budget and understood income-splitting would take the Harper Government right back into debt with more deficit budgets.

According to the C.D. Howe Institute, 85 percent of Canadian households would gain nothing from the measure. Benefits for the remaining 15 percent of Canadian families are more likely to go to the more wealthy single-income households.

It is likely the Harper Government will partly backslide on their election promise as it is more costly now than when they made the promise. The Harper Government's income-spitting promise is projected to cost 2.7 billion and benefit mostly wealthy family households. It was only to come into effect when the government was able to balance their budget and that is expected to come in 2015 just before the next federal election.

The federal liberals are targeting the middle-class and may come up with a more effective policy that trumps the Harper Government's promise and provides benefits to more voters who are not considered the rich. The great divide between the rich and not so rich is a challenge to all political parties as the next federal election nears.

Whatever the Harper Government promises will be on borrowed money as Prime Minister Harper now reigns over the worst national debt in Canadian history. It is evident he has not managed our economy, but has indebted future generations for decades to come. It seems Prime Minister Stephen Harper has done a good job of driving young voters to Justin Trudeau and the liberals.

Who wins the middle-income voters may well win the next election.