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Prime Minister Stephen Harper listens to a question while meeting with reporters after his speech to the Board of Trade in Montreal Thursday, April 20, 2006. (CP / Ryan Remiorz)

Harper to present measures on fiscal imbalance

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Date: Thu. Apr. 20 2006 11:35 PM ET

MONTREAL — Prime Minister Stephen Harper says he will introduce measures within a year to address the fiscal imbalance between Ottawa and cash-strapped provinces.

"We will present specific proposals on the fiscal imbalance, and let me tell you what they won't include: a hike in federal spending in areas of exclusive provincial jurisdiction," he said in a speech Thursday to the Montreal Board of Trade.

"Your new national government will respect the Canadian Constitution. No proposal will be presented to the federal cabinet if it doesn't respect the division of powers between the federal government and the provinces."

The provinces have long argued they give Ottawa billions of dollars more than they receive from the federal government.

Harper said his Conservative government will cut personal, business and capital gains taxes during its mandate, along with the goods and services tax.

"Probably the most important fiscal imbalance in this country is between all levels of government and the citizens of this country who are overtaxed."

He said the federal government took in about $100 billion in unexpected surpluses over the last 10 years and wasted much of that money.

"In the hands of Canadians, that money would have allowed parents to buy clothes or school supplies for their children. Owners of small- or medium-sized businesses would have been able to invest more in their operations and create jobs.

"Provinces would have been able to breathe more easily by having money that could have helped the elderly or students.

"In a nutshell, that money could have been used to help all Canadians."

Harper also said he wants Quebec to become stronger within a better Canada and that having the province play a role at UNESCO does not pose a danger to Canada.

The Conservatives made a major breakthrough in Quebec in the January election, winning 10 of the province's 75 seats, and are keen to build on that ahead of the next vote.

Harper's speech was part of a cross-country tour in which he is addressing his government's five priorities.

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No easy answer to this mess! The goverments of many nations have been over borrowing for years. People have not been much better. The old rule of you cannot spent more then you make applies to both. This whole thing is going to be a long, painful and bumpy ride. Unfortunately, no one will learn their lesson when this is over and we will be in the same perdicament 50 years from now. Most of the lessons from the Great Depression were not learned.

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