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Fiscal update to include middle-class tax relief

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Canadian Press

Date: Thu. Nov. 10 2005 11:29 PM ET

OTTAWA — Just how much fiscal leg a flirtatious Ralph Goodale shows us Monday may well depend on how seriously the federal Liberals take NDP Leader Jack Layton.

If the Liberal finance minister and the rest of his government expect to fall in the next few months, watch for a detailed plan setting out middle-class tax relief in Monday's fiscal and economic update, sources say.

That could include itemizing the cost and extent of tax cuts for middle-income earners and how a re-elected Liberal government would implement such a plan -- much more detail than the fall update of economic conditions normally contains, sources say.

With a likely surplus of between $10 billion and $12 billion in current fiscal year, Goodale can likely afford that as well as new spending measures on training programs aimed at boosting the nation's prosperity.

But if talk of a snap election dies down in the next few days, that leaves Goodale time to bring in a full budget early next year.

And that means Monday's report may not give quite the same detail about potential tax cuts but rather focus on the overall outlook for the economy, federal finances and the size of Ottawa's surplus.

"(The update) is not quite finalized ... everything hasn't been decided yet," Liberal sources said Wednesday.

Goodale, in his Regina riding this week, is still tinkering with the update and weighing whether it may yet need to be fleshed out as an economic platform for a federal election campaign if the minority Liberals fall.

The heat has been dramatically cranked up in Ottawa in recent days after Layton's NDP pulled their support from Prime Minister Paul Martin's minority Liberals and made clear they want to see a national election in February.

Martin has already promised to called a federal vote within 30 days of the final Gomery report on the sponsorship scandal, which is due Feb. 1.

That timetable would give Goodale time to bring down a full budget early next year before Canadians go to the polls in March.

But all three opposition parties don't want the Liberals to control the timing of an election.

Goodale has already promised that Monday's update will be meatier than usual, accompanied by a separate prosperity plan that will discuss new spending programs to improve skills training and education.

Anticipating that, the Finance Department has planned a full lockup Monday morning for the media to give journalists and opposition MPs time to absorb Goodale's update before it's released to the public later in the day -- a program usually reserved for full-blown budgets.

Improving productivity in the economy to boost the living standards of Canadians -- particularly as an aging population strains social programs -- has become hugely important to Goodale.

As part of his prosperity agenda, he'll likely also emphasize the Liberals' plan to reduce corporate taxes as originally promised in last February's budget.

He'll also talk about greater infrastructure spending.

All that will be presented in the context of a strong economy that shows little signs of slowing, says Dale Orr, managing director of Global Insight, an economic forecasting firm.

"Minister Goodale can be expected to emphasize Canada's recent economic growth, our fiscal and trade surpluses, our strong job growth and low and stable inflation. Most remarkably, the Canadian economy has now reached a three decade low unemployment rate," Orr said Wednesday.

Some Toronto-area MPs have been pressing for an even beefier update that gives solid details of tax reductions and new spending programs which they can they campaign on.

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