Tories raise stakes in dispute over RESPs

This is from the Star. Here is another chance for the Liberals to bring down the government but of course it won't happen. Even if Dion wanted to do it his handlers Rae and Ignatieff would not allow it.

Tories raise stakes in dispute over RESPs
TheStar.com - Canada - Tories raise stakes in dispute over RESPs

Flaherty challenges opposition to fight election over plan he says would cost $900 million

March 11, 2008
Bruce Campion-Smith
Ottawa Bureau Chief

OTTAWA–If Liberals are committed to the idea of making education savings tax deductible, they'll have to fight an election to save it.

That was the word yesterday from Finance Minister Jim Flaherty, as he denounced the costly scheme and said he would introduce an amendment to repeal the idea and make it a confidence issue for the minority Parliament.

"It imperils the fiscal plan of the government. It runs the risk of putting the balanced budget of our government into a Liberal deficit. We are not going to run a deficit, so we're going to kill the bill," Flaherty told reporters yesterday.

A private member's bill endorsed by the Commons last week would allow parents a $5,000-a-year tax-deductible contribution to a registered education savings plan for each child. But the Conservatives want to torpedo the motion, arguing the measure is unaffordable.

Their original strategy was to appeal to the Senate to dismiss the bill, first proposed by Liberal MP Dan McTeague. But yesterday, Flaherty said the government would simply add an amendment to budget legislation, expected this week, to kill the RESP motion.

The Conservatives have said the plan would cost the government at least $900 million in lost tax revenue, plus another $450 million in lost revenue for the provinces.

"The figures could well be higher and we're not taking that risk," Flaherty said.

While initial reports of the program have proven popular with parents, Flaherty said it's not "within our fiscal framework," rejecting any hint of a compromise.



McTeague yesterday defended his bill as an essential incentive to encourage students and their families to save for the rising costs of post-secondary education.

"At the time when Canada sees, Canadians see an opportunity to help their young people getting access to higher education to meet the knowledge-based economy, he wants to find a trick to bring it down," he told reporters.

"If Mr. Flaherty wants to go to an election or if he wants to beat his chest by beating up on ordinary families, good luck," McTeague said. "I personally would have no problems campaigning on this particular issue."

Liberal Leader Stéphane Dion said the RESP plan could be part of the party's election platform.

"Maybe not exactly as it is ... but certainly savings are at a record low in Canada, our citizens are in debt so there is a social problem that is affecting our competitiveness in the world if we are not able to help more students to focus on their studies," he said.

But Dion showed little enthusiasm for sparking an election to save McTeague's motion.