OTTAWA -- Prime Minister Stephen Harper promised a tax break to some Canadian families Monday.
But he can't do it until the deficit is gone, which at the moment isn't expected to happen for another five years.
It was the first real sign that something other than mud-slinging will at least make an appearance in the 2011 federal election, after the first weekend was dominated with Conservative accusations the Liberals will ignore a Conservative victory and seize power in a coalition with the NDP and Bloc Québécois.
Harper referenced the coalition 21 times in his morning speech Sunday in suburban Toronto and at least 18 in an evening speech in Burnaby, B.C. But Monday morning, in a campaign stop at the home of a Victoria-area family, coalition talk was sidelined for the most part in favour of a $2.5-billion tax cut for couples who have children.
Harper promised that families with kids will be able to share up to $50,000 in income to help reduce income taxes. It is targeted at families with a stay-at-home parent or those who have large discrepancies in their incomes.
Single people, including single parents, and couples without children under 18 would not benefit at all. Neither would families or couples in which both earners bring in similar amounts.
Harper said his party understands household budgets are tight and he wants to do what he can to help.
That includes making the tax system more fair to families and stop treating them like roommates.
"As it stands, the tax system doesn't recognize that many, even most families, pool their income to pay their household bills," Harper said. "That is not realistic. That is not fair."
He said, for example, a couple in which one earner brings in $60,000 and the other $20,000 would pay more tax than a couple in which both earn $40,000. That's because the lowest tax bracket in 2011 means individual income up to $41,544 is taxed at 15 per cent, while individual income between $41,544 and $83,088 is taxed at 22 per cent. So the two earning $40,000 would pay no tax at the higher rate, but the single-earner family would.
Harper estimates the plan will help 1.8 million Canadians save an average of $1,300 a year. Families with single incomes over $127,000 could save up to $6,000 a year.
He can't afford it until the budget is balanced because continuing the economic recovery and eliminating the deficit are his chief priorities, said Harper.
The recent Conservative budget doesn't forecast a budget in the black until 2015-16.
Liberal Leader Michael Ignatieff, campaigning in Toronto Monday, dismissed Harper's family tax cut promise as another sign the Conservatives put big business before real people.
Corporations are getting big tax cuts now, Ignatieff said, while Harper is telling families to "take a number and come back in five years and we'll see what we can do for you."
Ignatieff was in Toronto Monday where he attacked the Conservative record of fiscal management and its priorities. He said the Conservatives want to spend billions on fancy fighter jets and new prison cells and won't have anything left for health care.
Ottawa is just beginning negotiations with the provinces to renew the federal health and social transfer. Provincial governments have seen health-care costs eat up bigger and bigger portions of their budgets and will be looking to Ottawa to help when the current accord expires in 2014. Ignatieff said with the Conservatives at the helm, the provinces will be out of luck.
"If you spend the money on jets and jails and corporate tax cuts and you face the renewal of that health accord in 2014, there isn't going to be enough there to save health care," Ignatieff said.
Ignatieff is expected to make his first major policy announcement today. He said his entire platform, including costs, will be released by the end of the week.
The third day of the campaign was marked by a sudden reduction in coalition talk. A Leger Marketing poll released Monday found while few Canadians (17 per cent) believe Ignatieff wouldn't try to form a coalition, the poll also found it is not a top-of-mind issue for voters. A quarter of those polled dismissed the coalition as Conservative fear-mongering, but nearly half of voters think a coalition is a realistic possibility.
NDP Leader Jack Layton campaigned in Saskatchewan Monday where he talked up NDP policy to abolish the Senate. Layton also continued to push his mantra that the NDP are best positioned to beat incumbent Conservatives. He said Harper's tax cut was too little too late, and said NDP plans to eliminate the federal sales tax on home heating would help families more and faster.
Frances Woolley, an economist at Carleton University, said the biggest beneficiaries of the Conservative policy would be higher-earning, single-income households with a stay-at-home spouse.
"This is a socially conservative move, not a fiscally conservative move," Woolley said.
-- with files from The Canadian Press