Conservatives aim to use Senate to scuttle RESP bill
Last Updated: Friday, March 7, 2008 | 4:01 PM ET
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The Conservative government wants the Senate to help it defeat a private member's bill that would make contributions to registered education savings plans tax deductible.
The bill, which was first put forward by Liberal MP Dan McTeague two years ago, passed the House of Commons on Wednesday night with a narrow margin of 34 votes.
Because the bill doesn't call on the government to spend money, it was ruled appropriate for private member's bill, but Conservatives say its fiscal implications are steep enough that it should be blocked.
If passed by the Senate, the government predicts the changes would reduce federal revenues by $900 million and provincial governments will lose $450 million.
The bill would allow parents to make $5,000 in annual tax-deductible contributions to RESPs. Currently, RESPs can grow tax-free but contributions to them are not tax deductible.
Opposing the bill could put the Conservatives in a difficult position, as they could be seen as fighting a popular tax break and relying on the Liberal-dominated Senate to scrap the bill.
"I'll be talking to the senators," said Ted Menzies, the parliamentary secretary to the minister of finance.
"There's a lot of reasonable-minded senators that I think will look at this realistically and view this as very troubling. It's not spending, but it is reduced revenue to the government."
McTeague disputed the figures on potential lost revenues, and said there was a broader issue than just dollars and cents.
"Not doing this will have enormous consequences on students who are not able to get the kinds of jobs of the future with the training of the future," McTeague told CBC News.
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