Charest promises $700M in tax cuts with federal money

Liberal Leader Jean Charest is promising to share new money promised to Quebec in the federal budget by granting income tax cuts.

Liberal Leader Jean Charest is promising to share new money promised to Quebec in the federal budget by granting income tax cuts.

In a speech at the Montreal Board of Trade Tuesday afternoon, Charest said the new equalization payment formula that will funnel an extra $2.3 billion to Quebec every year will allow the province to cut about $700 million in personal income taxes.

That $700 million will take effect Jan. 1, 2008, and will be above and beyond the $250 million in cuts promised in the last Quebec Liberal budget, tabled Feb. 20, he said.

The cuts work out to about $750 for each couple with children, Charest said.

Campaigning in Montreal on Tuesday, Parti Québécois Leader André Boisclair called the Liberals'offer of tax cuts irresponsible.

"The financial situation of the Quebec government right now is not very good," he said.

Boisclair accused theLiberal government of running upa $5.3 billion deficit, once hospital and university deficits are factored into the province's financial calculations.

'There's always a risk, there's no doubt about it. People will be cynical.'—John Parisella, former Liberal strategist, onnew tax cuts

Tax cuts are outrageous in that context, he said.

"He doesn't have the money to take such kind of commitments."

The PQ Leadersaid the Liberals promised tax cuts in the last provincial election campaign and came up short on delivering them in their first mandate.

A PQ government would start to pay down the province's debt with any extra money from equalization payments, he said.

Charest's tax-cut tactic could backfire so late in the campaign, according to a former Liberal strategist.

"There's always a risk, there's no doubt about it. People will be cynical," John Parisella told CBC.

The move may feel to some like vote-buying,he said.

Charest claims credit for federal budget largesse

As the election campaign enters its final leg, Charest is saying the federal budget's money for Quebec is a result of Liberal efforts in Ottawa.

It was the Liberal party that broke new ground in Ottawa and put down the foundation for a resolution to the 'fiscal imbalance' that has long been Quebec's pet peeve,the leadersaidin an interview Tuesday with CBC Montreal's morning program Daybreak.

"We worked a lot on this. Obviously, our leadership made a difference in making this issue come forward."

Opposition leaders in Quebec said the federal budget only offers a draft solution to the fiscal imbalance, but Charest said gains for the province will bear fruit over a long period of time.

"It's a major step … it allowed us to make a major gain," he said.

Charest also defended the Liberals' last round of tax cuts, which have been frequently targeted by both the PQ and Action Démocratique du Québec, who accuse the premier of reneging on the promise he made in the previous election campaign.

"We made a commitment based on the numbers the Parti Québécois had in its budget in 2003, which we found out subsequently was not only wrong, but misleading … Our objective was to allow Quebec to be at the Canadian [income tax] average. We've done 65 per cent of the work."

Demerger issue 'put to bed': Charest

The Liberal leader also talked about demergers and the request from several mayors of newly reconstituted cities who want the province to scrap the agglomeration councils that oversee shared municipal services.

"We're going to work with [Montreal] Mayor [Gérald] Tremblay, and work with the mayors to see how we can fix this," he said. "Overall, we've allowed citizens, after the forced mergers, to speak to the future of their communities. There are some areas where there are still issues, but overall, it's pretty much put to bed."

Charest also talked about his party's health-care record. It's impossible to end the doctor shortage overnight, but the Liberals have laid the groundwork for a new generation of health professionals who will be ready for practice in coming years, he said.