MP Garth Turner lends support
for enhanced family tax break
For Immediate Release, March 10, 2008
Families could soon be enjoying a new tax shelter for education savings equal in power to the RRSP, which Halton MP Garth Turner is praising as â€œthe greatest financial tool in a generation.â€
Liberal MPs in the House of Commons, supported by the NDP and Bloc Quebecois, last week passed legislation which makes contributions to RESPs (registered education savings plans) deductible from taxable income. â€œThat means families will be able to sock away $5,000 a year,â€ says Turner, â€œand write that same amount off the income on which income tax is payable. For most families in Halton, that will mean a rebate cheque of up to two thousand dollars. Plus, the money saved can grow tax-free within the plan.â€
Under the legislation, annual contributions can be made until a ceiling of $50,000 is hit, with the funds being withdrawn in the hands of students â€“ who generally pay no tax. The bill was sponsored by GTA Liberal MP Dan McTeague.
â€œThe only danger now,â€ Turner says, â€œis a vow by the Stephen Harper government to kill this plan before the Senate has a chance to pass it into law. While the Conservatives say it is because of cost, in actual fact, this tax-saving plan far outstrips the benefits of the governmentâ€™s own tax-free savings plan introduced in its recent budget.
â€œWhile I understand Mr. Harper likes to play politics, it would be a real blow to over-taxed middle class families if he kills this worthy initiative out of spite. This is exactly the kind of change, along with family income-splitting, that I have been working for in Ottawa,â€ Turner says.
The RESP legislation was supported by a majority of MPs, but all Conservative MPs voted against it.
â€œI just canâ€™t understand why MPs who also represent middle class families, would be against this,â€ Turner says. â€œWe are one of the most highly-taxed countries on the planet, and income taxes have not come down a single dime since Mr. Harper took office. Surely this break is not too much to give families struggling to help their kids.â€
If the RESP changes become law, making it easier for families to save, students would have to borrow less to finance their university tuitions, Turner notes. The average post-secondary graduate today enters the workforce carrying more than $34,000 in debt.
Turner is also critical of media commentators who have suggested this legislation passed in a surprise or unauthorized way. The bill was debated and reviewed in the normal fashion, read three times, and voted on at each stage. â€œThis is what MPs are supposed to do,â€ Turner says, â€œwhich is to represent the peoplesâ€™ wishes. The government, clearly, too often does not do so.â€
The RESP bill now rests with the Senate of Canada, where it is expected to be given Royal assent, and become law, unless the Conservative government brings in legislation to repeal it.
â€œThat,â€ says MP Turner, â€œwould be a big mistake.â€
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Garth Turner MP
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