Kenney defends income-splitting promise, links it to 'stable families'

OTTAWA – Jason Kenney is vigorously backing the Conservative government’s contentious income-splitting promise, infusing the debate with a social conservative element Friday as he insisted the scheme will benefit “stable” Canadian families.

“All of the social research indicates that folks who come from stable families tend to do better in terms of their economic prospects, and income-splitting supports families who are investing in their kids,” the federal employment minister said.

Income-splitting, a key Tory pledge during the 2011 federal election campaign, has since faced criticism from those within the Conservative government — including Finance Minister Jim Flaherty — and from left- and right-wing economists alike.

But Kenney, a staunch social conservative, once again defended the concept when asked about it at the Manning convention, an annual networking conference for conservative-minded Canadians.

“When we talk about all of these labour issues, we need to recognize that according to the data, the single most important factor that leads to successful employment and economic opportunities for people is whether they come from a stable family,” he said.

When the Conservatives campaigned on the idea in 2011, opponents accused them of wanting to use the tax system to keep women at home instead of in the paid workforce — a criticism that was immediately revived Friday in the wake of Kenney’s comments.

Asked later by reporters if “stable family” refers to a household where one parent works and one stays at home, Kenney retorted that there are “all kinds of different families that are stable.”

He disputed suggestions that income-splitting would put children from unstable families at a disadvantage, pointing to Ottawa’s universal childcare benefit that provides parents of young kids with a monthly cheque to spend where they see fit.

Instead, Kenney insisted, it would simply remove discrimination in the tax code against single-earner families.

“Everyone agrees that we want to give every kid the best possible opportunity in life and we should be supporting families who are making sacrifices to help their kids,” he said. “Income-splitting doesn’t benefit any particular family model; what it does is eliminate a form of unfairness.”

Peggy Nash, the NDP’s finance critic, expressed dismay at Kenney’s comments about stable families.

“It sounds like their plans for income-splitting have as much to do with social engineering as they do with tax reform,” she said in an interview.

“This is like a throwback to another time. Obviously parents can make the choice about whether to stay home or keep working, and a policy that seems to want to socially engineer Canadian families, to encourage them to stay home, is really behind the times.”

David Moscrop, a doctoral candidate at the University of British Columbia who’s studying Canadian politics and democratic theory, charges that the term “stable families” is code for “white, middle-class, man-woman family.”

He speculates that Kenney’s comments lay bare his political ambitions.

“It’s a narrative for the base,” he said in an interview.

“Now that there’s talk about the end of the Harper years, you’re going to have people carving out territory, and from a political perspective, this looks like he’s trying to stake out serious territory among social conservatives.”

Under the Canadian taxation system, a two-parent family with one adult earning more than $90,000 a year gets taxed at a higher rate than a two-parent family in which both parents work and make $45,000 each. Some countries allow spouses to pool their income on their tax returns, and thus pay tax at a lower rate.

The Tories campaigned on income-splitting in 2011, saying they’d implement it once the budget was balanced in order to allow families with children under the age of 18 to share up to $50,000 worth of income for tax purposes.

The pledge, if enacted, would cost $2.7 billion and benefit fewer than two million Canadian families by giving them an approximate tax break of $1,300 a year.

Flaherty, and the C.D. Howe Institute, have both raised alarm bells about the promise, saying too few Canadians would be assisted by it.

“It benefits some parts of the Canadian population a lot. And other parts of the Canadian population virtually not at all,” Flaherty said earlier this month, calling for a re-think of the election promise.

Initially, Harper appeared to back his finance minister — despite whisperings of squabbling among senior cabinet ministers. But with caucus members facing a backlash in their ridings for possibly backtracking on an election promise, the prime minister has since come out in support of the concept.

“As I said during the election campaign, we think income splitting would be an excellent policy for Canadian families,” the prime minister said in the House of Commons on Wednesday.

Follow Lee-Anne Goodman on Twitter at @leeanne25