OTTAWA - Finance Minister Jim Flaherty says he'll kill a costly Liberal-sponsored bill that would help parents save for their children's education rather than risk letting country's books slide back into the red.
Flaherty said he'll include a provision to nullify the bill in legislation, expected to be introduced as early as this week, to implement last month's budget.
The private member's bill "imperils the fiscal plan of the government,'' Flaherty said Monday.
"It runs the risk of putting the balanced budget of our government into a Liberal deficit and we are not going to run a deficit. So we're going to kill the bill.''
The bill, initiated by Liberal MP Dan McTeague, was passed by the House of Commons last week over the objections of the Conservative minority government. It would allow parents to contribute up to $5,000 annually for each child to a Registered Education Savings Plan -- and deduct the amount from their income taxes.
Finance officials have estimated the measure would cost the federal treasury $900 million a year. Given the razor-thin surpluses Flaherty has projected for this year and next year, such enrichment of RESPs could be enough to push the country's books into deficit.
Flaherty's parliamentary secretary last week implored the Senate to kill the bill. But the finance minister has decided to take matters into his own hands rather than rely on the Liberal-dominated upper chamber.
He's also raising the stakes. By putting a provision to kill McTeague's bill in budget implementation legislation, Flaherty is making the RESP issue a confidence matter over which the government could potentially fall.
The Senate is to begin debate on McTeague's bill on Tuesday but Liberal strategists expect Tory senators will use procedural tricks to stall its progress for several months until the budget implementation legislation is passed, rendering McTeague's bill invalid.
Flaherty railed against the "American-style tactic'' of Liberals allowing his budget to pass last week but, on the very next day, approving a bill that "subverts'' the integrity of the budget's fiscal plan.
"This is American-style stuff. It's not protecting the fiscal integrity of the budget plan,'' he said, adding that it could also cost the provinces "something like $450 million.''
Flaherty also said McTeague's plan would benefit primarily rich parents.
However, parents haven't necessarily heard the last of the idea. Liberal Leader Stephane Dion said Monday that enriching RESPs is "a good idea'' and indicated that something like McTeague's plan will be part of his party's next election platform.
"Maybe not exactly as it is ... but certainly savings are at a record low in Canada, our citizens are in debt so there is a social problem that is affecting our competitiveness in the world if we are not able to help more students to focus on their studies,'' he said.
"It's why it makes sense, certainly.''
In the meantime, Dion said Liberal senators will scrutinize McTeague's bill carefully, including listening to the government's side, before deciding whether to approve, defeat or amend it.
He urged Prime Minister Stephen Harper to apologize to the Senate, which he and his fellow Tories have maligned repeatedly as unelected, unaccountable, lazy, partisan hacks.
"It's very fortunate that we have a Senate to address this kind of situation,'' he said, criticizing the Tories for waiting to raise concerns about the cost of the bill until after it was passed.
McTeague said his bill has proved to be enormously popular and he, for one, would have no problem forcing an election over it.
"Mr. Flaherty, in one fell swoop, knowing about this bill for two years, chose to disregard it and to basically insult every family in this country by saying, 'I don't care what parliamentarians think.' ''
