NDP takes corporate tax cuts off the table

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The NDP is taking the vexed issue of corporate tax cuts off the table, leaving a four-point budget wish list as a way for Prime Minister Stephen Harper to avoid a spring election.

Mr. Harper and Jack Layton met Friday behind closed doors in the Prime Minister's Langevin Block office. That meeting coincided with the NDP Leader's decision to abandon the party's demand that the Conservatives scrap further corporate tax cuts in the March budget.

A senior NDP official said that in exchange for this concession, Mr. Layton's conditions will have to be met if the NDP is to support the budget.

"For us to not want [corporate tax cuts]taken out in this budget, the balance of the package is going to have to be very good," the official said. "That's why there is little or no room to bargain down from our proposal today."

The NDP Leader's shopping list is modest in length but could be costly in practice. It includes:

- Removing the federal sales tax from home heating bills and restoring the EcoEnergy Retrofit program;

- Increasing the Guaranteed Income Supplement for low-income seniors;

- Expanding the Canada Pension Plan;

- Hiring more family doctors.

"Our talks were cordial and respectful," Mr. Layton said in a statement. "The Prime Minister offered no assurances, but I am confident that my proposals were received and well understood."

Dimitri Soudas, Mr. Harper's communications director, issued a statement describing the meeting as "a positive sharing of views."

While Mr. Soudas said the Prime Minister was also willing to meet with Michael Ignatieff, a spokesperson for the Liberal Leader said there had been "no discussion between Mr. Ignatieff and Mr. Harper on the budget and none planned," adding that reversing corporate tax cuts was an essential, though not sufficient, condition of Liberal support.

While Finance Minister Jim Flaherty has previously expressed concern that the government could not afford to offer relief on home heating costs, he has supported measures to help low-income seniors and to work with the provinces on expanding.

Mr. Layton's finance critic, Montreal MP Thomas Mulcair, has repeatedly said the NDP caucus would have a hard time supporting a budget that fails to reverse plans for corporate tax cuts. Mr. Layton's decision essentially overrules that view.

The NDP official explained that since the cuts had been enacted in a 2007 budget bill, which the NDP opposed, there was no need to vote against them again.

With the Conservatives now ahead of the Liberals by 10 percentage points or more in a spate of recent opinion polls, it will be for the Prime Minister to decide whether to bend to Mr. Layton's demands and live to govern for another year, or to bring down a budget he knows no opposition party can pass.