In the spirit of this Christmas season, we grant Finance Minister Jim Flaherty the last word of the year. He responded to the CTF's federal commentary, entitled Jim Flaherty, Canada's Minister of Gimmicks, in a letter to the Financial Post on Dec. 16.

The CTF described Mr. Flaherty's plan to eliminate Canada's debt, reduce income taxes and control spending as a series of attention-grabbing gimmicks. Notwithstanding the Conservative government's public vow, Ottawa's debt will not be paid off (it will be slowly paid down) and program spending will grow by 7.1% this year. This pace is little different from the 8.2% annual increases recorded by the previous government. It is neither fiscally responsible nor sustainable.

Regrettably the minister used rhetoric to sidestep the criticism that the government will overspend by $3-billion this fiscal year and that his three-point plan is timid.

Mr. Flaherty's 2006 Budget reduced some taxes, the one-point GST cut for example, and it offered targeted tax cuts that benefit some, but not all taxpayers. Yet the tax relief was not nearly as dramatic as the Conservative government would like voters to believe. The Conservative budget actually raised the lowest income tax rate by one-half point.

It is accurate to say this budget provided Canadians more tax relief than the last four Liberal budgets combined. But isn't that like judging who's the tallest dwarf Mr. Flaherty should aim higher and measure progress against the Liberal's 2000 Budget, which cut taxes by $46-billion over five-years (not the $100-billion as advertised by the Liberals as they neglected to deduct the higher pension taxes paid by Canadians in their calculations and improperly included bracket creep savings).

What follows is the text of Mr. Flaherty's response:

"Re: John Williamson, 'Jim Flaherty, Minister of Gimmicks,' Dec. 12.

I was quite surprised by the tone and approach taken by the federal director of the Canadian Taxpayers Federation. I thought his mandate was to support tax relief, responsible spending and consistent debt reduction. Instead, he goes to great lengths to condemn the positive steps we are taking on behalf of Canadian families and businesses.

As Minister of Finance, I respect each and every tax dollar that Canadians send us and if we can reduce the tax burden on working families by $10, $100 or $1,000, this is certainly a step forward.

On Nov. 23, I introduced Advantage Canada, our long-term economic plan for Canada. It is a bold new approach that charts a course to a stronger economy, greater opportunity and a better quality of life for all Canadians.

Advantage Canada is a principle-based document that outlines our ongoing commitment to reduce the tax burden, control spending and lower the national debt.

On debt reduction, Canada's new government is setting a goal of eliminating Canada's net debt in less than a generation, or no later than 2021. This is no 'gimmick.' It is the first time a federal government in Canada has made a formal long-term commitment to pay down our national mortgage. It is a responsible and planned approach, unlike the haphazard and inconsistent approach taken by the previous Liberal government.

By using net debt, we are adopting the accepted gold international standard used to benchmark debt reduction from country to country. In fact, it's a measure the previous Liberal government used in its federal budgets and fall fiscal updates.

Earlier this year, we made one of the largest debt payments in Canadian history, $13.2-billion. That amounts to almost $700-million in interest savings every year ... forever. This is no 'gimmick.' This is money that will be returned to hardworking Canadians as part of our Tax Back Guarantee.

That guarantee is a key component of our Advantage Canada Plan. As we pay down Canada's national mortgage, the interest savings generated will be returned directly to Canadian taxpayers each and every year through a reduction in personal income taxes. For the first time ever, our government is giving Canadians a direct stake and a direct benefit in how we manage government finances on their behalf. This is no 'gimmick.'

I thought this would be something any taxpayer advocate would applaud.

In our 2006 budget, we also reduced taxes of every description by $20-billion over two years. More tax relief than the last four federal Liberal budgets combined. This is money directly back into the pockets of Canadians of every age. Mr. Williamson may consider this trivial and meagre, but Canadians appreciate the fact that they can keep more of their hard-earned money. I can assure you we are committed to additional tax relief in the future, above and beyond personal income tax relief.

Regarding spending restraint, in September, Treasury Board president John Baird and I delivered on our government's new disciplined approach to spending. We outlined an ongoing strategy that will not only find $1-billion in savings this year and next, but will allow us to review and scrutinize all future government programs and expenditures. This marked the first spending reduction in nine years. This is no 'gimmick.'

Again, something I thought any taxpayer advocate would applaud.

Canada's new government stands on the side of Canadian families, students, workers and seniors. We will continue down the path towards lower taxes, lower debt and lower spending. Advantage Canada will be our road map to build a strong economy for all Canadians. Mr. Williamson, this is no 'gimmick.'

Jim Flaherty, Minister of Finance, Ottawa"

The CTF will again be front and centre in the New Year, advocating lower taxes, less government waste and more accountable government. We will continue to measure the finance minister's words against his actions. And Mr. Flaherty shouldn't expect our tone to change anytime soon - unless the Conservative government finally enacts broad-based tax relief for all Canadians in the 2007 Budget.