OTTAWA—The Conservatives’ corporate tax cuts have contributed to piles of “dead money” and done little to help the economy, the New Democrats said as they urged the Harper government to use the next budget to spend more on job training and urban renewal.

Making public a pre-budget letter to Finance Minister Jim Flaherty, NDP finance critic Peggy Nash noted that even Bank of Canada Governor Mark Carney has complained about the $500 billionBank of Canada Governor Mark Carney has complained about the $500 billion in cash amassed by businesses, partly as a result of corporate income tax reductions.

“Your government,” Nash says in her letter to Flaherty, “has chosen reckless corporate tax giveaways that failed to rally private investment or encourage economic growth.

“The result is greatly expanded government debt and repeatedly missed deficit targets — while Canadian businesses sit on over half a trillion dollars in ‘dead money’ because they see no place to invest under current economic conditions,” Nash writes.

In this year and 2012, the Conservatives are running a combined $42.5 billion budget deficit. But Flaherty says Ottawa’s debt financing has helped create jobs and given Canada the best economic performance among industrialized nations since the 2008-09 recession.

Nash told reporters the economy is slowing and the Conservatives need to put more emphasis on growth than on spending cuts.

“Instead of tackling the serious economic challenges facing Canadians, the last Conservative budget attacked essential programs and services like health care and Old Age Security and gutted environmental protections,” Nash said.

The NDP urged the Harper government to use the March budget to bring in a “decisive” set of policies to bolster the economy and establish “broad-based economic prosperity.”

Nash called for a long-term skills training program, more funding for research and development, targeted incentives for businesses to expand employment and long-term federal investments in bridges, sewers, transit and other infrastructure.

She also accused the Conservatives of lack of action on youth unemployment, which Nash said has “skyrocketed” during the Harper years and is threatening to create “a lost generation” of young Canadians.

The NDP also said Flaherty should use the budget to respond to the growing protest movement among aboriginals. Action must include a jobs and skills plan for natives and “stable, equitable funding for First Nations schools,” Nash said.

Flaherty has suggested a new federal infrastructure fund is a possibility in the budget, expected in late March. But the Conservatives are for the most part focused on trimming federal outlays in the hope of eliminating Ottawa’s budget deficit several years from now. And Flaherty has repeatedly said he has no interest in the kind of spending commitments often advocated by the NDP.

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Nash did not put a price tag on her suggested programs, saying the opposition sets out its priorities but is not in a position to write budgets.

Corporate Canada has taken strong exception to accusations that business is sitting on huge piles of “dead money.” Businesses say they need cash on hand for strategic decisions and making investments at a time of global economic uncertainty is difficult. Corporations also say they are committing significant amounts of investment in new machinery and investment.

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