OTTAWA—Prime Minister Justin Trudeau now says his government has no plans to tax Canadians on employer-provided health benefits, a declaration that came after rising backroom opposition to the move.

Under questioning by the opposition Conservatives, both Trudeau and Finance Minister Bill Morneau had been refusing to comment on whether such a tax was in the cards for the coming budget, a line that Morneau stuck with Wednesday.

“We are not going to talk about budget measures in advance of the budget,” Morneau told reporters.

But a short time later in question period, Trudeau suggested the tax would not be part of the upcoming budget after he was quizzed on the issue by interim Conservative Leader Rona Ambrose.

“Millions of Canadian workers will be forced to pay the Liberals' new tax on health and dental benefits. . . . Why would the prime minister even consider doing this?” Ambrose asked.

But Trudeau replied that such a tax was not part of the Liberals’ budget strategy.

“We are committed to protecting the middle class from increased taxes and that is why we will not be raising the taxes the member opposite proposes we will do,” the prime minister told MPs.

Trudeau repeated that assertion to Conservative MP Denis Lebel (Lac-Saint-Jean), who asked whether there would be a “new tax on dental and health care?”

“It was never in our plan to increase taxes as suggested by the member,” Trudeau replied.

The finance department has been considering making employer-provided health and dental plans a taxable benefit, a move that could add more than $1,000 to the income tax bills of the 13.5 million Canadians who have such plans.

Such a move could generate close to $3 billion in additional tax revenues annually, an enticing amount for a government keen to find new sources of cash.

But as word got out, opposition from the insurance industry, unions, medical associations and small businesses began to mount.

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