The Liberal government is moving quickly on its campaign promise to lower taxes for Canadians as its top priority for the parliamentary agenda.
Finance Minister Bill Morneau tabled a notice of a motion in the House of Commons that proposes to amend the Income Tax Act to boost the Basic Personal Amount (BPA) exemption — the amount you can earn before you start paying taxes — by almost $2,000, which means the first $15,000 earned will be tax free.
The tax cuts will be phased in over four years beginning in 2020.
Calling it a “very significant measure,” Morneau said the move will lower taxes for about 20 million people.
The government would phase out the benefits of the increased BPA for wealthy Canadians, gradually reducing the benefit for those with annual net incomes above $150,473.
When fully implemented in 2023, single individuals would save close to $300 in taxes every year, and families would save nearly $600 every year. According to the government’s estimates, that would mean that nearly 1.1 million more Canadians would no longer pay any federal income tax.
Aaron Wudrick, federal director of the Canadian Taxpayers Federation, supports the tax cut, but would have preferred to see reduced tax rates instead.
Conservative finance critic Pierre Poilievre called today’s announcement “too little and too late,” because taxpayers will need to wait four years for the full benefit, and because most of the increase will be taken up by inflation.
The Conservatives will review the motion and discuss in caucus before taking a formal position.
When fully implemented, the tax cuts will cost $6 billion in foregone revenues a year, the Finance Department said.
NDP finance critic Peter Julian proposed capping the tax changes at $90,000 and using the money to provide basic dental care for low income Canadians.
Last week, the Liberal government’s throne speech said Parliament should explore the feasibility of a national dental care program. That should bring a smile on some faces. -CINEWS