All indexed amounts for the personal income tax system will be adjusted by 1.6 per cent for 2003 to ensure Canadians receive protection from inflation, John Manley, Deputy Prime Minister and Minister of Finance, announced today.

Indexation of the tax system for 2003 will provide a benefit of about $135 for a typical one-earner family of four whose income rises with inflation to $40,000. This brings their annual benefit from full indexation of the tax system since 2000 to $750.

Full indexation of the personal income tax system was introduced in Budget 2000 and took effect Jan. 1, 2000. The indexation factor is applied every year to tax bracket thresholds, non-refundable credit amounts and benefit amounts.

Indexation protects Canadians from automatic tax increases that would otherwise occur when their incomes rise with inflation.