(June 27 – 11:25 ET) – Finance Minister Paul Martin held a news conference this morning to tout the arrival of tax cuts effective July 1.
“This is the first step in our plan to get taxes down for Canadians and their families,” said Martin. “Canadians will see the impact of these measures on their paycheques and in the benefit cheques they receive from the federal government.”
The first wave of tax cuts introduced in the budget’s five-year, $58-billion tax reduction plan includes the following measures:
- full indexation is restored to the personal income tax system, retroactive to January 1, 2000, this ends the problem of bracket creep;
- the middle tax rate falls to 24% from 26%, it is expected to fall to 23% by 2004;
- the 5% deficit reduction surtax is eliminated on incomes up to about $85,000 and reduced for all others, it will fall to 4% for 2001, and will be reduced to zero by 2004;
- and maximum annual payments under the Canada Child Tax Benefit will increase by about $250 per child.
“Our goal is to leave more money where it belongs, in the pockets of Canadians. After all, they worked for it. It’s theirs,” said Martin.
Martin reiterated that in the 2001 budget the federal government intends to accelerate the remaining tax cuts. “This is the least, not the most we will do,” he said, “This tax reduction plan will be updated ‘each and every year’ so that we can keep taxes falling for all Canadians.”
The legislation implementing these changes has passed Parliament and is awaiting Royal Assent, which is expected to take place before the Senate recesses for the summer.