Conservative Leader Andrew Scheer unveiled a new tax cut plan Sunday that he says will save taxpayers hundreds of dollars a\u00a0year, a key plank of the Tory\u00a0platform to make life more affordable.<\/p>\n
Scheer said, if elected, a Conservative government\u00a0would cut\u00a0the tax rate on taxable income under $47,630 to 13.75 per cent from 15 per cent.<\/p>\n Based on the party’s calculations, the average single taxpayer would save about $444 a year. A two-income couple earning an average salary would save about $850 a year.<\/p>\n “We’re going to deliver a tax cut targeted specifically at taxpayers in the lowest-income tax bracket. This means that every Canadian will see their income taxes go down\u00a0and those in the lowest tax bracket see the biggest benefit of all,” Scheer said at a campaign stop in Surrey, B.C.<\/p>\n “This means more money to pay the bills, to save up for your kids’ education or maybe even finally afford a family vacation,” he said.<\/p>\n The party said the tax cut will be phased in over the course of a four-year mandate starting with a reduction to 14.5 per cent on Jan. 1, 2021, then to 14 per cent by Jan. 1, 2022\u00a0and then to 13.75 per cent on Jan. 1, 2023.<\/p>\n Based on Canada Revenue Agency\u00a0data from 2017, about 34 per cent of country’s 27.8 million taxpayers have taxable earnings over $47,630 and thus will be able to claim the maximum benefit of this cut.<\/p>\n The other 66 per cent of all tax filers have lower taxable earnings and will see proportionally less of a benefit from the cut.<\/p>\n The Parliamentary Budget Officer (PBO), the agency\u00a0of Parliament that provides\u00a0independent, non-partisan financial analysis, said the Conservative promise will cost the federal treasury about $14.075 billion in lost revenue between 2020-21 and 2023-24.<\/p>\n In subsequent years, the tax cut will mean\u00a0roughly $6 billion less a year in federal revenue.<\/p>\n The costly cut is similar to a major tax change made by the former Conservative government.<\/p>\n Under Stephen Harper, the government cut\u00a0the Goods and Sales Tax (GST) to six per cent in 2006 and then again to five per cent in 2008. According to PBO calculations, the cut cost the federal treasury about $14 billion a year in lost revenue.<\/p>\n Despite the price of his proposed tax cut, Scheer said he is still committed to balancing the federal budget in a “responsible” timeframe.<\/p>\n “We’re going to get back to balanced budgets while we find ways to lower taxes and put money back in the pockets of Canadians,” he said, while adding a Conservative party\u00a0would not cut social transfers to the provinces\u00a0for programs like health care and education.<\/p>\n While initially promising an accelerated schedule of getting back to fiscal balance in\u00a0two years,\u00a0Scheer has since said he will\u00a0balance the books within five years.<\/p>\n The tax cut announced Sunday is not unlike the Liberal government’s “middle class tax cut,” which was implemented after the last federal election.<\/p>\n However, that cut targeted the middle-income bracket \u2014 which applies on taxable\u00a0income between $47,630 and $95,259. The Liberals\u00a0reduced the rate of that bracket to 20.5 per cent from\u00a022 per cent.<\/p>\n The Canadian Taxpayers Federation, an advocacy group that lobbies for lower taxes and smaller government,\u00a0praised the Conservative plan Sunday, saying it will deliver “broad-based tax relief.”<\/p>\n “Affordability is a key issue in this election campaign\u00a0and leaving billions in the pockets of Canadian taxpayers is a great policy,” said Aaron Wudrick, the federal director of the federation. “This income tax cut is exactly what taxpayers need: it would save Canadian families about $850 a year.”<\/p>\n However, it’s not just the first income tax bracket rate that would change with this proposal.<\/p>\n The Conservatives have already recalculated their\u00a0previously announced tax credit proposals\u00a0\u2014 for public transit and maternity and parental leave benefits \u2014\u00a0to account for the lower overall tax rate that would be in place as a result of this income tax cut.<\/p>\n Scheer did not say how it would affect other federal non-refundable tax credits \u2014 such as those for volunteer firefighters, search and rescue volunteers, home buyers, people with adoption expenses\u00a0and for interest on student loans,\u00a0among other eligible categories \u2014\u00a0which are all currently based on the lowest tax bracket of 15 per cent.<\/p>\n On the affordability theme, Scheer and the Conservatives recently unveiled a campaign ad featuring the party’s election slogan: “It’s time for you\u00a0to get ahead.”<\/p>\n The Conservatives are expected to unveil a series of campaign commitments in the same vein as this tax cut. Already, they have promised a non-refundable tax credit on maternity and parental leave\u00a0Employment Insurance (EI) benefits. They’ve also vowed to remove\u00a0the federal GST\u00a0from\u00a0sales of home heating fuels.<\/p>\n Scheer has also promised to reinstate the federal tax credit for transit passes, which, according to party estimates, would save\u00a0a\u00a0family of four transit users in the Greater Toronto Area\u00a0nearly $1,000 a year.<\/p>\n Like his provincial conservative counterparts, Scheer has\u00a0railed against the federal Liberal government’s carbon tax and he has vowed to scrap it\u00a0if elected. The Liberals maintain the initiative will lower greenhouse gas emissions and will be rebated to most families at tax time.<\/p>\n Canada’s tax system is a progressive one with graduated brackets, meaning rates vary according to the amount of income you earn \u2014 and you pay different rates on different portions of your income.<\/p>\n In 2019, the\u00a0income tax brackets are as follows:<\/p>\nCut will be phased in<\/h2>\n
Still committed\u00a0to balancing the books<\/h2>\n
Taxpayer’s federation likes it<\/h2>\n
More tax promises coming<\/h2>\n
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