- Key Canadian Taxpayers Federation demand met – basic personal exemption up 17 per cent 
- Health tax to rise by 6 per cent 
- Budget deficit to explode

VICTORIA: The Canadian Taxpayers Federation (CTF) applauds the government today for stepping up to the plate to neutralize the impact of the HST on consumers, however the new health tax and explosion in the deficit undermine the good news.   
 
Increase in the basic personal exemption lowers tax burden 
 
The basic personal income tax exemption will rise from $9,373 to $11,000 per year as of January 1, 2010, giving an annual tax break of $72 per individual and $144 per couple.
 
"The government has responded to the CTF’s demand to leave more money in the pockets of taxpaying families to cover off the cost increase created by the HST," said Maureen Bader, B.C. Director of the CTF.  "Income tax reductions get government out of our pockets, leave us free to spend our own money how we choose, and improve the incentives to work, save and invest." 
 
Health tax goes up 
 
The government announced a 6 per cent increase in the Medical Services Premium, $3 per month per person and $6 per month for families. Individuals will now pay $684 per year, couples, $1,224 per year, and families, 1,368 per year. That increase is consistent with the increase in health care spending.
 
“This health tax directly impacts a person’s bottom line and undermines the benefits from the increase in the basic personal exemption, said Bader. “Health spending will not be brought under control until we see real reform in that sector.” 
 
Deficit 
 
The budget deficit will go up to $5.6 billion by 2011. This is driven by a 5 per cent increase in total spending, while revenues drop by 1.9 percent, in 2009. Higher debt increases debt servicing costs from $2.2 billion in 2009 to almost $2.8 billion by 2011.
 
"This government continues to have a spending problem," said Bader. "We are already spending $6 million per day to service the debt now, but that will skyrocket to $8 million per day by 2011. Without real spending cuts, we are leaving future generations with a legacy of debt."