-- CTF Comments on 1999 Economic Statement --

Chart: Budgetary Revenue Analysis

OTTAWA: Canadian Taxpayers Federation (CTF) federal director Walter Robinson has responded to the Economic Statement delivered by federal Finance Minister Paul Martin in London, Ontario this afternoon.

Personal Income Taxes

"While the words in Mr. Martin's statement push all the right buttons when it comes to tax relief, the actions of this government and its voracious appetite for tax revenues paint a different picture," Robinson stated. "The personal income tax burden measured in a percentage of GDP has increased by 16.25% over the last seven years with no relief in sight."

"In addition, Mr. Martin did not even hint about ending bracket creep, eliminating the 5% surtax or offering across-the-board tax cuts for Canadians next February," added Robinson. "Instead he offered the same old recipe of targeted tax relief which hasn't meant one penny of difference to Canadian taxpayers in the last two years."

Payroll Taxes

"We welcome further reductions in EI premiums and commend the Minister for this move. But this 15-cent cut in EI taxes is wiped out by a 40-cent increase in CPP premiums on January 1, 2000," said Robinson. "The payroll tax cut shell game continues - Canadian workers are paying more in payroll taxes, not less. This is contrary to the Finance Minister's repeated assertions with respect to payroll taxes."

CTF analysis (attached) reveals that a worker earning $39,000 will actually pay $84.90 more in payroll taxes starting January 1, 2000. EI premiums will be reduced by $58.50 but CPP premiums for this same worker will skyrocket by $143.40.

Debt Reduction

"Most disappointing is the federal government's abdication of any real leadership when it comes to reducing our $576.8 billion national debt," stated Robinson. "To continue down the slippery slope of debt-to-GDP targets instead of instituting a legislated scheduled of annual debt reduction amounts is tantamount to intergenerational tax avoidance."


"Any 1st year economics student will tell you that if the economy grows by 5% a year and the government runs a deficit of 2% of economic growth, the debt-to-GDP ratio still shrinks," Robinson noted. "Simply trying to grow our way out of debt is similar to a consumer praying for a raise to shrink the relative size of his/her credit card debt when compared to one's salary. It's foolish and irresponsible."

"We need to continue to work hard to convince this government that the surplus is not found money, it belongs to taxpayers. It's over taxation, period," Robinson concluded. "This money belongs to 15 million Canadian taxpayers, not the federal cabinet and their $47 billion wish list for new spending. It's time the Prime Minister understood this fact."