• Ottawa Delivers Tax Relief that is Meaningful, Broad-Based & Accountable

OTTAWA - The Canadian Taxpayers Federation (CTF) reacted to the Economic & Fiscal Update tabled this afternoon by Finance Minister Jim Flaherty. "The tax relief package is what Canadian taxpayers have been demanding since the government was elected in 2006. This includes three principles: the tax relief is meaningful, it is broad-based, and finally it is accountable, meaning it fulfils a key campaign promise to lower the GST to 5%," said CTF federal director John Williamson.

GST Cut to 5% on Jan. 1, 2008

"The promise to cut the GST to 5% will happen in the New Year. Voters want promises made on the campaign trial to be implemented when they elect a political party to office," said Mr. Williamson. "Of course, the CTF recognizes it is better to cut income taxes instead of consumption taxes and we expect Minister Flaherty will make lower income taxes a priority in the 2008 budget. On that note we hope the Opposition Liberals will continue to push the government in that direction."

A Lower Personal Income Tax Bill, Retroactive to Jan. 1, 2007

"Today's personal income tax reduction, which retroactively drops the bottom rate to 15% from 15.5% and increases the basic personal exemption by $671, will save the average taxpayer $239 this year and the typical two-earner household $478," observed Williamson. "Importantly, it signals the government has moved away from targeted boutique tax cuts in favour of broad-based income tax relief. The CTF has been highly critical of targeted tax cuts that benefit some, but not all taxpayers. The reductions Minister Flaherty announced today will benefit all taxpayers. This is good news."

A 15% Business Income Tax by 2012

Williamson continued, "Given the high loonie and a tough business environment, this tax relief is also welcome. It will help seniors on investment pension income, improve Canada's competitive position and help companies ensure good jobs are created here in Canada, not in foreign countries."

Conclusion

"Today, was a good day for taxpayers with surplus dollars flowing back to Canadians. But the work to lower personal taxes is not done. The Conservative government will need to address Canada's high marginal tax rates in the 2008 budget. It is counter productive for governments to keep tax rates at punitive levels that serve to punish hard work and hinder investment."